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The changes in the direction of the Iron Works that began with 
Harry Moore's election to the Presidency in 1952 rapidly accelerated 
in the succeeding decades. The Iron Works had long been the leading 
papermaking machine manufacturer in the United States, and Elbert H. 
Neese, Sr. was content to have the company concentrate on keeping 
this domestic leadership. Harry Moore and other younger company 
leaders disagreed believing that the 1950's were a perfect time to 
take advantage of the worldwide dislocations caused by World War II 
and the Cold War and make the Beloit Iron Works the premier manufacturer 
of papermaking machines in the world. Over the next decade the company 
succeeded in this new goal, and in doing so began the process of expansion 
and diversification that turned the company into a large, privately 
owned, centrally directed, conglomerate that still concentrated first 
and foremost on paper-making machines. The ten years from 1952 to 1962 
were the transition years of this process which symbolically ended on 
January 1, 1962 when Beloit Iron Works changed its name to the Beloit 
Corporation. 

The first decade of Harry Moore's Presidency was characterized by 
steady corporate growth with sales increasing rapidly from 26 million 
to over 86 million by fiscal 1963. Most of this growth occurred by 
1959 when sales were more than 84 million. Sales then declined to the 
77 million plateau for 3 years before rising to a new high in 1963. 
However, during all these years, profits were substantial often more 

Page 157

than 60% above average. Because of this the company had cash to invest 
in expansion and diversification. Both of these strategies had  developed 
in the 1950's with some important results especially in overseas 
expansion that brought other papermaking machine companies into the 
Beloit organization. 

The second decade of Moore's leadership continued the expansion 
and diversification. However, while sales were up dramatically more 
than doubling to over 180 million in the 4 years ending in 1967, they 
then declined to the 150 to 170 million level for the next 4 years. 
This was due primarily to Beloit's dependence on the paper industry 
and the fact that the industry had over expanded in the mid 1960's. 
Beloit management had foreseen this over expansion and had tried to 
diversify to lessen its negative financial effects, but Beloit's diversifications 
as a whole failed to be profitable during this time. Thus, 
the decade from fiscal 1963 through 1973 can best be characterized as 
solid sales years that reached a high of almost 200 million in 1972 
but low profit years. Nineteen sixty-four was the last year that normal 
profits were made, and despite the rapid rise in dollar volume, each 
year from 1965 through 1973 was well below average in profits. Yet 
during all these years Beloit had papermaking machine sales greater 
than any of its competitors and was undoubtedly the technological leader 
of the industry.

This paradox continued into fiscal 1974 which was the only year 
since the company had been reorganized in the 1880's that it failed 
to show a profit. Yet through a program of cutting its losses from 
unwise diversifications and through its technological innovations for 
the paper industry that Beloit was then selling at potentially high 

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profits, the company was on the brink of the most successful years of 
its history. In 1975, Moore's last year as President before becoming 
Chairman of the Board, the company had the greatest sales and profits 
in its history. These high sales and profits continued from 1976 
through 1979 under the Presidential leadership of Elbert H. Neese, Jr. 
The future looks as promising for the streamlined and competitive 
Beloit Corporation! 

While these trends were apparent in a retrospective look at the 
Beloit Corporation and its predecessor, the Beloit Iron Works, in the 
quarter century ending in 1978, it is a misleading oversimplification 
to characterize the company solely on the basis of its profits and the 
leadership's relationship to those profits. Beloit was the leading 
domestic papermaking machine company in 1952, and with its expansion 
into the world market and its investment in foreign papermaking 
machinery companies in the 1950's, it quickly became the world leader . 
in machinery design and sales. It has retained that leadership despite 
strong competition from paper machine makers in Finland, Germany, and 
Sweden as well as the United States.

In many ways this was a quiet and unobtrusive move to world 
leadership just as the little company in Beloit had slowly but surely 
moved to national leadership a half century ago. Beloit's customers 
often dwarfed Beloit in size, and except in the trade journals that 
noted Beloit's technological leadership, the customers usually got the 
national publicity that surrounded new and better products. International 
Paper, Crown Zellerbach, Scott, and Kimberly Clark were famous companies, 
but without their close relationship with Beloit in the 1950's and 
before, leadership would probably have passed to other companies. 

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The modern era of the corporation began with Harry Moore's 
Presidency in 1952. Yet some of the "modern" practices then followed 
by Iron Works' leaders only point out the magnitude of the changes 
that would occur between the early 1950's and the late 1970's. 
In 1952 the Iron Works had about 1600 employees all in one location 
and a simple organization chart that included only four Vice-Presidents: 
William S. Wood -Vice-President of Manufacturing; C. Elmer Macklem -Vice-
President of Sales; 3. E. (Bill) Goodwillie -Vice-President of 
Sales; and Lloyd Hornbostel -Vice-President of Engineering. The 
directors were all family members and included Mrs. Elbert H. Neese, 
Sr. Directors' meetings were infrequent and informal and as little 
detail as possible was recorded about their deliberations and discussions. 

Sales Vice-Presidents Macklem and Goodwillie often took trips to 
their respective sales areas and stayed away for weeks at a time. 
Goodwillie's trips to the west coast were sometimes even longer. The 
company had its own plane too, but salesmen continued to use trains 
and cars for more than half of their travel. The length of time that 
typical trips took required more preparation time and more thorough 
reviews of the contacts made after the trip was over. 
Informal reviews of important trips often took place in the relaxed 
atmosphere of the "morning mail table." Executives gathered each work 
day at 8: 00 a. m. to discuss incoming communications, recent trips, 
potential sales, and problems within the organization. This was a 
longstanding tradition and was of great practical use as long as the 
company remained relatively small and intimate. Elbert H. Neese, Sr., after being elevated to Chairman of the Board, 

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continued to take an active interest in the affairs of the company. 
He was at his office everyday except during the winter months when he 
and his wife vacationed in Phoenix. His opinions were listened to, 
but he did his best not to interfere with the way Harry Moore chose 
to run the company. At first he argued that the company should not 
expand so rapidly or go foreign because he was afraid that the talent 
that had made Beloit the United States leader would be dissipated in 
unwise ventures. Later as Beloit's ventures began to succeed, he 
became "rather enthusiastic," 2 

Neese also continued to assist in paper machine sales which in 
those days was usually a very informal activity done between personal 
friends -the President or Chairman of the Iron Works and his counter-part 
at a paper company. Neese and Harry Moore had close personal 
friendships with many company Presidents, and both sides used their 
friendships to benefit their businesses. Trust and past reputation 
were keys and the negotiation process often took place over dinner or 
a cocktail.

