USG Corporation

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USG Corporation , also known as United States Gypsum Corporation , is an American company that produces construction materials, especially drywall and compound combined. The company is the largest wallboard distributor in the United States and the largest manufacturer of gypsum products in North America. It is also a major consumer of synthetic gypsum, a by-product of flue gas desulfurization.

The company's offices are located at 550 West Adams Street in Chicago, Illinois.

Along with other construction products, the most significant brand of ultrasound is:

• SHEETROCK Brand gypsum board
• FIBEROCK Brand Panel
• SECUROCK Roof Board
• SHEETROCK Brand TUFF-HIDE Primer-Surfacer

In December 2013, Warren Buffett's Berkshire Hathaway became the largest shareholder in the company (holding approximately 30%) when converting the USG conversion records it acquired in 2008 into common stock.

On June 11, 2018, the USG signed an agreement to be purchased by Knauf based in Germany. Expected to close by 2019.

Video USG Corporation

Histori

In the 1890s, gypsum manufacturers perfected the method of reinforcing plaster by adding a retarder, which controls the setting time, thereby creating a reasonable competitor for traditional lime cast. Because gypsum is abundant, and available at relatively low prices, and because the manufacturing process is so simple, new companies are flooding and breaking markets, placing constant downward pressure on prices.

On December 27, 1901, 30 gypsum and plaster companies merged to form the United States Gypsum Company , which resulted in the creation of the first national gypsum company in the United States. The new company combines the operation of 37 mining and calcination plants producing agricultural plastering and construction.

In 1909, USG purchased the Sackett Plaster Board Company, the inventor of the Sackett Board, which is a panel made of many layers of plaster and paper. In 1917, a new manufacturing process produced a board with one layer of plaster and paper that could be incorporated along the wall with a relatively smooth surface. Originally called Adamant Panel Board, this product is known as SHEETROCK.

In the 1930s, company policy on the diffusion of manufacturing facilities, vertical integration and product diversification enabled it to operate profitably each year during the Great Depression. The World 1933 Chicago Fair features buildings built almost entirely from the SHEETROCK panel, leading to the brand's first major advertising campaign. Following the end of World War II, residential building markets expanded rapidly with returning GIs and residential channel projects emerging like Levittown.

The 1950s and 1960s saw an expansion into Mexico and other international markets.

The recession and its influence on the bottom line dominated the 1980s and led to corporate restructuring. On January 1, 1985, the USG Corporation was formed as a parent company - an upside merger in which the US Gypsum Company became one of only nine operating subsidiaries.

In the mid to late 1990s, the company expanded significantly in its manufacturing network, adding new high-speed wallboard production operations at Rainier, OR, Bridgeport, AL, and Aliquippa, PA. Other existing operations are substantially rebuilt or modernized, including a board manufacturing plant in East Chicago, Indiana.

In 2001, the company entered Chapter 11 bankruptcy proceedings to resolve legacy asbestos lawsuits. Asbestos is a small ingredient in some specialty products that have stopped being sold almost 40 years before, in the 1970s. Company operations remain healthy and profitable when in chapter 11. When bankruptcy is complete in 2006, all creditors are fully paid and USG shareholders maintain equity in the company. In the Wall Street Journal article dated February 15, 2006, Warren Buffett said, "This is the most successful managerial performance in bankruptcy I have ever seen." $ 3.95 billion of trust was created to address all future and potential asbestos lawsuits in the future, thus permanently resolving the issue of asbestos litigation.

Ultrasound is managed through the Great Recession, which hit the housing and commercial construction market in mid-2006, cutting costs and closing older and less efficient operations. William C. Foote, CEO of the company for nearly 20 years, retired in 2010, and 30-year USG veteran James S. Metcalf was elected Chairman, President and CEO. Metcalf implements a "Plan to Win" company that involves strengthening core manufacturing operations and distribution business L & amp; W, diversifies sources of revenue and profitability, and differentiates companies from competitors through innovative products and services. The company returned to profitability in the first quarter of 2013, posting a net profit of $ 2 million, followed by $ 26 million in net profit in the second quarter of 2013.

Maps USG Corporation

Company structure

USG Corporation has the following subsidiaries:

• United States Gypsum Company

• USG Interiors, LLC
• Otsego Paper, Inc

• Foreign Investment USG, Ltd

• CGC Inc.
• USG Latin America, LLC

• USG Holds de Mexico S.A. de C.V.

• USG Mexico S.A. de C.V.

