ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, May 5, 1996 TAG: 9605030081
SECTION: BUSINESS PAGE: 1 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
Hushed as a steaming hot tub, Jacuzzi Inc. has begun making whirlpool baths in Salem.
There was no ribbon-cutting for the new factory, no ceremonial rollout of the first unit. It's not even clear when in the past four months production began.
Jacuzzi, a private company, keeps its affairs tightly under wraps. In fact, the factory at 2050 Cook Drive - the company's first outside its home state of California - is marked only by a 2-by-9-foot sign noting the turn from Apperson Drive. Black adhesive letters on a mailbox mark the property entrance, which is hemmed by tall vegetation.
Pretty understated stuff for an international corporation with 2,200 employees and an omnipresent brand name that many confuse with the generic whirlpool itself.
The parent company of the Walnut Creek, Calif., corporation, however, isn't shy about revealing Jacuzzi's expansion plans, in which the Salem facility is scripted to play a key role.
Roy Jacuzzi, who is credited with inventing the whirlpool bathtub in 1968, wants to make an even bigger splash in the home fixture business, said Diana Burton, an investor relations officer at U.S. Industries Inc. of Iselin, N.J., Jacuzzi's parent.
He has already moved from tubs to making showers and he peddles a growing line of faucets. Don't look for that to be the end of it, though, Burton said.
"There's no reason ... he can't own the bathroom; and when he's done owning the bathroom, there's no reason he can't own the kitchen," Burton said. A full kitchen fixture line isn't out, but Burton foresees it in the future.
Last year, Jacuzzi's sales grew 8.4 percent to $283 million and profits grew 16.7 percent to $49 million, respectively, according to U.S. Industries.
To keep growing, the company needs the additional production and warehouse space offered by the Salem plant. Three factories were added in Southern California in 1994, bringing to seven the total there.
The start-up of the Salem operation is behind schedule, but the company has given no indication it can't catch up. Jacuzzi announced plans for its Salem operations in January 1995 and said production would begin last summer.
Instead, Jacuzzi had problems getting equipment, and its primary raw material - fiberglass for reinforcing its tubs - was in short supply nationally. That placed Jacuzzi's plans for manufacturing in Salem in some doubt. It appeared the facility might be scaled back to a warehouse.
However, some time after the first of the year, Jacuzzi began advertising for workers. This spring, the factory parking lot began to fill up with what appeared to be tubs or parts for its fixtures. Then last month, company spokeswoman Michelle Peterson confirmed that production was indeed under way, with 35 whirlpool baths being molded and finished each day.
The plant is hiring 75 employees, most for production jobs which have been advertised as paying $5 an hour. The Roanoke Valley Economic Development Partnership has said those jobs will pay as much as $8. The new workers will be in addition to the plant's 25 initial employees.
The company expects the production in Salem to reach 100 bathtubs and 25 spas per day by June 1 and, according to the original release, expects that to reach 200 units a day. Jacuzzi's hot-selling new showers are among the items ultimately to be made here.
The plant also will store a range of merchandise made in Salem and elsewhere for shipment to customers in the East, the Midwest and Latin America.
The cost of starting up the new factory was not disclosed, but state incentives were limited to training funds for the plant's employees. Under the training program, the state spent an average of $539 per worker last year, meaning Jacuzzi appears in line to receive up to $162,000 if it meets its projections of hiring 300 local workers. |n n| Jacuzzi is a household word to many around the world, as it has come to refer generically to any hot water-filled tub used for relaxation and therapy. The company claims it holds the only registered trademark word that is listed in both Webster's and the Oxford dictionaries. The public asks for it by name, dealers said.
``People go, `I want a Jacuzzi.' They don't necessarily go up and say, `Hey, I want a Kohler,''' said Rick Hope, purchasing agent at the Richmond warehouse center for Ferguson Enterprises Inc. Ferguson is a retailer and distributor of plumbing fixtures with operations in Roanoke. Kohler is a Wisconsin-based plumbing products manufacturer.
Jacuzzi is known best for its bathtubs and spas with whirlpool jets. Yet a product introduced in just 1990 has replaced spas as the second best-selling item - a fancy shower, which features multiple water jets, steam, padded seats and music. In addition to those three main products, the company makes a variety of more mundane plumbing goods such as faucets and pumps.
Expect to pay $1,000 to $6,000 for a Jacuzzi whirlpool bathtub, not including installation, which can cost another $1,000 for a basic wood deck and tile and related plumbing, according to Shellie Obenchain Crowder, showroom manager at CMC Supply Inc. in Roanoke, a plumbing fixtures wholesale distributor. Whirlpool spas cost $4,000 to $6,000.
These are multimillion-dollar industries. Manufacturers' sales of whirlpool, or "jetted," bathtubs, which like regular bathtubs are filled and drained with each use, totaled $296.4 million in 1995 in the U.S., according to estimates by the Census Bureau.
Manufacturers' sales of spas, which are self-contained, portable units that are kept full of chemically treated hot water, reached $341 million in that same period.
The size of the speciality shower market is unclear. Jack Kelly, an analyst at Goldman, Sachs & Co. in New York who follows Jacuzzi, said the showers contribute to Jacuzzi having "a very exciting product line."