Planning, too, was very informal. The market and potential 
market was studied with some enthusiasm and to the limits of possible 
expertise. Yet, with no research center and with the company almost 
wholly dependent on domestic sales, unexpected events often caused 
the company to revert to crisis management. 3 

Research was extremely important but very dependent on the interests 
of the resident genius and his talented assistants. At Beloit this 
meant Lloyd Hornbostel -a quarter century employee by 1952. Everyone 
who had contact with Hornbostel agreed that he was a genius -a man 
able to see an entire problem and its probable solution often after 

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one briefing. Beloit had prospered under this system, but by necessity 
it was often haphazard in its execution. It depended on convincing 
various paper mills to try out Beloit ideas in their mills although 
on occasion practical tests were held at the Iron Marks beforehand. 4 
Fortunately, because of Beloit's reputation for technical expertise, 
development work in cooperation with customers in their mills had 
worked well for many years and had often resulted tin mutually. advantageous 
new products. 

In many ways Beloit was still the "Old Folk's Home" of many long-standing 
employees in 1952, but the successful machinists' unionization 
of the mid 1940's was slowly changing benevolently paternalistic 
attitudes among management leaders. The first strike over a contract 
was held in 1951. The strike which lasted 50 days was a real confrontation, 
and it saddened many people on both sides. With it, both 
management and labor could see that the old era had ended. Some people 
on both sides would never again feel the "familiness" or closeness that 
were hallmarks of the old Iron Works. In 1952 Beloit's competition was from long time domestic rivals like Pusey & Jones; Rice, Barton, and Fales; Bagley and Sewall; and Black Clawson. Beloit was the leader but was constantly thinking about these competitors. In competition like in so many other areas great 
changes would occur during the next quarter century. The domestic 
competitors failed or merged until only Black Clawson was left as a 
major competitor. However, in the meantime Beloit would go foreign 
and foreign competition would come to the United States. By the 1970's 
there were many foreign competitors but KMW of Sweden, Voith of Germany, 
and a Finnish government controlled consortium of 3 companies (Valmet, 

Page 162

Tampella, and Wartsila) stand out. The latter competition is especially 
ironic since Beloit made its first foreign inroads after World War II 
in Finland.

The change in competition is symbolic of the many other changes 
Beloit would see in its era of rapid expansion. As the company grew 
and added new officers the morning mail table was abandoned as a relic 
of the past. It went out at about the same time as the United States 
passenger train. With the advent of jet planes Beloit executives began 
to take longer trips over shorter time periods. Efficiency increased 
but the old, intimate atmosphere was gone forever. Even the close 
friendships Beloit executives had with paper mill presidents declined 
in importance as mill decisions passed to special committees made up 
of managers of construction purchasing and chief buyers. Nearly 
everything was becoming more practical and efficient at the expense 
of old time personal friendships. It is only a slight exaggeration 
to note that Beloit officials used to know whenever one of their customers 
had an upset stomach or a headache, but as the modern era 
progressed they might not even know the backgrounds of the men they 
were negotiating with on multimillion dollar contracts. Something was 
lost in the new way of doing things, particularly the personal concern 
that E. H. Neese, Sr. felt and drummed into the heads of his sales 
engineers -"Was the customer satisfied?" This was what he wanted 
more than anything else. While that concern remained after his death 
in 1961, it became less personal. 5 

Change was the byword in Beloit's modern era just as it was in 
the society at large both domestic and foreign. In 1952 American 
society was solidly segregated, and since this had the Supreme Court's 

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blessing in the 1896 Plessy vs. Ferguson Case, it was likely to stay 
that way. Yet within 2 years Brown vs. the Board of Education would 
throw out the "separate but equal" idea and foster integration. Integration's 
progress remains slow and painful, but in retrospect it is 
apparent that the United States has irreversibly changed. 
American politics at that time was dominated by the question of 
who would succeed Harry Truman in the White House. The United States 
was in the middle of an unpopular "police action" in Korea and Truman 
had fired one of America's greatest World War II heroes, General 
Douglas Macarthur, for insubordination. The Democrats were a beatable 
party for the first time since the late 1920's, and Dwight Eisenhower, 
the other great war hero, was persuaded to run. He picked as his 
running mate a young California Senator who had first caught the 
public eye during the Alger Hiss case in the late 1940's. Richard 
Nixon received the nomination and kept it after explaining away an 
allegedly illegal secret fund set up for his personal use. In his 
"Checker's Speech" he set the record straight by baring his financial 
records and portraying himself as an ordinary man of modest means. 
Needless to say much later in his "checkered" political career he 
dissolved into retirement after being caught lying over an issue that 
he tried but could not explain away -Watergate. By this time he was 
much more affluent and secretive.

Americans were the most affluent people in the world in 1952, and 
the most secretive institutions were the most popular. The Central 
Intelligence Agency, set up in 1947, was popular and apparently 
effective -having destabilized or overthrown a number of unpalatable 
governments by the mid 1950's. Its domestic counterpart, the F. B. I., 

Page 164

was even more popular with J. Edgar Hoover, the Director, practically 
a cult figure of the American political right wing and much of the 
center. Just like Nixon, both of these institutions would be partially 
discredited during the 1970's. 

The early 1950's was a simpler time in which the international 
"good guys and the bad guys" seemed to stand out more clearly. Stalin 
and the Soviet Union, former allies against Nazism, were by then 
allegedly mortal enemies of the United States. The Cold War was at 
its height and nearly all Americans believed in "monolithic communism" -a 
hydra-headed monster controlled exclusively from Moscow. In order to 
harness this monster, the United States had developed containment with 
its auxiliaries, the Truman Doctrine and The Marshall Plan. The world 
was bi-polar. It was us against them, and given the choice many people 
believed they would be "better dead than red." Trade with the communist 
bloc was minimal. Who could think of trade when they were talking about 
inevitable victory and we spoke of "massive retaliation," "more bang 
for the buck," and "falling dominoes." In the meantime the United 
States pretended that a nation of over 800 million people did not 
exist. 

The building of alliances was a key to the period, and the United 
States which had foresworn them back in 1800 signed a number beginning 
with the North Atlantic Treaty Organization in 1949. Alliances did 
not seem to ensure safety in the atomic era since both sides possessed 
the atomic bomb by the late 1940's and the hydrogen bomb by 1953. Many 
of the alliance partners, such as Great Britain, France, and Nationalist 
China, had their own problems and were entering a period of slow decline 
in the international arena. Other nations, some not even in existence 

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in 1952, would enter the arena in great force by the 1970's. By 
that time post-Stalin Russia was a mellower, if still dangerous 
adversary. The bywords, however, were "peaceful coexistence" and 
"detente" and trade consistently picked up beginning in the 1960's. 
In the meantime, the nonexistent country of 800 million people had 
broken away from the Soviet orbit while retaining its version of communism, 
and the United States was in the process of normalizing relations 
with the Peoples Republic of China. Trade, for the most part, was 
still in the future but plane loads of United States businessmen, 
including Beloit Corporation executives, began to descend on China 
in the late 1970's. 

