The Beloit Chronicles - Part 1
This is part one in a six part series that chronicles
the events that led to the closing of Beloit Corporation
The time & place: Monday, June 7th, 1999: Beloit, Wisconsin
The current news cycle in the Beloit area was focusing on the Chippewa Indian's casino question.
Governor Tommy Thompson was taking a busload of Wisconsin supporters to Iowa to open a campaign headquarters for Texas Gov. George W. Bush who aspired to be the Republican presidential nominee for the year 2000 presidential election.
Debra Jensen-De Hart, a Beloit Daily News staff writer posted a story about the Beloit area heat wave! She reported, "Just in case there were any parents anywhere in the Stateline Area who hadn't sweated enough in the last 18 years, Mother Nature made sure graduation day would be one to remember."
The Packers were trying to find ways to generate more money to meet player salary demands.
On June 6th, a strong storm had blown through Wisconsin. Tens of thousands of people were without electricity in Wisconsin following thunderstorms that produced wind gusts of up to 70 mph.
Beloiters woke up the morning of June 7th to news on their TV, radios and newspapers that could be the indication of another great storm erupting, one that could effect their future in a very different and dramatic way.
The Beloit Daily News top local news story on June 7th was " Beloit Corp. parent files bankruptcy."
The BDN reported: MILWAUKEE (AP) _ Harnischfeger Industries, Inc., which reported a net loss of $74.3 million for its second quarter last week and several management changes two weeks ago, today announced it had filed for financial reorganization under Chapter 11 of the U.S. Bankruptcy Code.
``In light of the adverse impact of the continuing difficult global economic environment on the company's businesses, and the attendant impairment of our capital structure, we concluded that prompt and decisive action was required to preserve the company's assets and reverse its deteriorating financial condition.'' John Nils Hanson, the company's new chief executive officer, said in a statement.
The Milwaukee-based mining and paper-making machinery manufacturer said the voluntary bankruptcy filing had been made in federal court in Delaware, and covered the parent company and its U.S.-based operating subsidiaries.
The Milwaukee Journal Sentential, said it another way: Harnischfeger files Chapter 11,
The MJS reported, "Harnischfeger and analysts said Monday's announcement is a sign of hope for a company that has cut 3,400 workers in the past year. It still employs about 1,100 in Milwaukee and another 1,400 in the Beloit area." Quoting MJS further, "John Nils Hanson, the company's new chief executive officer, said in a statement: Under Chapter 11, employee payrolls will be met, the company expects to continue its benefit programs and with the debtor-in-possession financing we will have the financial strength to serve our customers and build stronger relationships with our suppliers going forward.''
Both the newspaper articles and other news reports on this issue discussed the financial vulnerability of Harnischfeger and the Harnischfeger assurances that they would work for both their customers and their employees best interests. Harnischfeger, in it's news release did not refer directly to Beloit Corporation or what effect the Chapter 11 would have on it's employees or their families.
Similar news stories were reported in the UK, Germany, Italy, Brazil, Japan, Spain, Melbourne, and many other locations in the US and abroad that had a major stake in the Harnischfeger bankruptcy. Insiders were not taken by surprise by the Chapter 11 announcement, in fact some were expecting it. The vast majority of people however, those not privy to the internal daily business and maneuvers taking place, were taken by surprise and expressed grave concern of what this would all mean.
Postings quickly appeared in Internet News Groups and websites. E-mail traffic between employees, retirees and other interested parties discussed such topics as: what was going on, what would happen next, and how this all would effect them. Some were bitter, others reassuring. Answers to those and other questions would be slow in coming.
The optimistic viewpoint was that this would only mean a tightening of the belt, some restructuring and the situation would slowly return to normal. The pessimistic and perhaps more knowledgeable felt, or knew, that this could be the beginning of the end for some Harnischfeger companies and that many jobs within the Harnischfeger family of companies were in jeopardy.
On April 8th, 2000, almost a year after the bankruptcy filing, Beloit Corporation has been divided and sold. The last employees have left the Beloit Complex in Beloit Wisconsin.
Some will join those companies that purchased the various Beloit entities. Others will join a new "Beloit Company" being formed by ex-Beloit employees that many hope will continue the legacy and traditions of a once great company that remains great in many memories.
The buildings are dark, the dreams lost, as employees and their families face new challenges and dreams of a bright future. We wish them all well.
Beloit Corporation has a long and rich history in the Beloit, WI area. It started as the Merrill & Houston Iron Works in 1858, then became The Beloit Iron Works in 1885. In the early 1960s, BIW became known as the Beloit Corporation. For many years Beloit was a family owned company, owned and operated by the Neese Family. The company was very successful and steadily grew to be the major supplier of paper machinery in the world. Beloit is known for it's leading edge technology and the fine people that managed and worked within the Beloit organization. Beloit grew and expanded to a multinational corporation respected by it's customers and it's competitors alike. Employees took great pride in the fact they were part of the Beloit Corporation. Beloit became a Mecca for those aspiring to a position within the pulp & paper industry.
In 1986 Beloit employees and customers alike were taken by surprise when Elbert Neese, Jr. announced that the Neese family was putting Beloit Corporation up for sale. Beloit was purchased by Harnischfeger Industries that year. It continued to grow and eventually would employ over 1000 people in the Beloit area and 8,000 people worldwide.
The person that probably had the most to do with the acquisition of Beloit Corporation by Harnischfeger was William Goessel. Bill Goessel a Beloit employee since 1950 became a Director in 1969. In 1975 Bill Goessel was named Vice-President of the Paper Machinery Division. He later left Beloit to assume the position of Chairman & Chief Executive Officer of Harnischfeger Industries.
Harnischfeger Industries, like Beloit, was an old line company with a great reputation and a world leader in it's field. The foundation of HPH was laid in Milwaukee by entrepreneurs Alonzo Pawling and Henry Harnischfeger in 1884. The partners opened a machine and job shop in a 26 x 50-foot frame building under a sign that combined the first letters of their last names to form the P&H trademark that is now famous around the world. In 1911, Harnischfeger bought out Pawling's interest and renamed the enterprise Harnischfeger Corporation, retaining the P&H trademark. Around this same time, a building boom prompted P&H to develop a line of trenching and excavating machines, and in 1919, the company introduced an innovative gasoline-powered dragline. The formation of Harnischfeger Industries, Inc. (HPH) was approved by the shareholders of the original Harnischfeger Corporation in 1985. HPH was established as a holding company that would allow new business pursuits and the formation of joint ventures and other business combinations. Today, HPH is a global company with business segments involved in the life-cycle management of equipment for underground mining (Joy Mining Machinery), surface mining (P&H Mining Equipment), and pulp and papermaking (Beloit Corporation).
Back in 1985, the acquisition of Beloit by Harnischfeger was a natural. Company backgrounds were similar. Both companies were internationally know and respected as leaders in their industries. Both companies were involved in heavy equipment that had a work force that used similar technologies. Both companies were financially sound. Their CEO, William Goessel knew the paper industry and recognized the natural fit of the two companies. Harnischfeger Industries and Beloit Corporation continued to prosper. Mr. Goessel retired in 1992 and was succeeded by Jeffery Grade.
This series of articles is authored by: Luigi Bagnato, retired from Beloit in 1989 after 29 years of service.
Proceed to Part 2 of the Beloit Chronicles
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