Considering the history of Skil wouldn’t be complete without also including the background of Skil’s corporate owner since 1996, Robert Bosch Corporation.
Self-taught electrical engineer, Robert Bosch...
...started his Workshop for Precision Mechanics and Electrical Engineering in 1886, in Stuttgart, Germany.
Gaining a reputation for innovation in industrial relations, he instituted an 8-hour workday—which was uncommon at the time and not famous again until Henry Ford did so eight years later—and paid his employees more than the going rate with the belief that better pay and working conditions would encourage better performance. Also, he identified that the best way to grow the company would be through a diverse, high-quality product line.
In the early 1890s, the company entered the automotive industry and, around 1900, became a world leader in automotive ignition systems.
Bosch ignition magnetos were used in automobiles, planes, and trucks. Robert Bosch New York Inc. was formed in1906 and, over the next six years, the company established branches in Chicago, San Francisco, and Detroit. In 1912, the company opened a plant in Springfield, Mass., which “was considered one of the largest, most sanitary, and orderly factories in the automobile industries.” Already global in scope, the U.S. accounted for 70% of Bosch sales by 1914.
Wartime Challenges
Wartime years brought ups and downs to the company. For example, during WW1, trade embargoes stopped U.S. business, forcing the company to rely solely on the European market. Post-WW1 in 1918, with Germany’s economy badly battered and many companies failing, Bosch managed to stay afloat. In 1933, the year of IEN’s birth, Bosch purchased Blaupunkt-Werke and, later in the 1930s, enjoyed periods of growth because of strong industrial and military demand for electrical and mechanical products. Three years after IEN began, in 1936, Bosch was already celebrating its 50th year (and Robert Bosch himself, his 75th birthday) since having been founded in Germany. In 1937, Bosch was incorporated into a private limited company. Bosch was again limited by wartime trade embargoes, and Robert Bosch died in 1942, succeeded by Hanz Walsh. The industrialized, western zone of Germany, where the company was located, was in ruins from the war. The company picked itself up, reorganized, and rebuilt its factories. Even while American markets remained closed to Bosch, the company perfected a mechanical fuel injection system for cars and other vehicles in 1949.
During the 1950s, Bosch flourished as an automotive supplier to foreign manufacturers and was readmitted to the world market in 1952, the year during which The Robert Bosch Corp., as it is known today, was formed in New York City. The company also diversified into kitchen appliances, hydraulic equipment, and do-it-yourself power tools in 1952; washing machines in 1958; and dishwashers in 1964. After 20 years as CEO, Walz retired in 1962 and was succeeded by Hans Merkle. More so than his competitors at Siemens and Bendix, Merkle recognized that fuel economy and pollution controls would become key factors in the automotive world, and dedicated electronic product development to those areas. When new anti-pollution regulations were adopted in the U.S. in the late 1960s and early 1970s, Bosch was ready with fuel injection system that was not only more efficient than carburetors, but also helped engines pollute less and go farther on a gallon of gas—a perfect way for many automakers to navigate OPEC gas crisis of 1973 and higher gas prices since.
High Tech and Acquisitions
Better and higher-technology systems became the mantra of Bosch, as indicated by their acquisitions of shares in, for example, American Microsystems (25%), a manufacturer of integrated circuitry, and Borg-Warner (9.3%), which was already established in microcircuits. A plant in Virginia was purchased in 1974 to produce fuel injection systems for the U.S. market, a facility that was expanded three times to accommodate the critical fuel injection component market that grew out of the gas crisis.
Marcus Bierich, named CEO of Bosch in 1984, continued the company’s visionary approach and also guided it through competitive threats. Another visionary initiative took place: that of anti-lock braking systems (ABS). Demand for ABS increased, and Bosch met that demand. Diversifying yet again, Bosch expanded its sensing-at-the-wheel technologies to a new task: traction control. Today, virtually all cars are equipped with ABS, and many with traction control. Also, in the 1980s, the company blazed trails into such areas as in-car navigation systems and telecommunications. Beyond automotive, the company in 1980 also acquired The Stanley Works, a leading producer of hardware and tools, and formed Robert Bosch Power Tool Corp. In 1982, Bosch and Emerson Electric Co. formed S-B Power Tool Co. and, in 1989, the duo also formed Vermont American Corp. to produce power tools and accessories.
The 1990s brought both product expansion into air bags, diesel, and other technologies, and geographic expansion into Eastern Europe and Asia-Pacific, including South Korea and China. Also, while Bosch developed a reputation for high quality and precision, it also became known for high prices and inflexible client relations. Automakers began moving to less expensive competitors as well as making the parts themselves. In late ’91, Bosch cut costs and also reduced its workforce by 8,000 workers. Experiencing its first sales decline since 1967, the company struggled from 1989 to 1993 and cut another 13,000 workers from its ranks. Nonetheless, Bosch acquired Dremel rotary tools in 1993, and flexed its strengthening muscles in 1994 and 1995 with the purchase Allied Signal’s hydraulic and anti-lock braking systems business for $1.5 billion. In 1996, Skil was acquired.
Today, the company continues its automotive focus in large part, with its Automotive Technology division serving the gas and diesel systems, chassis and brakes, electrical and electronics, car multimedia, and steering systems markets.
Its Industrial Technology arm, Bosch Rexroth (acquired as Mannesmann Rexroth in 2001, is a leader in drive and control technology for industrial automation, mobile equipment, and commercial vehicle sectors. Bosch Packaging Technology, also part of their industrial business, plans, designs, manufactures and installs complete packaging lines for a variety of markets through the acquisition of the Swiss SIG Pack Group. The Consumer Goods and Building Technology segment continues Bosch’s leadership in sub-segments for Power Tools through its own design and acquisitions such as Skil and RotoZip, Themotechnology which includes heating products and water heaters, Household Appliances, and Security Systems.
Technology, quality, and diversification continue as strong elements of the company’s businesses today, consistently keeping the vision of founder Robert Bosch both clear and intact.