The rest of the world, which for the most part had marched either 
to a United States or a Soviet drummer in the early 1950's, had begun 
to go its own way in less than a decade. The decline of colonialism 
spawned new nations and new strength in older nations now eager to 
avoid hegemonic control by the great powers. Some had great national 
resources that usually were controlled by United States or Western 
Europe companies in the 1950's. For the most part this control had 
broken down by the 1970's and in the case of one product, oil, the 
repercussions were tremendous. All these events required that a 
company which sought to expand and go international would have to be 
extremely careful and knowledgeable to succeed even in the 1950's 
when the United States was at the pinnacle of its power. 
Beloit did not succeed in everything it tried in the 25 years 
after 1952. However, its success rate was high particularly when the 
company stayed in the area of its greatest expertise -the manufacturing 
of papermaking machines. Major trends included domestic expansion, 

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diversification, and in the past few years corporate investments. 
In Beloit's march to a more than 400 million dollar corporation a 
few statistics point out how far it has come in the years since World 
War II. In the 1970's, with 3 research centers operating, more money 
was spent on the direct and indirect costs of research than the 
company's total 1945 sales of about 5.3 million dollars. The same is
true for company investments in plant additions and new machine tools. 
In some recent years more money has been invested in these than the 
company's total 1950 sales of 20 million dollars.

As sales increased in the early 1950's company leaders came to 
the conclusion that 97 years of manufacturing in one city was long 
enough and that it would be to the company's advantage to acquire more 
capacity by expanding elsewhere. They had been adding new capacity 
practically every year in Beloit but sales were expanding faster than 
capacity. In 1955 the Downingtown Manufacturing Company, a paper 
machine manufacturer in Downingtown, Pennsylvania, was for sale and 
Beloit acquired the foundry and machine shop. 6 

The company was renamed the Beloit Eastern Corporation and William 
S. Wood became its President. Elbert H. 'Neese, Jr. was Executive 
Vice-President and Treasurer, Alonzo A. Neese Secretary, and Harold 
Tower Assistant Secretary and Assistant Treasurer. Horace Rodgers 
was General Manager and the man who actually ran the plant. Soon 
after acquisition Beloit Eastern began a major plant expansion program 
that included a new machine shop, a larger erecting shop, and a shipping 
and receiving building, New machine tools, foundry equipment, and a 
heating system were also added. Beloit Eastern was the first major
acquisition by the Iron Works,

-167-

and this action began the modern era of expansion that in less than 
a decade would result in Beloit becoming the worldwide industrial 
leader in the manufacturing of papermaking machinery. The reasoning 
behind the ideas of both domestic and foreign expansion were well 
thought out and were much more than just the need for new plant 
capacity due to increased demands for Beloit products. Downingtown 
had practically dropped into Beloit's lap because the owner's desire 
to get out of the papermaking machine business virtually coincided 
the Beloit's need for more capacity in order to cut down on unprofitable 
subcontracting. Other acquisitions and licenses were made after more 
careful consideration. 

The younger leaders of the Iron Works particularly President Harry 
Moore and Chairman of the Board Elbert H. Neese's two sons, Alonzo Neese 
and Elbert H. Neese, Jr., were dominant forces in the push for expansion. 
7 Their biggest concern was whether the market for machines 
would expand fast enough to warrant expansion. To investigate, they 
hired a firm called Product Planning Consultants in 1955 to study 
Beloit's past sales and customers and to relate these to future economic 
trends and indicators for the United States. Their recommendations 
pointed toward expansion and a similar study 2 years later by the 
Welling and Woodard consulting firm encouraged the company to diversify. 8 
These recommendations reinforced previously held inclinations 
based on Beloit's own planning. Company leaders saw their company 
as unique in the papermaking machine field. Their product line had 
a good reputation for performance and dependability. More importantly 
the demand for Beloit-built machinery was much greater than their 
competitors. In fact, Beloit's backlog by the late 1950's was more 

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than the total of all the domestic competition even though Beloit's 
prices were higher because the machinery was better. Despite the 
euphoria there was a constant danger that, since the paper machine 
market was cyclical, demand, aptly described as a "fickle fleeting 
thing," might decline. 9 Despite the likelihood of his happening at 
some time in the future, company leaders concluded that the history 
of companies in general was that they either grow or fail, and there-fore 
there was no question that Beloit must grow. 10

There was another reason beyond market and demand that pushed 
the company toward expansion. The company was family owned, and unlike 
in many other family owned companies, a very high percentage of 
corporate profits were retained in the company rather than distributed 
as dividends to family members. This was a major reason why the 
company had prospered so long; it poured back its earnings into plant, 
equipment, and research. It also financed its own expansion. Even 
though it had established lines of credit no long term borrowing had 
ever been necessary. 11 Although the result was the personification 
of the capitalist dream it ran afoul of tax policy. Beloit was subject 
to a tax on what was called the unreasonable accumulation of surplus. 
They were subject to penalties unless they paid out more in dividends 
thus making this money subject to second taxation as a part of the 
stockholders' individual income. The only way to avoid this problem 
was to invest a high proportion of company earnings into expanding 
the plant and buying new equipment. In reality this meant growth 
elsewhere since the company's location in downtown Beloit precluded 
much more expansion there. 

Both Beloit and the paper industry as a whole had been growing at 

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a tremendous rate every decade since 1920. Excluding the World War 
II years, the paper industry had an approximate 60% increase in production 
every 10 years. In comparison, Beloit sales in constant 
dollars over this same period showed a 120% increase each decade. 
Thus, Beloit was growing at a rate double that of the paper industry 
which in turn was growing much faster than the economy. According to 
future predictions, growth within the United States paper industry 
was projected at 35 to 40% in each succeeding decade. 12

Beloit was clearly riding the tip of a great paper wave in a 
country that was by far the world's leading producer and consumer 
of paper products. While the United States produced more than half 
of the non-communist world's paper supply, production in the rest of 
the world was projected as mirroring the increases in the United 
States. Standards of living were rapidly increasing, especially in 
Western Europe and Japan, and there was a direct correlation between 
paper consumption and standard of living. Beloit, thus, had a chance 
to take advantage of its own technical and financial dominance and 
to exploit the advantages of being a United States company at a time 
when the United States was at the height of its worldwide influence 
and power. 