"They are beginning to do more things in the bathroom than they did before. [And] the bathroom still seems to be an area of the home which people are spending more money on than they did the last few years," Kelly said.
The rise to prominence began a century ago in the family's ancestral homeland in Casarsa della Delizia, Italy.
According to published reports and limited information from the company, the first of 13 siblings began leaving in about 1905 for jobs picking fruit in Southern California. The first seven, including Roy Jacuzzi's grandfather, Joseph, and six great-uncles, got started in business in 1915 making laminated wood aircraft propellers for the military. The company built the first enclosed single wing plane, which was used as a passenger shuttle and to carry mail.
One of the Jacuzzi brothers, Giocondo, was killed in a crash of that plane while riding between Oakland, Calif., and San Francisco in the1920s. The Arkansas Gazette in Little Rock, where Jacuzzi still manufactures pumps, has reported that the crash prompted the remaining brothers to give up making aircraft.
Rachel Jacuzzi, the most inventive of the brothers, went on to develop pumps. They were initially used for irrigation and continue to be a mainstay for the company. Known as Jacuzzi Bros. of Little Rock, the pump division of Jacuzzi Inc. manufactures and markets pumps for household use, swimming pools and industry.
In the 1950s, however, Candido Jacuzzi, Roy's great-uncle, adapted a pump to give a water massage at his Berkeley, Calif., home to his son, Ken, who suffered from juvenile rheumatoid arthritis. From that sprang a niche business providing schools and hospitals with a hydrotherapy pump that sat inside a bathtub and stirred the water. This was the forerunner of the device known today as the Jacuzzi, but family members disagree about sharing credit.
Ken Jacuzzi, now 55 and living in Paradise Valley, Ariz., said his father, Candido, improved his in-tub pump by designing an underwater air jet that did the same thing. This saved space and reduced the risk of electric shock. He put the jets in swimming pools and an early version of the spa.
Only then did Roy Jacuzzi, who joined the company in 1968 as head researcher, design the first standard bathtub with the jets built in, Ken Jacuzzi said.
The whirlpool "was not [Roy Jacuzzi's] idea. Did he contribute? Definitely," he said.
As the story goes, Roy Jacuzzi peddled the "Roman Bath" at California county fairs for about $700. The jetted spa was placed on the market in 1970.
The product lines have come a long way. The Cortina whirlpool bath, a catalog states, "is the essence of comfort and elegance. From its lovely circular shape to its etched detailing, this spacious six-foot bath is perfectly suited for luxurious bathing for two."
The last of dozens of Jacuzzi family members affiliated with the company, Roy Jacuzzi is president and chief executive officer, overseeing worldwide operations.
Beth Doughty, who directs the Roanoke Valley Economic Development Partnership, described Jacuzzi this way: "He's a nice guy. Smart businessman. Easy to work with."
But Ken Jacuzzi said conflicts within the family prompted the decision to sell the company in 1979 to Kidde Inc., a diversified maker of industrial equipment and consumer recreational products. Kidde was bought in 1987 by Hanson Plc., a British conglomerate. Hanson last summer spun off Jacuzzi along with several other units to U.S. Industries, a newly formed holding company that manages what were Hanson's core U.S. businesses.
Kelly, the analyst who follows Jacuzzi for Goldman, Sachs, said Hanson supplied management and manufacturing expertise Jacuzzi needed to grow. Jacuzzi was earning $9 million in 1987 when Hanson took control, only about one-sixth of last year's income, said Burton of U.S. Industries. Now, Jacuzzi is the most profitable asset of the 19 companies that make up U.S. Industries, she said.
Today, Jacuzzi operates on three continents. An Italian factory is near the family's ancestral home. There are production facilities in Brazil and Chile.
When it came time to expand in the mid-Atlantic states, Hanson was already leasing the Cook Drive building Jacuzzi is in. It had hoped to create a satellite factory for its industrial machinery unit, Grove Worldwide Manlift Operations.
But Grove never made goods here, because of uncertainties in the construction industry, and vacated the building in 1993.
Now there are signs of life again at the address. The activity inside isn't for public scrutiny, but if you imagine a room of steaming tubs, you're probably not far off. A manufacturing protocol filed with state health officials indicates that tubs-in-testing are filled to check their water-tightness.
It's an inviting image, yes, but just because the company now operates in Salem, that doesn't mean local customers will find bargains at an outlet store. Peterson, the company spokeswoman, Jacuzzi doesn't allow any second quality whirlpools out of its plants.
LENGTH: Long : 194 lines ILLUSTRATION: PHOTO: Roger Hart. 1. The Jacuzzi Whirlpool Bath factory inby CNBSalem, as seen from the Veterans Affairs Medical Center, has come to
life in recent months. By summer, production will rise from 35
whirlpool bathtubs daily to 125 units and employment will rise from
25 to 100, the company said. 2. The company's "J-Dream" line
features sophisticated electronics that can convert it from a
standard to a hand-held shower, a steam bath or a hydromassage. All
either seated or standing. color. Graphic: Chart: Jacuzzi Inc.
color. KEYWORDS: JOBCHEK