A world-leading industrial equipment manufacturer, Gardner Denver embraces a corporate strategy that focuses on growth through acquisition and operational excellence. This approach has led it into various industrial and international markets, where the company provides products such as air compressors, blowers and pumps. Dan Harvey brings us up to date with a venerable corporation set to observe a historical milestone.
Preparing to celebrate its 150th anniversary in 2009, Gardner Denver, Inc. (GDI) was established in the middle of one century (the 19th) and developed through the entire course of a second (the 20th). Now moving forward in a third, the company has developed into a global enterprise that services a variety of sectors with high-quality industrial equipment products such as reciprocating, rotary and vane compressors; liquid ring pumps and blowers, and other fluid transfer equipment.
How can such longevity be explained? Well, for one thing, GDI approaches sustainability and growth as if guided by the simple yet effective advice of a savvy financial advisor: Diversify, diversify and diversify!
Indeed, the organization has diversified itself by geography and industries served, with acquisitions playing a huge part in its historical success. “The major factor contributing to the growth realized over the last 10 years is the 22 acquisitions that have taken us into many different industries,” says Michael O’Connor, who manages both organizational development and corporate communications for the Quincy, Ill.-headquartered organization.
Moreover, GDI’s development seemed steered by the investment concepts and functional dynamics that form the basis of modern portfolio investment theory, where fluctuations in different sectors compensate one another: if one goes down, another will go up. And that returns to the importance of diversification. “No single industry represents more than 30 percent of our revenues and no individual customer represents more than 3 percent,” says O’Connor.
Spreading eggs among numerous baskets, GDI has a revenue/industry distribution that includes: automotive services (2 percent), paper (2 percent), printing (5 percent), food & beverage (5 percent), chemical (5 percent), environmental (4 percent), medical (5 percent), transportation (9 percent), downstream energy (10 percent), upstream energy (11 percent), mining and construction (3 percent), industrial manufacturing (28 percent), other (11 percent).
Further, geographic revenue proportions break down this way: United States, (35 percent), Europe (37 percent), Asia (15 percent), Canada (3 percent), Latin America (5 percent), other (5 percent).
“The fact that we’re so diversified – by industry, geography and product – has had an enormous and positive impact on our success,” says O’Connor. “One particular industry may be down while another may be up. Also, the United States and Europe may be in an economic downturn, while China could be going strong. So, diversification keeps us healthy.”
GDI was born in 1859, and all evidence indicates that its genetic structure includes a strong diversification strain. When Scottish immigrant Robert Gardner established the company, it was called the Gardner Governor Company, and it manufactured the first effective speed control for steam engines: a fly-ball governor. Blossoming from that seminal development, the company then began producing steam pumps and high-speed vertical air compressors.
By the dawn of the 20th century, Gardner’s company adapted its steam pump technology for use in mud pumps, which subsequently became a valuable tool in oil and natural gas drilling processes. “They’re still used throughout the world,” O’Connor points out.
That development led to the 1927 merger with the Denver Rock Drill Company (hence, the Gardner Denver name). GDI initiated acquisition activities in the 1950s, and truly began diversifying when it purchased the CycloBlower Company, which manufactured helical screw blowers.
The company continued growing in the next two decades. In 1978, it was acquired by Cooper Industries but eventually Cooper developed plans that didn’t include GDI and it spun the company off. As it happened, this 1994 move turned out to be one of the best things that ever happened to GDI. “At the time, we were a $175 million company, down from a previous level of about a half-billion, that had a lot of debt,” recalls O’Connor. “But, as an independent company, we turned our fortunes around through focusing on cash flow to repay debt, freeing us to begin to pursue our numerous acquisitions.”
Now a $2.3 billion organization, GDI is a global leader of compressed air and gas, vacuum and fluid transfer technologies, a position it secured by acquiring complementary companies and product lines (e.g., TCM oilfield pumps, Lamson and Hoffman centrifugal blowers, CompAir, Champion and Bellis & Morcom compressors, Nash liquid ring pumps, Elmo and Rietschle blowers, and Thomas OEM compressors and vacuum pumps, among others).