According to the market surveys expansion of paper production 
would be heaviest in the United States, Canada, Western Europe and 
Latin America. These regions had many if not all of the following 
qualities: available capital for investment, good economic climate 
for foreign investment, relatively high standard of living, and raw 
materials necessary for paper production. 13 Beloit was anxious to 
get more involved in all these areas and did so beginning in the late 
1950's; 

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Domestic and foreign expansion occurred rapidly after Downingtown 
was purchased and became the Beloit Eastern Corporation in 1955, In 
the 6 years between this event and Elbert H. Neese, Sr. 's death in 
1961, the company was transformed from a single location company to 
one that had expanded to 3 locations in the United States, had interests 
in companies in Italy and Great Britain, had licenses in Japan and 
Great Britain, and had sales offices in a number of countries around 
the world. Downingtown was thus the first in a long line of acquisitions, 
interests, licenses, and sales offices that continues to expand practically every year.

Not all of these have been unqualified successes, and Downingtown 
was to have a star crossed history. As previously noted, Downingtown first became the Beloit Eastern Corporation, a corporation wholly owned by the grandchildren of E. H. Neese, Sr. and Laura Aldrich. It was a separate corporation that had separate staffs but the same board of directors as the Beloit Iron Works. In its early years 
it provided a welcome capacity to speed up deliveries for the heavily 
burdened Iron Works, and it was profitable. 

Shortly after Downingtown's acquisition, Harry C. More, Alonzo 
Neese, and Elbert H. Neese, Jr. became the sole owners of the Beloit 
International Corporation C. A. (BICCA), a Venezuelan corporation with 
export offices in South Beloit, Illinois. BICCA was the successor 
of the 1950 Beloit Export Corporation which had been set up to obtain 
tax benefits for overseas sales of paper machinery. BICCA was empowered 
by the Iron Works to sell Beloit's products overseas and to 
conclude licensing agreements with foreign corporations. It continued 
the tax advantages of Beloit Export Corporation since, as a Venezuelan 

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corporation, profits from Beloit's sales and licenses abroad were not 
subject to United States income tax until the money was returned to 
the United States. In the meantime the money could be used to 
finance further foreign sales or other activities beneficial to the 
Iron Works. By the late 1950's, BICCA's sales offices were located 
in Zurich; Paris; Pinerolo, Italy; and Montreal, and Beloit had sales 
agents in South Africa and Argentina. 14 

BICCA was significant in its own right but was also an integral 
part of a reorganization move in 1962 shortly after the Beloit Iron 
Works had changed its name to Beloit Corporation, a Wisconsin Corporation. 
The purpose was to reorganize the company in a tax free 
way and also make it a Delaware Corporation. This was done by having 
Beloit Eastern acquire all the shares of the Beloit Corporation 
(Wisconsin) and BICCA, thus temporarily making it the parent corpora-tion. 
Then Beloit Eastern (Delaware) changed its name to Beloit 
Corporation (Delaware). The end result was a Delaware registered 
Beloit Corporation that had 2 wholly owned subsidiaries, Beloit 
Eastern and BICCA. 

By the mid 1960's Beloit had added a plastics machinery line at 
Beloit Eastern (Downingtown) but despite an influx of new capital for 
plant and equipment the division failed to be profitable. Finally a 
combination of losses, weak management, and a militant union led to 
the decision to close the plant in 1971. The plastics division was 
transferred and the plant was sold. This was a sad end to Beloit's 
first major acquisition. Fortunately the other early expansion activities 
were more successful. Perhaps the biggest star in the long run was Beloit-Italia S. P. A. 

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Beloit's next acquisition which was made in 1957. The market situation 
was the major impetus to Beloit's action because the company had learned 
that United States machinery was 20% more expensive than machinery 
made in Western Europe. 15 E. H. Neese, Jr. and Harold Tower, then 
Controller, were Beloit's original negotiators and after some difficult 
negotiations and disagreements over the value of the plant and equipment, 
Beloit acquired a majority interest while Italy's leading paper 
company had a minority interest. 16 While the final price was considered 
a bargain many of the working conditions were quite primitive 
and required immediate modernization. Modern plumbing, lighting, and 
other amenities quickly transformed the plant into an up-to-date 
facility. In the process old ways of doing things, like having a 
private entrepreneur move the castings from the foundry to the plant 
by donkey and cart and having employees occasionally searched while 
leaving the plant, were phased out. 17

In a very short time Beloit-Italia became a profitable and progressive 
division. The Italian plant soon got orders for equipment 
that would have been impossible for the Beloit plant to build. Even 
in borderline orders, where United States prices were almost 
competitive, Beloit became competitive by supplying some of the less 
difficult and less complicated machine parts from Italy. 

Like Downingtown, Poccardi Pinerolo Mechanical Workshops, the 
original Italian company, had had a long experience with paper 
machines -primarily as a rebuilder. This, combined with the price 
and the plant's location in Pinerolo, Italy, was the determining 
factor for Beloit's decision to expand. Italy, a charter member of 
Europe's Common Market that officially began on January 1, 1958, 

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was a good base for sales into the other members of the Common Market. 
At that time most Western European paper companies were not interested 
in the high speed, high production equipment that Beloit had become 
famous for and consequently could not afford to pay high American 
prices for conventional equipment. Therefore, the plant in Italy 
could supply conventional equipment at a profit to Common Market 
members. 18 Later as European companies became more interested in 
high speed, high production machines, Beloit adapted to meet that 
market as well. 

In less than a decade Beloit-Italia sold 45 paper machines to 
mills in Italy, France, Belgium, Austria, West Germany, Colombia, 
Argentina, and Brazil. In short, it had expanded from its original 
purpose of serving the Common Market to include sales to &he Balkans, 
Africa and South America. During this time it also achieved a reputation 
for superior workmanship that rivaled Beloit's domestic 
reputation. The reputation was aided by new and improved facilities, 
new tools, its own engineering, methods and production departments, 
a computer center, a microfilm library and a staff of linguists. 19 
This success in Italy which has continued through 1979 has been 
matched by a different kind of success story on the other side of the 
world between Beloit and Mitsubishi Heavy Industries of Japan. In 
the 1950's Japan was rapidly rebuilding from World War II devastation. 
Japanese industries were particularly known for their ability to copy 
western technology and sell the result cheaper than their competitors. 
Iron Works personnel were interested in getting into the Japanese 
market but feared that Beloit's market leading patented inventions 
and engineering knowledge might be compromised by Japanese entrepreneurs. 

