Barton Malow Heritage: 1944-1954
In 1944, the Company was honored with a contract by Aluminum Company of America to construct an office and permanent mold facility on Dunn Road in Detroit. I was 24 years old and the Project Superintendent. There was an existing plant on the old site. I applied and received a wrecking permit. Because of the scarcity of building materials, we dismantled the building piece by piece and sold the windows, radiators, structural steel and whatever else we could. In spite of my inexperience and youth, the project was successful.
The revenues for the firm were $2.3 million in 1944, and the stockholders equity had soared to $178,000. The future looked very bright. From a personal perspective, this time period was the most dramatic in the Company’s history. Quite possibly, the changes that took place in this third decade are a reason Barton Malow is still thriving today.
After surviving the Depression, which in itself was quite an accomplishment, the two owners, Carl Barton and Arnold Malow prudently invested their money. Carl invested in real estate and Arnold in the stock market. Prices were very reasonable and their investments prospered.
My 1946 promotion to General Field Superintendent allowed the owners more leisure time. Both were involved in many civic and community projects: Carl with the Y.W.C.A, Camp Oakland, while Arnold served on the Board of Children’s Hospital and Michigan Mutual Liability Insurance Company. They instilled in us a commitment to support the community, which paid personal and company dividends.
Harold Butler was promoted to Chief Estimator, replacing Sylvester Wolf, who continued to lend his wisdom and stability to the firm. Without question, Harold had one of the keenest minds I have ever had the privilege of working with. He could scan an estimate and quickly size up a project accurately. Harold and I continued building on a base of over 20 years of experience with committed and dedicated employees, many that had started with the Company in its infancy.
Volume started to escalate. Stockholders’ equity in the Company from 1945 to 1949 tripled to a net worth of $550,000, and revenues from $1.6 million to $6.35 million, with a five-year average of return of 32%. Today those figures do not seem very astounding, but 70 years ago the Company’s stature had grown with triple A accounts, a very profitable base and more importantly, a reputation of excellence and integrity.
Carl Barton had become weary of the building industry stress and had a strong desire to develop his real estate holdings. Arnold Malow, on the other hand, was well known in the industry and had a host of friends in prominent business positions. He never got too involved with operation details, but his expertise in financial matters and sales was astounding.
During this time period, following in my forefathers’ footsteps, I was ordained a minister in the Evangelical Baptist Church (Apostolic Christian) as my grandfather had been before me after he had emigrated from Switzerland. In our faith, except in the mission field, all of the ministers are expected to be self-supporting following the practice of the apostles. This unquestionably placed additional responsibilities on my life. Carl and Arnold were well aware of my convictions and were very supportive.
I was approached by Carl and Arnold to be a member of a Company reorganization plan. As the father of four small children at the time with a wife to support, and a poor country boy background, obviously there were no assets to draw upon. However, they were extremely understanding. The slate of officers and the new ownership consisted of Mrs. Malow and Mrs. Barton who would both invest $50,000 in the new corporation. Harold Butler and I would each purchase $15,000 worth of Company stock, which the Company loaned me at a reasonable rate of interest on my signature only.
Probably in the history of our Company, this period of time had the most dramatic changes and tremendously impacted me personally. When I purchased stock for the first time it opened avenues that I had not anticipated.
Carl Barton became President, Arnold Malow, Executive Vice President and Treasurer, Harold Butler, Vice President and Chief Estimator, and I as Vice President and Director of Field Operations. The four of us, along with our accountant Kins Collins, were Directors. I was 29 and overwhelmed at the responsibility and opportunity that was before me, and frightened by what I considered an awesome debt.
Harold was 52 and well versed in the industry, moderately fixed financially, and extremely capable. The two of us were very compatible, had an excellent working relationship and our efforts from the onset were profitable. The two senior statesmen provided excellent support. Carl was active in the community and Arnold continued to make contacts and provided financial strength that was essential to a thriving enterprise. The scripture well states, “Except the Lord build a house, they labor in vain that build it,” and from inception the blessings of Almighty God were upon us.
In 1952 our equity had grown to $358,000, and the Company had a net earning of $202,000 on a volume of approximately $14,000,000. We were awarded a contract by the Packard Motor Car Company, the largest the firm had ever received, to construct a new plant/warehouse and test cells for the production of jet engines under a contract with General Electric at Utica, Michigan. Albert Kahn was the architect on part of the Packard project, and it was a very harmonious relationship. The accolades gained from completing the huge undertaking helped to reaffirm the reorganized Company’s position and stature in the construction industry. Some unique products and techniques were introduced on this project in connection with the cells to test the jet engines. These cells required materials to withstand the extreme heat generated by the jets during testing. On site we built a building for precasting that was later relocated to our Oak Park, Michigan yard.
In 1952 the Company became the first construction firm in the U.S. to establish a profit sharing/pension plan for the benefit of employees. We set aside a portion of our profits in an irrevocable trust to accrue to the employees benefit to be made available upon retirement, termination of employment, disability or death. The money was tax free until the recipient had the money in hand. There is no question that this plan contributed immeasurably to the stability and growth of our Company.
In the early 1950’s we spread our operations to adjoining states, particularly in partnership with Udylite Corporation in the installation of automated plating equipment. We had approximately 2,000 employees on the National Steel account where we performed all trade work including the installation of all of the equipment in the rolling mills, track maintenance, and the relining of blast furnaces.
In June of 1953, Carl Barton resigned as President and became Chairman of the Board. Arnold Malow was elevated to President and me to Executive Vice President of the Company. Several new major accounts were added in 1953 which included the Ebling and Detroit Creameries, which later merged into National Dairies and Gobel and Koppitz, major breweries, which were eventually brought under the umbrella of the Stroh Company.
Gross sales for the year ending 1954 approached $18,000,000; dividends were paid regularly to stockholders and yield on investment was 75 percent in 1952, 67 percent in 1953, dropping to 37 percent in 1954. In 1954, a crippling strike by the CIO steel workers union brought the industry to its knees.
The settlement of that dispute completely revolutionized the construction methodology throughout the unionized industrial world. The settlement addressed the right of the various in-plant unions to regulate and their first right to any ongoing maintenance or support work in the plant. Almost overnight, we were faced with the sad task of a massive layoff of approximately 1,000 employees. This situation resulted in a full scale analysis of the Company’s philosophy, and we concluded that never again would we have all of our eggs in one market basket, a very dramatic turning point in our Company’s history.