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Throwback Thursday - History of Stanley Tools

Throwback Thursday - History of Stanley Tools
By Bill Dickson December 10, 2015 11171 Views

It’s a brand that goes back over 170 years ago. Its rise throughout the 1800s eventually turned it into a national tool making giant. Facing adversity in during the Great Depression and the Post-War era, one lone executive would innovate and modernize this brand to turn it into a global household name. This week on Throwback Thursday, Tool Parts Direct takes a look at the history of the Stanley Tool Works.

The Very Beginning…And It Starts Off Slowly

Stanley Works Founder – Frederick Stanley

After prior experiences as a clerk on the Connecticut River and a salesman in the South, 41-year-old Frederick Stanley and his younger brother William both started a company in 1831 in their hometown of New Britain, Connecticut. Their first company focused on the manufacture of door locks and house trimmings. Despite their best efforts, their company floundered and during the Panic of 1837…their business went into bankruptcy.

A popular cartoon during the Panic of 1837

Undaunted by their failure, the Stanley Brothers picked up the pieces and began working on a second business. This time, Stanley Bolt Manufacturing would be here to stay and was established in New Britain in 1843.

Stanley Begins Production and Expansion

In 1852, Stanley Tool Works became the company’s official name and one that continued until the late 2000s. During the company’s early years, Stanley began manufacturing hardware and builders’ goods to be sold throughout the New England area. While other companies were able to produce industrial goods, Stanley had an advantage as it had purchased one of the first early steam engines to help with production.

This allowed his company to produce bolts, t-hinges and other related goods in a timely manner and increase efficiency as well. Despite these advantages, Stanley’s financial growth was modest in 1850s and throughout the American Civil War.

After the American Civil War ended, the company eventually ramped up its own modernization and mechanized its production in the 1860s and 1870s. This growth was headed by a young and eager executive who saw great potential in Stanley’s business model.

Enter William Henry Hart

A sketch of Stanley Tool Works – 1879

Before joining Stanley Tools in 1854, 19-year-old William H. Hart worked in the railroad industry as a freight agent and assistant station manager. Those skills would come in handy during his time in Stanley Tools. When Hart first started at Stanley, he rose through the ranks quickly. He became the Treasury Secretary after joining the company and won election to the board of directors by the time he was 21.

Later on, he would become President of Stanley Works and would remain there until he retired in 1915. Hart was instrumental in opening new facilities and expanding throughout the country. He expanded production facilities in New Britain throughout the 1870s and 1880s to keep up with demand. He also helped the company reduce costs by increasing mechanization throughout the company.

Hart was also instrumental in how technology changed not only the company, but the country. Stanley Tools held many different manufacturing patents…including creating a hinge that used ball bearing in 1889. Hart also made sure to diversify the company’s holdings and produce a larger, fuller product line. He opened a new plant in Niles, Ohio in 1909.

William H. Hart – Later in Life

The company’s expansion was nothing short of extraordinary from the beginning of the Civil War to the end of World War I. In 1872, the company’s net sales reached $480,000. Hart stepped down and retired in 1918. But, not before the company he helped turn into a powerhouse made profits over $11 million a year. Hart passed away in 1919.

The Roaring 20s Sees Greater Expansion

Stanley Advertisement – 1925

Even though Hart stepped away from the company, Stanley did not alter their way of business in the 1920s. In fact, Stanley began to acquire other companies including its friendly rival, the Stanley Rule and Level Company. (The Rule and Level Company was started by a Stanley cousin across town.) After the merger between the two companies, Stanley Works had close to 1200 employees and over $6 million in sales during the 1920s. The company also cut down on its energy costs by purchasing and rebuilding the nearby hydroelectric power plant on the Farmington River.

It was also during this time that Stanley began to expand internationally as well. It created factories in England and Germany during the inter-war period. Electric tools were also introduced in 1929. While Stanley flourished in the 1920s, the 1930s and 1940s would be a time of adversity for the company.

The Great Depression Hits Hard and other Post-War Struggles

A bank run during the Great Depression

Despite a winning formula and culture of growth and profits, it wasn’t enough when it came to the Great Depression. The Depression hurt Stanley Tools just like a number of other businesses all across the nation. Stanley’s profits declined and their manufacturing and construction-related industries were hurt badly. The company’s net income went negative in 1932 and started to run a deficit in 1934.