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Harry Moore and other company officials had personal knowledge of 
what had happened at Great Northern Paper. Japanese industrialists 
visited the plant and inspected Great Northern's Beloit-made, number 
5 machine. The Japanese engineer had a great memory and also a 
peculiar way of working his fingers to get the machine dimensions 
so closely that every dimension was within a close tolerance. Then 
they all went home and the engineer copied Great Northern's number 5. 
The one place that they could not copy was the inside of the headbox 
so they visited Beloit shortly afterwards offering to buy a headbox. 
Before signing the purchase order, they asked to see the inside of 
the headbox. Then, without purchasing it, they went back to Japan 
and copied it. Beloit officials were suspicious and visited the 
Japanese plant and confirmed those suspicions. Then the question 
became should Beloit let them copy, sue them, or find a reputable 
Japanese firm to work with and to take out Beloit patents. 20 
The decision was to search for a reputable Japanese firm, and 
Mitsubishi Heavy Industries was suggested. Both Albert Neese, Sr. 
and Bill Goodwillie needed to be convinced that this was a good idea 
So Beloit sought out the advice of Westinghouse, a United States 

company that had been dealing with Mitsubishi since before World War 
II. Westinghouse vouched for Mitsubishi's reliability and probably 
convinced Beloit by noting that even during World War II, Mitsubishi 
put license fees they owed Westinghouse in an escrow fund to be paid 
after the war was over. This example was very important to Beloit, 
and the result was a 1957 licensing agreement between Beloit and Mitsubishi. 
21 This has been a successful joint venture ever since, usually 
returning Beloit hundreds of thousands of dollars every year. 

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After the Mitsubishi agreement two more ventures were made in 
1958 -the hundredth anniversary of the founding of the parent 
company of the Iron Works. The first of these has performed consistently 
well ever since but the other, which started out with some 
promise, turned sour by the middle 1960's. Beloit acquired the 
assets of the E. D. Jones and Sons Company of Pittsfield, Massachusetts 
in November, 1958. Jones and Sons had been founded in 1845 and was 
still owned by the same family. It was a well known manufacturer 
of stock preparation equipment for paper mills and a natural acquisition 
for the Iron Works.

The Jones family had come to the conclusion by the mid 1950's 
that it needed to spend more money on research and development and 
that it needed more manufacturing space to expand its product line 
in order to compete with the concentrations then going on in the 
paper industry. After rejecting the idea that they could go it alone, 
they sought a partner for a sale or merger. S. Harley Jones, the 
President, had three criteria for a partner: the Jones Company had 
to stay in Pittsfield or its environs; a new plant had to be built; 
and the merger or sale should be with a company already serving the 
pulp and paper industry. A number of possibilities for sale or merger 
including one to Textron were considered before Beloit entered the 
picture. 22 

In 1956 the Iron Works had made a preliminary study, but they 
were then involved in their own expansion projects so no offer was 
made. Finally in 1958, after more studies and an independent appraisal, 
Beloit made an offer and it was accepted. Following the sale B& it 
set up a wholly owned separate corporation called the E. D. Jones 

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Corporation with S. Harley Jones as President. By January, 1959 
Beloit agreed to build a new plant in nearby Dalton, Massachusetts 
and to increase both sales and engineering personnel. Within a year 
the plant was completed and the new people moved in. Since the 
early 1960's, the plant has been expanded and in 1964 the E. D. Jones 
Corporation was changed to Jones Division, Beloit Corporation. 23 In 
the 1970's Jones Division continues to emphasize pulp preparation 
equipment but is also headquarters for Beloit's venture into the plastics 
field. 24 

This venture into pulp preparation equipment turned out to be a profitable diversion for Beloit. It expanded Beloit's product line and helped make the company more competitive, but it inadvertently led Beloit to a related but disastrous idea. 25 

With its entrance into the stock preparation field Beloit was moving back towards the 
trees, but when it literally got to the trees with the establishment 
of the Woodlands Division in 1963 the results were disappointing. 
Movement in that direction began in 1958 with the establishment of a 
Special Products Division headed by B. L. Hammill. The purpose of 
the new division was to seek defense contracts and other diversifications. 
26 The division was set up because paper machine sales seemed
to have peaked and the future did not appear promising. Beloit reduced 
its operations considerably and sought sales in these new areas in 
order to ride out the down cycle so common to the paper industry. 
A Washington office was established to help get government work and 
2 salesmen were hired to sell Beloit's foundry products in Detroit. 
Then a Special Products sales force was established in Beloit to "comb 
the countryside, selling machine shop, foundry, erecting, engineering 
work -anything they could to keep [Beloit's] facilities in operation." 

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While the results were not spectacular, they were beneficial. Moreover, 
Beloit began to develop an understanding of diversification. 27 
Despite a leveling off of sales, the late 1950's and early 1960's 
were the most profitable in Beloit's history to that time. Consequently, 
cash was available for investment purposes, and once John 
Walsh took over as head of the Special Products Division in 1961, 
Beloit began to get involved in diversifications.

The first diversification was started earlier and was done by 
necessity not by choice. The results were hilarious (at least in 
retrospect) but costly. The saga began in the late 1950's when Beloit 
got involved in building two pith pot machines for the Pullen Molded 
Products Company of New Iberia, Louisiana. Pullen was a manufacturer 
of seedling starter and transplanting pots molded from agricultural 
byproducts. Since they were located in Louisiana's sugar cane country, 
they sought to use the final byproduct of cane to make pots. After the 
juice was squeezed out of cane to make sugar, the fiber could be used 
to make paper. What was left was the pith, and Pullen wanted Beloit 
to design machines to use this pith to make pots. Their competitors 
made pots out of peat but they thought pith was more practical and 
less pricey. Lloyd Hornbostel was persuaded that their plans were 
possible and so he designed the machines. His machines produced 
SO many pith pots that Pullen probably could have provided more than 
the planet required in a short period of time. When the machines 
were running they propelled with pith pots past the production people 
on to the plant pavement. While two machine tenders "shoveled like 
hell" to get the pots out of the way about 25 women tried to pile them 
and place them in plastic wrappers. 

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Not only was this an inefficient operation, its product tended 
to disintegrate in the plastic. Moreover, Pullen had not developed 
a marketing scheme and was losing money. Consequently, Beloit could 
not be paid. Finally Beloit agreed to take a management contract 
and stock in the company. Milford E. Sandell, the Sales Manager of 
the Special Products Division, was named Vice-President and General 
Manager of Pullen.

The debacle continued through new ownerships but Beloit retained 
its stock in hopes of regaining some of its lost money. It never has 
although it still owns shares of Arcata, a successor company. In the 
1970's it has donated some of these shares every year to the United 
Givers Fund in Beloit. This is a tax advantage for Beloit and a readily 
saleable and valuable addition to United Givers. 29 

The Pullen Molded Products scheme was done through the Special 
Products Division but it obviously was not their idea or fault, and 
Harry Moore retained his interest in Special Products. By the early 
1960's when Beloit was doing about 30% of its business overseas, an 
internal study concluded that because of the new trade blocs and 
international competition this percentage would be difficult to maintain. 
30 The company then decided on well planned, aggressive diversifications 
beyond the paper mill thinking that this would make then less 
vulnerable to the price cutting then going on among their domestic 
and foreign competitors. The details of this diversification were 
left to John Walsh and the Special Products Division. By the mid 
1960's a great deal of diversification had occurred and goals far 
exceeding those originally set had been reached. 31 Unfortunately, 
many of these diversifications later turned sour. These activities 

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as well as the activities surrounding another mid 1960's diversification 
idea, Beloit Integrated Projects Ltd., are best described after Beloit's 
two other early 1960's foreign expansions in England and Canada are 
detailed. 

