ESCO Corporation

History

ESCO was founded in 1913 by Oregon businessman Charles (C.F.) Swigert as a local source of steel castings. The Electric Steel Foundry Company was founded on property once occupied by the 1905 Lewis and Clark Centennial Exposition. The foundry used an unusual modern furnace that was fired by electricity rather than coke, making it the first of its kind in the western United States.

During its first 30 years, ESCO was mainly a regional supplier of cast steel alloy products for the logging, construction, and pulp and paper industry throughout the Pacific Northwest. In the 1920s, the company expanded production to include cast steel alloy products like the Bardon choker hook, widely used in forestry. Further growth was sparked by the use of Hadfield manganese steel and the production of dragline excavator buckets. The ESCO trademark was first used in 1926 and eventually became the company’s new name.

ESCO survived the Great Depression primarily as a jobbing foundry, making castings for sawmills, pulp and paper mills. In 1932, ESCO opened its first stainless steel industrial service center. During the 1940s, ESCO added new products to meet demand for supply valves, pump bodies, anchor chains and other components for warships and tanks. In 1946, ESCO developed the two piece tooth tooth system and, in 1948, the company entered the cable excavator bucket market.

Due to the growing mining and construction markets after the war, ESCO launched new products and opened additional plants, sales offices, subsidiaries and licensees, including a midwest distribution facility in Danville, Illinois and a foundry in British Columbia. The company also adopted new manufacturing, inspection and metallurgical methods.

During the 1960s and 1970s, ESCO expanded the manufacture of dragline and shovel dipper buckets and teeth. The company also launched a two-piece Conical tooth system and began using the argon oxygen decarburization (AOD) and vacuum molding processes. During the 1970s, ESCO opened an automated foundry in Newton, Mississippi and a second Canadian foundry in Ontario.

During the early 1980s, ESCO launched its Helilok pin and lock system and also acquired Gray-Syracuse and Concorde Castings—investment casting facilities serving the aerospace and power generation industries.

In 1983 ESCO bought Hyster Company, and then sold it in 1989 to NACCO Industries.

During the 1990s, ESCO expanded operations in the United States, the United Kingdom and Canada and entered a joint venture to manufacture products in China. The company also acquired Heflin Steel, producing wear liners and armor plate. ESCO also introduced the Super V tooth system.

Additional acquisitions like Quality Steel are targeted to serve the oil sands market. ESCO has also added aerospace and power generation facilities in Belgium and Slovakia and built new facilities in Mexico and Xuzhou, China. In 2008, ESCO introduced the SV2 tooth system, the Whisler Plus hammerless locking system, and the Ultralok hammerless tooth system.

In 2006 and 2008, ESCO was named among Oregon's most admired manufacturing companies, according to a Portland Business Journal survey of more than 2,000 Oregon CEOs. The company announced plans for an initial public offering in May 2011 that could raise as much as $175 million. The company canceled plans for an IPO in May 2013.

On December 28, 2012 Esco Corporation sold Turbine Technologies Group (Esco-TTG) to Consolidated Precision Products (CPP). Sale consisted of Esco TT Belgium, Esco TT Cleveland, Esco TT Mexico, Esco TT Syracuse, Slovakia Plant, Esco Tempe Machining Facility and NY’s Oriscany Steel Treaters. CPP is a portfolio company of Warburg Pincus.

ESCO announced the acquisition of Texas-based Ulterra Drilling Technologies L.P. in August 2012 in a deal estimated at $325 million. In 2014, ESCO acquired another Texas-based company, Stabiltec Downhole Tools, LLC., further adding to the company's oil and gas portfolio.

Plant closures and violation of U.S. trade sanction with Cuba

Commencing in 2013, ESCO has closed multiple manufacturing and service facilities in recent years, citing a protracted downturn and declining customer demand for their products. In January 2013, ESCO closed the Northgate, Australia foundry they purchased in 2010. In September, 2014 ESCO closed another foundry located in Guisborough, England. In February 2015, ESCO announced the closure of a large foundry in Nisku, Canada. ESCO laid of an estimated 25% of their manufacturing work force at their Port Hope, Canada facility in 2014 and made further cuts in 2015. ESCO announced the closure of another foundry in Dunedin, New Zealand in September, 2015. In November 2015, ESCO announced that they would be eliminating 247 employees when closing the main production plant that adjoins the North American headquarters.

In 2014, the Wall Street Journal reported that ESCO Corporation agreed to pay a $2.1 Million fine for violating U.S. sanctions imposed on Cuba. In the official penalty notice, the U.S. Treasury Department concluded that ESCO acted with "reckless disregard“ and "caused significant harm” to the U.S. sanctions program on Cuba by conducting large-volume and high-value transactions in products made from Cuban-origin nickel, “which were ultimately sourced” from people on the U.S. blacklist.

Products

Ground engaging tools are the expendable replacement parts of costly mining, construction, dredging, crushing, conveying, recycling equipment such as excavators, scrapers, drag lines, shovels, dippers, graders, dozers, loaders, haulers, dredging cutter heads, backhoes and skid steers. GET protects expensive equipment from the wear and tear common in high-impact or high-abrasion environments (from hard rock mining to dredging and oil sands extraction). GET includes such wear parts as tooth systems, buckets, blades, end bits, couplers, thumbs, ripper systems, lip systems, dozer packages, liner packages, shrouds, chain, chain sprockets, traction wheels, and shredder hammer components.

ESCO is a manufacturer of products for

Pollution

In November 2011 ESCO and Portland neighborhood representatives signed a Good Neighbor Agreement, which includes an implementation schedule for 17 emission reduction projects over five years. As of April 2014, 12 of 16 projects are completed, and one ongoing project with no completion date. Several of the projects are related to improving or adding control devices to capture particulate matter and metal emissions. It also includes projects related to chemical substitution to reduce organic compound emissions, and projects requiring additional or modified procedures or operations to improve emission capture.

"Crunching pollution numbers available on the Environmental Protection Agency (EPA) website, group member Bob Holmstrom found that the ESCO steel plant five blocks from Chapman Elementary had doubled its emissions of metals into the air from 2002 to 2007." "Though it strives to be the greenest city in America, an exhaustive USA Today study found that six of Portland's schools were in the worst percentile nationwide for air toxins. That puts Portland's school air quality on par with that of Cleveland, Ohio."

"Industrial air pollution in Northwest Portland is significantly worse than in other parts of the city, and ESCO Corporation is the main reason why. That conclusion can be drawn from an eight-month study by USA Today applying U.S. Environmental Protection Agency data and modeling to public and private school locations across the country. For each of the seven Northwest schools, the No. 1 source of pollution was ESCO, which has a steel foundry near Northwest Vaughn Street on 25th Avenue and another off Northwest Yeon Avenue. The primary chemicals emitted by these foundries were ..."

"... a December 2008 USA Today story, The Smokestack Effect: Toxic Air and America’s Schools, that ranked the air around Chapman and other Northwest Portland schools among the two percent most polluted in the nation. In essence, it said school children are exposed to some of America’s most unhealthy air, largely due to ESCO’s toxic fumes."

"Northwest Portland activists raised the issue of manganese pollution from ESCO foundries near Chapman Elementary after a USA Today report last December that ranked Chapman among U.S. schools most at risk from industrial pollution."