“We’re now experiencing a very exciting time in our history,” reports O’Connor. “We have a new president and chief executive officer, Barry Pennypacker, who is leading us toward operational excellence, and in 2008, Fortune magazine ranked us number 48 on its annual list of the 100 fastest growing companies.”
Gardner Denver is now restructured into two major groups: the Industrial Products Group and the Engineered Products Group.
Compressors and blowers fall under the Industrial Products Group. The blower operation’s best known brand is Elmo-Rietschle, created by the acquisition of two German vacuum and pressure companies. Other brands include Drum, Sutorbilt, DuroFlow and Wittig. The product lines include high-quality side channel, rotary vane and other unique blowers, which enhance GDI’s global sales channels and manufacturing base. In addition, the group serves both OEM and end-use customers in packaging, plastics, printing, chemical, food and beverage and pharmaceutical applications.
Also included in the Industrial Products Group are compressors. Gardner Denver is a global manufacturer of energy efficient air compressors and engineered compressed air and gas products and systems, providing pneumatic power to industries world wide. Its portfolio includes the Gardner Denver, CompAir, Champion, Belliss & Morcom, Bottarini, and Tamrotor, brands.
The Engineered Products Group is the home of the Nash liquid ring pumps and compressors and the engineered systems that incorporate these products. It also includes diverse fluid handling products and services, including petroleum and well stimulation pumps. In addition, the Engineered Products Group manufactures high-pressure water jetting systems, marine, road and rail loading systems, tank truck equipment and systems, refueling nozzles and a range of dry break couplers and adapters. Brands include Gardner Denver, Emco Wheaton, Todo, Oberdorfer, Liqua-Blaster, Partek and CRS Power Flow. The Thomas Division also falls under this group. It services manufacturers of medical devices, business machines and packaging equipment.
With locations in more than 30 countries, Gardner Denver is strategically positioned to support its customers anywhere in the world.
The company has manufacturing sites in the United States (Quincy, Ill.; Elizabeth, Pa.; Houston, Texas; Monroe, La.; Odessa, Texas; Peachtree, Ga.; Princeton, Ill.; Sedalia, Mo., Sheboygan, Wis.; Syracuse, N.Y.; Trumbull, Conn.; and Tulsa, Okla.), as well as Brazil, Canada, China (five sites), Finland, Germany (eight sites), Italy, Taiwan and the United Kingdom (seven sites).
At each site, GDI fosters the concept of operational excellence. “That is something you really need if you want to position yourself as a leader,” comments O’Connor, “and that’s an area where our new president and chief executive officer, Barry Pennypacker, has demonstrated expertise.”
O’Connor reports that Pennypacker studied “lean” concepts in Japan as well as in the other countries where he has worked. “He is probably one of the best in the world when it comes to understanding the philosophy and how to make it work. As he has pointed out, only about 4 percent of the organizations that have tried to implement ‘lean’ truly get it. So, his experience with ‘lean’ has helped us improve our margins, just by improving our operational efficiencies. The impact that it has had on all of our manufacturing locations has been truly amazing. Along with acquisitions and diversification, operational efficiency significantly contributed to our growth.”
In addition to its highly efficient manufacturing sites, GDI also has three remanufacturing facilities (Fishers, Ind.; Mayfield, Ken., and Fort Worth, Texas), and service/distribution/assembly facilities in Australia, Brazil, China, Finland, France, Germany, Italy, Japan, Netherlands, Belgium, Poland, Singapore, South Africa, South Korea, Spain, the United Kingdom and the throughout the United States.
Gardner Denver, Inc. has marched forward at an accelerating pace through three centuries. Obviously, it hopes to see a fourth. Its approach to business should not only sustain the company, but its products and services contributed to a more sustainable world – fostering an environment where innovative, responsible companies such as itself can continue to flourish.