The Walmsley (Bury) Group Limited of Lancashire, England was the 
leading papermaking machinery company in England. It had been in 
business for almost 100 years, and it dominated paper machine sales 
in the British Commonwealth. By 1959 it was expanding and retooling, 
and it needed an influx of capital. The Beloit Iron Works provided 
that capital in 1960 and in return got a licensing agreement and a 23% 
interest in Walmsley. Walmsley used the money to build new machine 
tools and a modern foundry that was completed in 1961. These activities 
were the beginning of a long term cooperative relationship between the 
two firms which culminated in thelatter1970's when Beloit bought 100% 
of Walmsley and made it a wholly owned subsidiary. 

This result was very different from Beloit's original purpose 
of 1960 which was to work out a mutually satisfactory way to sell 
machines within the British Commonwealth and to combine Walmsley's 
research with its own in order to be more competitive in the inter-national 
market place. Great Britain was also a member of the European 
Free Trade Association at that time along with the Scandinavian countries, 
and Beloit hoped to use these advantages to make her machines more price 
competitive in Scandinavia since English costs were about 20% less than 
32 .-' those in the United States. 

Beloit quickly found that Walmsley's Chairman, Percy Holland, was 
a very cooperative individual anxious to collaborate with Beloit. By 
1962 this collaboration was bearing fruit as Walmsley's sales increased 

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30% from 1961 and profits were up. Some of the increase was due to 
Beloit designed machines made in England and sold in South Africa, 
New Zealand, England, and Holland. 33 

With the good experience in England in hand Beloit sought to 
expand into Canada in 1962. Canada with its vast forests had long 
been a major world supplier of pulp, newsprint and other paper products. 
Because of tariff barriers and strong feelings of nationalism, Beloit 
leaders knew that if they wanted to compete in Canada they would have 
to do it from a plant in Canada. After making their wishes known in 
Canada, they were contacted by the Simard family of Sorel, Quebec who 
possessed an appropriate plant lying practically empty.

The Simard family had started a small shipyard in 1917 and had 
expanded it within 20 years to include a large fleet of dredges and 
nearly 1000 employees. In 1937 they purchased a Canadian government 
shipyard after contracting to do the government's dredging work. To 
raise money to build a factory they attempted to persuade a French 
industrialist, Eugene Schneider, to use some of the money he got from 
selling his majority interest in the famous Skoda arms works in 
Czechoslovakia to go into partnership with them. Schneider had 
correctly for seen Hitler's intentions in Czechoslovakia and in the 
rest of Europe and was anxious to leave and invest in Argentina. The 
Simards, however, emphasized the safety of Canada and the traditional 
language and cultural ties with France. As a result Schneider came to 
Canada and together they built a plant which was begun August 17, 1939 
just 2 weeks before World War II began with the German invasion of 
Poland. The plant was finished by Christmas 1939 and immediately 
began building a British order for 100 25-pound field guns -the first 1

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time Britain ever ordered armaments made outside the British Isles. 34 
By mid-1940 France was defeated and Britain faced Germany and . 
her allies alone. More importantly as a result of the German armistice 
with France, French nationals outside of France were not supposed to 
continue working for the Allies. Consequently, all but one of the 
French munitions engineers that Schneider had brought with him re-turned 
home to France leaving only inexperienced men in the well equipped 
plant in Sorel. At this point the Canadian and British governments 
stepped in and told the Simards that since their plant was the only 
arsenal in Canada it would have to be enlarged to ensure greater production. 

The two governments added a 14 million dollar addition to 
the original 7 million dollar plant and brought Chrysler in to manage 
the plant. The company arsenal performed with distinction throughout 
the war -Winston Churchill even stated that the Sore1 25-pounder guns 
were the best allied field guns in the war. When the war ended the 
Simards repurchased the Schneider interests and the government investment 
in the plant. Yet the plant failed to prosper, except for a short 
time during the Korean War, and the Simards were forced to sell part 
of it to Crucible Steel in 1959.35 

By 1962 the Simards had heard of Beloit's interest in finding a 
Canadian partner for papermaking. They pursued Beloit, and after 
negotiations a new company:. was formed, Beloit-Sore1 Ltd., owned 60% 
by the Beloit Corporation and 40% by the Simard family. 36 As in its 
Italian and British ventures Beloit later bought out the Simards. 
The decision to go foreign in the late 1950's was paying off 
handsomely for Beloit by 1962. With part-ownerships in plants in 
Italy, England, and Canada the major paper machine markets in the 1

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world were now open to Beloit-made machines without the nationalistic 
problems of tariff barriers and financing. While the Japanese license 
with Mitsubishi aided Beloit in the Far East, Italy served the Common 
Market, England the European Free Trade Association and the Commonwealth, 
and Canada served its own large domestic market. Each country also had 
its own government organization to aid export financing. With all 
these plants Beloit would even be more competitive in continuing to 
serve its old customers like Scott, Kimberly Clark, and International, 
all of whom were building plants overseas.

To keep this multinational organization number one despite the 
domestic and foreign competition was an arduous task. It was aided 
by Beloit's decision in 1955 to set up its own research facility. 
Elbert H. Neese, Sr. was fond of the Biblical saying "You have to 
cast bread upon the water and it will come back 100 fold." Until this 
time Beloit certainly had done plenty of research but it was often 
haphazard and dependent upon the interests of its resident geniuses 
like Earl Berry and Lloyd Hornbostel. E. J. Justus, a young engineer 
that Beloit had hired in 1950, finally asked Neese for 1 million 
dollars to start a research laboratory. When asked to justify it he 
replied "by the time you need it, it will be too late." Harry Moore 
and other company leaders agreed on the merits of a research lab, and 
Justus was put in charge of it. Justus was given a good budget to 
hire people and it was in full operation by 1957. He hired bright 
young men with advanced degrees, some straight out of the Institute 
of Paper Chemistry of Appleton, Wisconsin, but none were hired from 
competitors because Beloit was already ahead of them. 37 

Beloit had long been known for its willingness to take chances, 
to have faith in its product advances and to stand by them and take 

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them back if they did not work as planned. As a technologically 
daring company, it tried to swing for the homeruns knowing that it 
would occasionally strike out. 38 With the research laboratory they 
hoped to improve their slugging percentage by eliminating most strike-outs 
in the laboratory before trying them on customers' machines. 
They also planned to continue the joint research projects with 
individual paper companies that had led to product improvements before. 
It soon became clear that although a research lab was set up, 
its location in a "dirty corner of the main plant near the tool room" 
was inadequate. 39 But even this small facility was unique among the 
paper machine companies, and it was a Mecca for those in and out of 
the company interested in using it. 39 Nevertheless, something much 
better was needed. 

