Armstrong World Industries

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Armstrong World Industries, Inc.

Type	Corporation
Founded	Lancaster, Pennsylvania
Headquarters	Lancaster, Pennsylvania
Key people	Michael D. Lockhart, Chairman & CEO
Industry	Construction Materials
Products	Flooring Ceilings Cabinetry [
Revenue	▲$3.425 billion (2006)
Employees	approximately 13,000 worldwide
Website	Armstrong.com

Armstrong World Industries, Inc. (NYSE: AWI) is an international designer and manufacturer of floors, ceilings and cabinets. Based in Lancaster, Pennsylvania, Armstrong operates 39 plants in 10 countries and has approximately 13,000 employees worldwide. In 2006, Armstrong’s net sales were $3.42 billion, with operating income of $210.8 million.

Armstrong World Industries, Inc. emerged from Chapter 11 reorganization on October 2, 2006. Its stock began trading on the New York Stock Exchange October 18, 2006 under the ticker symbol AWI. The Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust, holds approximately 66% of AWI’s outstanding common shares. Armstrong's “Fourth Amended Plan of Reorganization, as Modified,” dated February 21, 2006, and confirmed by U.S. District Court Judge Eduardo Robreno in August 2006, become effective Oct. 2, 2006. The Plan includes a comprehensive settlement resolving AWI’s asbestos liability by establishing and funding a trust to compensate all current and future asbestos personal injury claimants. The company had filed for reorganization December 6, 2000, with the federal bankruptcy court in Delaware for reorganization under Chapter 11 because pending asbestos injury claims appeared to exceed the value of the company, and were growing.

“In addition to resolving AWI’s asbestos liability, we used the time in Chapter 11 to restructure our flooring business to make it more competitive,” Mr. Lockhart said. “We made substantial improvements in our cost structure by closing several plants and streamlining our workforce in the U.S. We have also expanded capacity to manufacture wood flooring, broadened our product lines and improved product quality and customer service.”

On January 11, 2007, Armstrong World Industries, Inc. and NPM Capital N.V. announced they were negotiating the sale of Tapijtfabriek H. Desseaux N.V. and its subsidiaries, the principal operating companies in Armstrong’s European Textile and Sports Flooring business segment, to NPM Capital N.V. The sale was finalized in April 2007.

On February 15, 2007, Armstrong World Industries, Inc. announced that it was initiating a review of its strategic alternatives.

1 History
2 Diversions
3 Environmental Record
4 Manufacturing Locations
5 Criticism
6 References
7 External links

[edit] History

In 1860, Thomas M. Armstrong, the son of Scotish-Irish immigrants from Londonderry, joined with John D. Glass to open a one-room shop in Pittsburgh, Pennsylvania, carving bottle stoppers from cork by hand. Their first deliveries were made in a wheelbarrow. He was a business pioneer in some respects: he branded each cork he shipped as early as 1864, and soon was putting a written guarantee in each burlap bag of corks he shipped from his big new factory. The company grew to be the largest cork supplier in the world by the 1890s. The company incorporated in 1891.

Cork began being displaced by other closures, but the company introduced insulating corkboard and brick. In 1906, two years before he died, Thomas Armstrong concluded that the solid foundation of the future was covered with linoleum, and construction began on a new factory in a cornfield at the edge of Lancaster, Pennsylvania. In 1909, Armstrong linoleum was first offered to the trade.

After corkboard, the logical move was to fiberboard, and then to ceiling board. Cork tile and linoleum led to vinyl flooring, then ceramic tile, laminate flooring and carpeting.

[edit] Diversions

In the 1920s, the Armstrong Cork Products Company and Sherwin Williams company were the largest industrial customers for hemp fiber.

In 1938, Armstrong bought Whitall Tatum, a leading manufacturer of glass stand-off insulators for utility poles since 1922. The existing molds were eventually replaced with molds bearing the Armstrong name. In April 1969, the business was sold to Kerr Glass Manufacturing Corporation. Demand was rapidly dropping, as utilities were converting to ceramics or going underground, and Kerr moved production to their Dunkirk, Indiana factory in the mid-1970s, and ceasing production several years after that.

During World War II, Armstrong made 50-caliber round ammunition, wing tips for airplanes, cork sound insulation for submarines, and camouflage.

In 1952, a group of leading industrialists that included Alfred P. Sloan of General Motors, Frank W. Abrams of Standard Oil Company of New Jersey, Henry Ford II of Ford Motor Company, John L. McCaffrey of International Harvester, Irving S. Olds of United States Steel Corporation, Henning W. Prentis of Armstrong Cork Company, and Laird Bell of Weyerhauser Timber formed the Council for Financial Aid to Education, which increased corporate gifts to colleges from $24 million annually to $136 million annually over ten years.

In 1958, Armstrong Cork Company created "Armstrong Contracting and Supply Corporation". Armstrong Cork had done insulation contracting since the early 20th century, originally focusing on cork products. Gradually, there was greater emphasis on high temperature insulation. In 1969, this business was sold in a leveraged buyout to 31 existing and retired employees of the contracting company, which became Irex Corporation.