The company stagnated and stabilized their losses, but still struggled during the 1930s. When World War II broke out, Stanley transformed itself into a military manufacturer. It helped create machine gun belt clips and cartridges to help in the war effort.

Stanley Worker in Factory – 1943

War sales did help the company regain its financial footing. Stanley made $44 million in 1943 alone, but war sales were only temporary. Stanley Tools would continue to face difficulties when the war was over.

The 1950s saw little improvement to the company’s bottom line. Despite making high quality tools and equipment, several executives put little emphasis on marketing or other financing issues that were plaguing the company at that time. Profits did go up slightly during the post-war construction boom, but it wouldn’t be until the 1960s when things would turn around.

The Company Revitalizes

While Stanley Tools was floundering business-wise, a bright energetic young businessman was coming into his own. Donald W. Davis was born in 1921 in Springfield, Massachusetts. After serving in the Navy during World War II, Davis joined the company in 1948. He rose through the ranks rapidly and was promoted from general manager of the steel strapping division to executive vice president in 1962.

Davis pretty much took control of the company and he was later named as President and CEO of Stanley Tools. As soon as Davis took the reins, he transformed Stanley into a business power once again and a global competitor.

Donald W. Davis at Stanley Tools

Davis realized that in order for Stanley to competitive again, the company had to adopt an aggressive, growth-oriented attitude. He also realized that Stanley had to compete globally as well in order to continue to remain a player. He called for increased competitiveness and faster growth. He helped modernize plants and pursued mergers with other profitable up-and-coming companies. He advocated selling off divisions that weren’t profitable for Stanley Works. He also put a strong focus on marketing and advertising.

A lot of this required money and despite the concern of other board members, Davis and his financial officer Garth W. Edwards took the company into long-term debt. This allowed the company to borrow funds immediately and allow Davis to achieve his goals without damaging the company’s financial integrity.

Once other funds were available, Davis began authorizing plant construction and modernizing older plants. Between 1979 and 1983, Stanley spent $55 million on upgrades alone. He also authorized 25 acquisitions of other companies during his tenure.

The Beginning of DIY Marketing

A Stanley Tape Measure

During the 1970s, Davis envisioned Stanley marketing not to just construction professionals, but to home improvement specialists as well. His strategy to focus on “DIY-ers” or “Do-It-Yourself-ers” opened another revenue stream that Stanley was eager to take advantage of since high construction and repair costs were costing consumers at home. This strategy was considered countercyclical and that meant that a general economic downturn wouldn’t cost the company long term.

To establish itself to DIY-ers, Stanley marketing execs worked with whole sellers and retailers to emphasize their products. They also invested heavily into television advertising to put the word out about Stanley Tools. The phrase, “Stanley helps you do things right” became a common saying in American pop culture and was translated into different languages as well. The popular phrase was coined by Davis himself.

The strategy was a huge success and profits soared. After several decades as the head of Stanley Works, Davis retired in 1989.

The 1990s and Beyond

Despite the success of the 1980s, the 1990s were a period of uncertainty and at one point could’ve been the end of the company. Weak economic conditions hurt Stanley Tools slightly, but another organization looked to purchase the company in 1991.

The Newell Company wanted to purchase Stanley in the early 1990s and both sides were friendly with each other at first. However, after the talks went no-where, Newell began purchasing Stanley stock in an attempted hostile takeover. The bought a less than 1% stake and then filed paperwork announcing its intention of boosting its take. Stanley filed an anti-trust lawsuit in 1991 and even Connecticut’s attorney general joined in as well.

This gave Newell pause for concern and eventually backed off its takeover bid. In October of 1992, Newell agreed to liquidate its Stanley assets and agreed not to purchase any more of Stanley’s stocks. In return, Stanley agreed to drop the lawsuit.

While the lawsuit was going through the courts, Stanley CEO Richard Ayers expanded business into Eastern Europe fresh after the Berlin Wall came down. The company stabilized again during the 2000s and in 2010, Stanley Tools merged with longtime rival Black and Decker.

And that does it for this edition of Throwback Thursday! Make sure you keep an eye out for future content from all of us here at ToolPartsDirect.com!