As part of the general expansion activities going on among Beloit 
and its affiliates in the 1959-1960 period, President Moore decided 
to build a completely new research center on land the company owned 
between South Beloit and Rockton, Illinois about 4 miles from the 
main headquarters in downtown Beloit. In 1961 the building was 
completed, equipped and in full operation near another new facility 
used by the welding and fabricating shops. 

Moore has since believed that Beloit waited about 5 years too 
long to build its own research facility. This may have been true 
but Beloit had remained the technical leader even without a research 
center. Once it was in operation it concentrated at first on fluid 
mechanics, pressing, drying, acoustics, and shortly thereafter paper 
coating. 40 

Justus designed the Research and Development Department to be a 1

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super technical group established to ensure Beloit's technical pre-eminence 
in its products. These products were primarily, but not 
entirely, paper machine parts. They applied the knowledge they picked 
up in paper machine technology to contiguous interests that Beloit 
had developed in plastic paper coating, in drying systems for food, 
and in molded fiber shell cases for the army. Thus they not only 
improved Beloit's traditional products but developed new products, 
and their budget increased accordingly. By 1962 research and develoment 
in Beloit was an almost $2 million a year operation with about 
20% of its budget devoted to new products. 41 

At that time Beloit was deeply involved in trying to develop its 
Special Products Division under John Walsh and Integrated Projects 
Division under Donald Simonds. 42 Special Products Division aimed to 
develop new products outside of the paper machinery line while Integrated 
Projects offered complete sales, engineering, and service to paper mills 
throughout the world in hopes that Beloit could begin to handle turnkey 
projects -the building of paper mills from the ground up. 

Beloit underwent rapid changes from 1955 to 1962 with the acquisitions 
of Downingtown and Jones, the decision to go foreign in Italy, 
England, and Canada, the building of the research center, and the 
attempts to diversify which were just getting off the ground, Before 
Elbert H. Neese, Sr. died unexpectedly in the autumn of 1961, he often 
reflected on the great changes that he had seen at the Iron Works in 
the 45 years of his leadership as Vice-President to 1932, President 
from 1932-1952, and Chairman of the Board since 1952.43 He was one 
of the most loved and most effective members of the paper industry, 
and although he had deferred to Harry Moore's leadership after 1952, 

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he remained influential at the Iron Works until he died. Perhaps 
it was appropriately symbolic that the Beloit Iron Works changed its 
name to the Beloit Corporation on January 1, 1962 just a few months 
after his passing. 

The 1952-1962 years were also a period of great transition in 
United States and World History. Under the calm leadership of 
President Eisenhower and his not-so-calm Secretary of State, John 
Foster Dulles, the United States seemed to be drifting through the 
Eisenhower equilibrium at home while remaining militantly anti-communist 
abroad. Joe McCarthy, the scourge of the early 1950's, was discredited 
by 1954, and dead by 1957. Students were described as the silent 
generation supposedly more practical than idealistic. Eisenhower 
and the Republicans for the most part sought to limit the influence 
of the national government on people's lives in contrast to the activism 
of the Roosevelt-Truman years. The rise of rock and roll seemed to 
be the major issue separating generations. Gas was plentiful and 
cheap with occasional price wars driving its price down to less than 
256 per gallon. United States-Russian relations had not fundamentally 
changed since Stalin died in 1953 but a summit conference was held 
in 1955 and something called "The Spirit of Camp David" was ballyhooed 
in the press. Race relations had the impetus to change after the 
Supreme Court's school desegregation ruling in 1954, but little progress 
was being made by the end of the 1950's even though Ike finally 
sent federal troops into Little Rock, Arkansas in 1957 to uphold the 
law. 

On the international scene Khrushchev was firmly in control in 
Russia by 1936, and he denounced the crimes of Stalin. During this 

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period he would threaten to "bury" the United States and prophesied 
a war unless the United States got out of West Berlin. The United 
States continually lost planes in and around the borders of Russia, 
and the destruction of the U-2 and the capture of Frances Gary Powers 
deep inside Russia scuttled the 1960 summit conference. The world 
was slowly changing from the bipolar arrangement with the first signs 
occurring in the late 1950's as Soviet technicians were forced out of 
the Peoples Republic of China. At about the same time the United States 
was failing to keep DeGaualle's France in line behind our leadership. 
Colonialism was breaking down and each year saw the rise of new nations. 
This would accelerate in the 1960's. 

John Kennedy ran for the Presidency in 1960 on the theme of 
getting America going again. After he defeated, Nixon in an extremely 
close race, his rather militant idealism began to touch the heart of 
many Americans. He discovered however that once he was President the 
"missile gap" issue that he had campaigned about was not a reality. 
He did inherit an invasion plan to overthrow Cuba's Fidel Castro, 
but the operation was an ignominious failure that tarnished America's 
reputation and may have encouraged Khrushchev to talk and act tough. 
Civil rights was becoming the premier domestic issue by this time, 
but Kennedy was increasingly preoccupied by foreign policy. He met 
Khrushchev in Vienna in the summer of 1961 to no avail, and shortly 
thereafter the whole world watched construction of the Berlin Wall. 
This solved the Berlin problem, but the Soviets retained the initiative. 
During this same time, the Kennedy administration, reiterating what 

they said were Eisenhower's promises, was slowly committing more and 
more Americans into the civil war then going on in South Vietnam. 

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Ironically, most foreign policy experts believed neighboring Laos 
was the real danger area in Southeast Asia. By 1962 the stage was 
set for the biggest confrontation of the Cold War when the United 
States caught Russia trying to send missiles into Cuba. The resulting 
Missile Crisis brought the world to the brink of World War III before 
it was over, but perhaps it taught the super powers restraint. In 
retrospect, some historians have seen the Missile Crisis as the end 
of the Cold War and the beginning of detente. In Kennedy's remaining 
months before his tragic assassination, civil rights became the over-riding 
issue but no legislation was passed. His era ended in great 
frustration for those who believed in his potential.