C.U.E., Inc. started as the Polyurethane Division of Armstrong Cork in the 1960s. CUE comes from "Custom Urethane Elastomers" The Fluorocarbon Company of Anaheim, California bought the division in 1972. On April 7th, 1986, a group of seven employees acquired the division, in a leveraged buyout.

In 1964, Armstrong bought Phoenix Chair Company, following up with Founders Furniture Company in 1965, Western Carolina Furniture Company in 1966, and both Thomasville Furniture and Caldwell Furniture in 1968. In the 1970s, they expanded with a low-end bedroom furniture line. They bought Gilliam Furniture in 1986, built a new factory in Carysbrook, Virginia later that year, bought Westchester Group in 1987, and Gordon's in 1988; as well as making a major expansion to Thomasville that year. In 1995, the business was sold to Furniture Brands International, the leading manufacturer of residential furniture, with such brands as Broyhill, Lane, and Drexel Heritage.

[edit] Environmental Record

Armstrong Holdings Inc. used to produce asbestos, either of two incombustible, chemical-resistant, fibrous mineral forms of impure magnesium silicate, used for fireproofing, electrical insulation, building materials, brake linings, and chemical filters,^[1] before they started to manufacture interior furnishings, however, on November 16, 2000 it was reported that Armstrong Holdings Inc. was facing about 173,000 asbestos personal injury claims that would cost between $758.8 million and $1.36 billion through 2006. They have filed bankruptcy because of all their asbestos liabilities.^[2]Armstrong no longer produces asbestos and now makes vinyl and wood flooring and other interior furnishings.^[3] In 2002 Armstrong Holdings Inc. was ranked number 86 on the Political Economy Research Institutes "THE TOXIC 100: Top Corporate Air Polluters in the United States" list.^[4] Armstrong now claims "We offer you a proud heritage of innovation, commitment to environmental sustainability, and operations based on integrity, respect, diversity, continuous improvement, and a passion for safety."^[5]

[edit] Manufacturing Locations

The company manufactures flooring products in the US in Beech Creek, Pennsylvania, Beverly, West Virginia, Center, Texas, Jackson, Mississippi, Jackson, Tennessee, Kankakee, Illinois, Lancaster, Pennsylvania, Nashville, Tennessee, Oneida, Tennessee, Somerset, Kentucky, South Gate, California, Statesville, North Carolina, Stillwater, Oklahoma, Warren, Arkansas, West Plains, Missouri, Titusville, Pennsylvania, Vicksburg, Mississippi, and internationally in Braeside, Victoria, Thomastown, Victoria, Montreal, Canada, Teesside, England, and Holmsund, Sweden.

They produce ceiling products in the US in Beaver Falls, Pennsylvania, Hilliard, Ohio, Macon, Georgia, Marietta, Pennsylvania, Mobile, Alabama, Pensacola, Florida, and St. Helens, Oregon, and internationally in Rankweil, Austria, Shanghai, China, Stafford, England, Team Valley, England, Pontarlier, France, Munster, Germany, St. Gallen, Switzerland, and Zurich, Switzerland.

They manufacture cabinets in Auburn, Nebraska and Thompsontown, Pennsylvania.

There are WAVE plants in Benton Harbor, Michigan, Henderson, Nevada, Aberdeen, Maryland, Shanghai, China, Prouvy, France, Team Valley, England and Madrid, Spain. WAVE is a joint venture with Worthington Industries.

There are ADE facilities in Dendermonde, Belgium and Waasmunster, Belgium, Bissingen, Germany and Delmenhorst, Germany]] and Waalwijk, Netherlands.

[edit] Criticism

On April 1st, 2007, the Washington Post drew attention to Armstrong World Industries' wood purchasing practices from developing nations. Armstrong's Frank J. Ready, chief executive of Floor Products for North America, stated he didn't think there was a need for labelling or certification of lumber origins used in their products. The article mentioned that Armstrong is not participating in the Forest Stewardship Council certification system. The Post cited banned wood product, such as teak and merbau ending up in Armstrong's factories in China.^[6]

On April 16th, the Washington Post subsequently printed a correction: "An April 1 Page One article about illicit logging in Asia reported that Armstrong Floor Products of Pennsylvania sells flooring made from tropical merbau wood with a label typically saying it is made in the United States and without disclosing that the wood came from Southeast Asia. Armstrong's merbau flooring is actually made in Indonesia and labeled as such, and the company says it has taken steps to ensure the wood is harvested legally. Additionally, the article should have included a statement from Armstrong that 95.1 percent of the wood it uses in its products is grown in the United States and Canada."^[7]

On April 16, 2007, the Washington Post printed the a letter of response from Armstrong's CEO, Michael Lockhart. In his letter, Lockhart claims the newspaper "unfairly characterized Armstrong World Industries Inc.'s wood purchasing policies."