A decade since buyout, Goulds retains key role

Andrea Deckert//July 20, 2007//

Listen to this article

A decade after its merger with ITT Corp., the former Goulds Pumps Inc. continues to churn out new products, adding to the billion-dollar diversified manufacturer’s bottom line.
ITT’s fluid-technology segment, which includes the Goulds brand, has more than doubled its revenues since Goulds came on board. Annual sales totaled $3.1 billion in 2006, up from some $1.8 billion in 1997.
The integration of an $800 million, independent business with a large, multi-industry company presented many challenges and opportunities, said Ken Napolitano, president of ITT Industrial Process.
“On the people side, change is scary, in part because it introduces uncertainty,” Napolitano said. “Goulds was an independent company for 150 years, so this was a big change.”
ITT acquired Goulds in May 1997 in a $37-a-share friendly takeover, melding Goulds into its own fluid-technology group. That October, the firm moved Goulds’ corporate headquarters from Fairport-where it had been for three years-back to its original location in Seneca Falls.
Local officials are hoping Seneca County is where the company stays. Peter Same, Seneca Falls town supervisor and a former Goulds employee, said ITT/Goulds is a big part of the community.
“It is a huge factor for us,” said Same, noting that the company is Seneca County’s largest private-sector employer. “ITT/Goulds is integral to the local economy.”
Same said ITT has made improvements to its Seneca Falls site, including integrating some of its shared services there, which has brought in a more skilled work force. The firm made a five-year commitment to remain in Seneca Falls some three years ago and said it would re-evaluate the situation when that time is up.
To help keep ITT/Goulds there, town and village officials have joined forces to create a local development corporation and are hiring an economic developer, among whose first priorities is traveling to White Plains and meeting with ITT brass to see what local officials can do to keep operations in tact.
“The business is booming right now and we hope that will continue here,” Same said.
Over the decade since the merger, Goulds has been successfully integrated into ITT, management said. The former Goulds consisted of two divisions-industrial and water-and became independent centers under ITT Fluid Technology, which makes up roughly 39 percent of ITT’s business.
ITT’s Industrial Process headquarters is in Seneca Falls and provides pumps, parts, valves, monitoring, controls and aftermarket service through a global manufacturing, sales and distribution network. The business employs 2,200 workers, staffing 16 plants, 15 service centers and 30 sales offices and doing business in 125 countries worldwide.
White Plains-based ITT now employs more than 3,000 people in Western New York at several different operations: Industrial Process, Residential & Commercial Water, Financial Resource Center, IT Networking and the Rochester-based Space Systems Division.
ITT’s employment in the region has remained relatively steady over the past 10 years, despite its global expansion efforts. Being well-positioned and diverse across many markets helped the company fare much better than its competition through the 2000-2003 industrial recession, Napolitano said.
“We managed our resources to business activity and realized our inefficiencies through lean manufacturing and Six Sigma initiatives,” he said.
The downturn did affect employment numbers, but management declined to say by how much. Napolitano said staffing numbers rebounded as the company climbed out of the recession and introduced new products and services, resulting in sales growth up 50 percent from a decade ago.
ITT also decided to invest in centralized accounting and an IT network hub in Seneca Falls, further boosting employment.
Management declined to give annual sales for the Goulds brand, but with the acquisition of the Seneca Falls firm, ITT’s fluid-technology business increased 34.9 percent in 1997 to $1.8 billion, up from $1.3 billion the previous year. Operating income, excluding special charges, was $156.7 million, a 38.4 percent increase over 1996.
ITT brass at the time of the acquisition said it would create the world’s largest pump producer.
The fit between Goulds and ITT was expected to be a good one, officials said at the time. On the one hand, Goulds was a leading producer of pumps for the industrial sector, while ITT was a world leader in submersible pumps for municipal water treatment systems.
Napolitano said there has been a good cultural fit between Goulds and ITT.
“The alignment of values around employees, business excellence, customer value creation and community served the transaction well,” he said.
From a process standpoint, the firm has focused on rationalizing product lines, selling channels and manufacturing sites.
“Ultimately, we executed those initiatives very successfully, on time and on budget, and today we are a stronger and more efficient company as a result,” he said.
Nabil Nasr, director of the Center for Integrated Manufacturing Studies at Rochester Institute of Technology, said his center has worked with Goulds on a number of projects over the years, including lean manufacturing techniques and technical projects. He said Goulds continues to be an asset to ITT, as does its local skilled work force.
Following a strategy to manufacture close to the markets it serves, Goulds has expanded globally into markets with new plants in China, India and the Middle East since the acquisition. They are areas that are experiencing tremendous growth as they develop and industrialize, Napolitano said.
“To compete in this global landscape, we must make and design products that meet the needs of these segments,” Napolitano said.
In North America, where industrial growth is slower due to the mature infrastructure, the firm is going beyond pumps to develop new technologies and services, focused on customers’ requirements for better product reliability and lower operational cost.
Despite the slower growth domestically, ITT’s fluid-technology group continues to expand in the region. In June, ITT announced it would acquire Buffalo-based International Motion Control Inc., a developer of motion control products, for $395 million.
New product development continues to be a priority.
Roughly six years ago, Goulds introduced PumpSmart, a motion control system that lowers customer energy costs by up to 70 percent. The product has experienced tremendous growth since its introduction, Napolitano said, noting that pumps consume 20 percent of all electricity in the United States.
More recently, Goulds introduced Pro-Smart, a predictive condition monitoring system that targets lower equipment life cycle costs.
[email protected] / 585-546-8303