Much of the decade from 1963 - 1973 would be perceived as being 
out of control to many Americans as the country seemed to come apart 
at the seams. Assassinations wiped out spokesmen on the left, center, 
and right, civil rights legislation was passed but confrontations 
became destructive, ugly, and deadly, and the United States slowly 
sank into the quagmire of Vietnam. The Presidents during this period 
were not assassinated; they self-destructed -Johnson over Vietnam 
and Nixon over Watergate. The economy got overheated and both inflation 
and the probable scarcity of petroleum products had become political 
issues in the late 1960's and early 1970's. 

These were difficult years for the newly reorganized Beloit 
Corporation as well. Sales boomed from 1963 through 1967, but profits 
declined from then until the early 1970's. As paper companies retrenched 
and cut back on expansion projects, both sales and profits declined. 

The company remained profitable but in some years only barely. The 
reasons for the low profits were usually different each year, but they 

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certainly were affected by the poor diversification choices that the 
company made in the early and mid 1960's. 

The Special Products Division seemed like a good idea even after 
the Pullen Molded Products fiasco. Under John Walsh's energetic 
leadership and with the expertise available from the new Research 
Center's work in related products, it seemed like a sure thing. Un-fortunately, 
none of the product lines from plastics through debarkers, 
skidders, loaders, textile machinery, and waste water equipment ever 
proved profitable and many were disasters. By the late 1970's Beloit 
retained its investment in only one of the 1960% diversifications 
and plastics still was not a money winner even after extensive efforts.

Plastics was an early 1960's diversification that centered at 
the Beloit-Eastern Plant at Downingtown, Pennsylvania. The division 
was later transferred to Beloit after Downingtown was closed in 1971. 
However, after a short time in Beloit, it was again moved, this time 
to the Jones Division plant in Massachusetts where it remains in the 
late 1970's. 

The saga began when Beloit-Eastern in its search for new products 
to develop at Downingtown bought out the plastics product line of 
the DeMattia Company. This was done with some enthusiasm as plastic 
products were being used more and more in the United States, and some 
experts saw them as having the greatest growth potential of all United 
States industries. 44 Within a few years after picking up the DeMattia 
line and with a potentially profitable future as evidence rather than 
proven successes, Beloit bought 2 more plastic companies. Both Ball 
and Jewel, a small Brooklyn company and Fimsai Ltd. of Milan, Italy 

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became part of the Beloit group in 1966. By this time Beloit's efforts 
in plastics had taken up the scattergun approach of being all things 
to all people. The company was doing a mediocre job in 6 different 
plastic product lines while most of its competition was thriving by 
limiting themselves to one or two lines. 45 

Practically every Director's meeting since the late 1960's has 
had plastics on its agenda. The scenario was repetitious. The loss 
for the current year in plastics would always be explained away by 
its great future potential, and profits would be projected for the 
next year. Each year would come and go with a loss but optimism has 
always prevailed. 46 

Much has been tried to make the line profitable. Theoretically 
there is as much potential in plastics in 1979 as there was in the early 
1960's as other companies have found it lucrative. Beloit finally 
attacked the profitability problem in the early 1970's by cutting back 
its original 6 lines to only 2 -injection molding and blow molding 
machines. Beloit-Fimsai Ltd. was also dropped as unprofitable and no 
new ventures in plastics were begun, By the mid 1970's Beloit sought 
to throttle back its interest and become the plastic experts in the 
limited areas of injection molding and blow molding machines. Plastics 
has been a major disappointment especially so since the company in its 
major selling line has long been the technological and sales leader. 
It is difficult to give up the idea that success in one area can always 
be transposed into another area through will and expertise. 
Plastics may yet be a long term winner for Beloit. Unfortunately, 
Beloit's other diversifications in the 1960's turned out to be consistent 
losers and all have been phased out or sold since then. One of 

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the most perplexing and ironic failures was Beloit's Woodlands Division. 
Woodlands seemed extremely logical for John Walsh and the Special 
Products Division. Beloit made paper machines and related equipment. 
They had bought Jones to provide a product line in pulp equipment. 
What was more logical than going one more step back to the trees and 
becoming a basic supplier for harvesting, skidding, debarking, and 
chopping up trees to make pulp. Success here would enable the company 
to supply machinery from woodyard to finished paper -from the stump 
to the dump.

In 1963 Beloit acquired the assets of the Budow Manufacturing 
Company of Birmingham, Alabama and Bob Larson Enterprises of Ashland, 
Wisconsin. Larson Enterprises was quickly renamed Beloit Hibob 
Corporation, and in 1965 both became part of Beloit's Woodlands Division. 
Budow manufactured chippers, debarkers, and chip screens and Hibob 
skidders and tree harvesters. As part of its expansion in this area 
Beloit built plants in Birmingham, Alabama and Ashland, Wisconsin. 
Company leaders enthusiastically believed that this was another 
diversification that Beloit, because of its background, could succeed 
in. However, within a short time this early promise turned sour and 
Woodlands became a consistent loser. In 1969 Harry Moore described 
it as a "great drain" on Beloit but expected it to turn around and at 
least break even in 1970.47 

It did not and Moore confessed that it was a "fantastic disappointment." 
The market had dropped out from under the company. Retrenchment 
and a buildup of inventory followed. Consequently, company leaders were 
convinced that they could not make a profit and prepared to sell the 
business. In the meantime, the plants were shut down in early 1971.

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During 1972, the product lines were sold or closed out, tools were 
moved to other Beloit plants or sold, and the building in Ashland 
was up for sale. The building in Birmingham was occupied by another 
Beloit division. 49 

This was a sad end for what had turned out to be another major 
miscalculation on Beloit's part. They had gotten involved in a new 
product line without having an established dealer network. One of 
Beloit's dealers even operated out of a railroad box car. As a con-sequence, 
the weak dealer network they were able to set up was over-whelmed 
by major competitors like John Deere and Clark Equipment who 
had large dealerships, high volume, and very competitive prices. 50 
Beloit's machine costs were also very high and potential profits low 
because about 85% of the components of tree harvesters and skidders had 
to be bought from outside suppliers. Even Beloit's hopes that these 
products could be sold to their old customers tended to backfire when 
they learned that the paper mill people responsible for purchasing 
Beloit's Woodlands products usually were not the same people responsible 
for purchasing papermaking machines. Moreover, if the Woodlands' 
product was not as effective as a competitor's product, it might make 
the mill less likely to purchase a Beloit papermaking machine. 

The Woodlands portion of the Special Products Division was a 
decade-long story of logic and good intentions gone wrong. It turned 
out to be the most costly mistake of Special Products although the 
division's other projects did not fare very well either. 52 In 1966 
when Woodlands still was thought to have great potential, 2 other 
ventures were begun. The first was called Beloit-Passavant Corporation 
and was a 50-50 agreement with Passavant-Werke of West Germany in which 

Advance to: THE HARRY MOORE ERA - 1952-1975 - Part 2

Quit