United States Gypsum Company Inc history

In 1902, 30 independent gypsum rock and plaster manufacturing companies merged to consolidate their resources and form the United States Gypsum Company.

In 1909 Avery set out to diversify the company with one of his first acquisitions, the Sackett Plasterboard Company of New York.

The evolution of Sackett Board continued and near the end of 1916, a new manufacturing innovation produced boards with a single layer of plaster and paper that could be joined flush along a wall with a relatively smooth surface.

In 1917, USG trademarked what would become its most iconic product—Sheetrock, their brand name for gypsum wall board widely used in residential and commercial construction.

New markets were built and developed in Canada in the early 1920's with the Canadian Gypsum Company subsidiary.

A 1921 USG ad billed drywall as a fireproof wall that went up with “no time [lost] in preparing materials, changing types of labor, or waiting for the building to dry.”

In 1927 CertainTeed Products Corporation introduced its own wallboard, which did not have enclosed edges, and challenged US Gypsum for market share.

By 1929 CertainTeed was beaten.

Avery also made United States Gypsum, which had already been in the lime business for 15 years, a leading lime producer in 1930 with the acquisition of lime-producing firms such as the Farnam Cheshire Lime Company.

The 1933-34 World's Fair in Chicago featured buildings made almost entirely out of Sheetrock® panels.

According to the February 1936 issue of Fortune, diffusion of production facilities allowed US Gypsum to keep transportation costs, and thus total costs down.

In 1940, a new problem confronted the company’s management when the United States Justice Department filed suit against US Gypsum and six other wallboard manufacturers, charging them with price-fixing.

In 1949, however, Chairman Avery predicted another depression—incorrectly—and began to rein in expansion.

In 1950 the Supreme Court forced US Gypsum and its six licensees—who produced all of the wallboard sold east of the Rocky Mountains—to cease setting prices, and US Gypsum was enjoined from exercising its patent-licensing privilege.

In May 1951, when Sewell Avery resigned as US Gypsum's chairman and CEO, his replacement, Clarence H. Shaver, inherited a company that had a capitalized value of $61 million and produced more than 75 commodities in 47 mines or factories.

“United States Gypsum: No Nonsense,” Fortune, September 1955.

The highly publicized project began in 1964, when US Gypsum purchased six adjoining tenements in the East Harlem Section of New York City.

Meanwhile, in 1971, United States Gypsum expanded into the distribution of wallboard and other building materials through the creation of the L&W Supply Corporation subsidiary.

In 1973 US Gypsum settled a class-action civil antitrust suit brought against it by wallboard users and buyers.

The criminal trial eventually found its way to the Supreme Court, which ordered a new trial, and in 1980 US Gypsum settled the case, agreeing to pay $2.6 million in taxes on deductions from earlier civil antitrust judgments.

US Gypsum had already begun to face property damage suits in 1984 with a $675,000 award to a South Carolina school district.

In 1985, the company changed its name to USG Corp.

By December 1986, however, USG had purchased Samuel, William, and Hyman Belzberg’s 4.9% stake, for $139.6 million dollars.

In October 1987 a partnership led by Texans Cyril Wagner Jr. and Jack E. Brown’s Desert Partners attempted to gain control of the company.

In May 1988 USG announced a restructuring and recapitalization plan designed to further block the takeover attempt, and by June the plan had succeeded.

USG--led by CEO Eugene B. Connolly starting in January 1990--attempted to reorganize outside of bankruptcy court through negotiations with its lenders.

Sold the following year were the Kinkead division (to Kohler Co.) and Marlite (to Commercial and Architectural Products Inc.). In September 1991 USG sold DAP to U.K.-based Wassall plc for $90 million.

Finally, in March 1993 USG was forced to declare Chapter 11 bankruptcy, although it quickly emerged only two months later, following the implementation of a "prepackaged" plan of reorganization.

In 1994 the housing market--and USG's future outlook--had improved enough to enable the company to raise $224 million through a stock offering, the proceeds of which were used to pay down debt.

Connolly retired in early 1996, replaced as chairman and CEO by William C. Foote.

From the company's emergence out of bankruptcy through year-end 1997, USG had spent $532 million in capital expenditures, including the beginning of construction in mid-1997 of a new $110 million wallboard plant in Bridgeport, Alabama--USG's largest nonacquisition capital investment ever.

Perhaps most indicative of its recovery was USG's September 1998 announcement that it would pay a quarterly dividend for the first time in a decade, as well as repurchase as many as five million of its common shares.

The first of USG's new wallboard plants, the Bridgeport facility, opened in May 1999, after which an older plant in Plasterco, Virginia, was shut down.

At this stage, some investors began viewing the stock as a bargain, including legendary value investor Warren Buffett, who in December 2000 bought a 15 percent stake in USG through his investment vehicle, Berkshire Hathaway Inc.

In May 2001 the company announced that it would once again stop paying a dividend.

Sales surged to $5.14 billion in 2005, when gross profits hit an all-time high of $1.1 billion.

On June 15, 2006 USG announced a Joint Plan of Reorganization to emerge from Chapter 11 bankruptcy by creating a Trust to pay all asbestos personal injury claims for which they are responsible.

With its asbestos headache seemingly under control, USG was well positioned to continue its sharp recovery, although a long-expected slowdown in the United States housing industry appeared certain to provide new challenges. It made an initial $900 million payment into the fund, and also planned to make two subsequent payments totaling $3.05 billion by mid-2007, unless the United States Congress stepped in to create a national trust to handle all asbestos-exposure cases, an occurrence most observers considered unlikely.

In December 2012, drywall purchasers began to file class action lawsuits against USG and the seven other major North American manufacturers for price-fixing.

L&W Supply was a highly valued part of the USG portfolio for four decades, until it was sold to ABC Supply in 2016 to allow USG to focus on its core manufacturing operations.

In April 2019, USG joined the Knauf group, the world’s largest gypsum manufacturer with a diverse product portfolio and global footprint.