Headquarters building

In 1992, the USG shifted its corporate headquarters from 101 South Wacker Drive to 125 S. Franklin Street in Chicago, a site it occupied until March 2007. Known as an ultrasound building, this structure is part of the dual tower of AT & amp; T Corporate Center, completed in 1989. The building was designed by Adrian D. Smith, FAIA, RIBA Design Partner at Skidmore, Owings & amp; Merrill and built by Morse Diesel in a construction budget of $ 110 million. The USG building is 538 ft (164 m) tall and houses 35 floors and 1,100,000 square feet (100,000 m ² ) space, including 12,000 square feet (1,100 m ² ) retail, 650-seat restaurant expansion, and two levels of parking below the level for 160 cars. The ultrasound has its own entrance with a lobby and occupies the first nine exclusive floors and parts of the 11th floor. Italian marble is used as cladding and also in very ornate interiors. The interior also features gold leaf and brown satin-finish and American oak trim. Parts of the lobby building were used in the 1994 filming, RiÃ, Â ¢ hie RiÃ, Â ¢ h .

In 2005, the USG announced that it would not renew the lease at 125 S. Franklin Street building and would instead move into a new building at 550 W. Adams developed by Fifield Companies. The basic building architect is De Stefano Partners, with The Environments Group which provides the design and construction of interior space. USG entered a 15-year lease, and took up the building in early 2007. The new building is occupied 65% by USG and 10% by Humana Inc. As an incentive for ultrasound to remain in downtown Chicago, the city of Chicago created a redevelopment agreement that contributed $ 6.5 million for the construction of a new building. In turn, the USG agrees to retain at least 500 equivalent full-time jobs at any time for ten years at the new corporate headquarters.

Manufacturing and mining facilities

Gypsum wallboard manufacturing facilities are reported to the SEC based on the extent to which the gypsum they use comes from synthetic or natural sources.

Plaster City, California facilities

Ultrasound has a large gypsum factory located 17 miles (27 km) west of El Centro, California, along the Interstate 8 highway, in Plaster City. The location of Plaster City makes the Sheetrock brand gypsum panel. The gypsum is mined from a mine located 20 miles (32 km) northward, in the Fish Creek Mountains in Imperial County. Mining is estimated to contain 25 million tons of gypsum deposits.

Ultrasound operates an active narrow gauge rail, the latest narrow gauge tract in the United States. The 3Ã, ft ( 914Ã,mm ) line goes to the north for 20.5 miles (33 km) from the factory in Plaster City (formerly known as Maria ) to the gypsum mine. This line carries the gypsum stone from the mine to the factory. Various sources indicate the total distance traveled between 15 and 26 miles (24.1 km and 41.8 km).

The line was originally built by the Imperial Gypsum Railway Company and is owned by Imperial Valley Gypsum and Oil Corporation. Trains built from San Diego & amp; Arizona Eastern Railway at Plaster City toward the mine. The survey began in April 1921, with an assessment on October 3, 1921 and construction completed on September 15, 1922. Commercial operations began on October 14, 1922. The total length of the line was 19.63 miles (31.59 km). Just two years after the completion of the lane (1924), the track was sold to the Pacific Portland Cement Company.

Ultrasound purchased the path from the Pacific Portland Cement Company in 1946. In 1947 the first diesel engine operated on the line.

The ultrasound plant in Plaster City is also served by Union Pacific Railroad (UP) and Pacific Imperial Railroad (CZRY) operating above San Diego & Arizona Eastern Railway (SDAE).

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Significant events

Antitrust case

Criminal

In 1973, six wallboard manufacturers (including ultrasound) were accused of infringing s. 1 of the Sherman Act during the period 1960-1973, through involvement in combinations and conspiracies in restraining interstate and commercial trade in the manufacture and sale of gypsum boards. In July 1975, after the jury committed to negotiating, it became clear that the jury was heading for a deadlock. The legal advisor moves for the cancellation of the trial, but the court judge rejects the request, although he states that, if no verdict is given at the end of the week, he will then reconsider mistial movements. The next morning, the jury returned a verdict of guilt to each of the defendants.

The Court of Appeal for the Third Circuit reversed the conviction, and the verdict was later affirmed by the United States Supreme Court on the grounds that:

1. The court judge's instructions to the jury are incorrect, as they emphasize the presumption of wrong intention, rather than concentrating on verifying the state of the defendant's mind through the evidence and conclusions drawn from him. In that case, the Sherman Act did not create a strict liability regime.
2. Good faith belief, rather than absolute certainty, that price concessions are offered to meet the low price offered by a competitor sufficient to demand a defense available under Ã,§ 2 (b) of Clayton Acting .
3. The ex-parte meeting between the court judge and the foreman's jury is incorrect, and the Court of Appeals will be justified in reversing the belief only because of the risk that the foreman believes the judge is insisting on a dispositive verdict.
4. The judge's allegations of involvement in the conspiracy, though perhaps not entirely clear, are sufficient, but his indictment of withdrawal from the conspiracy is false.

Civil

In 1940, the US Department of Justice filed a lawsuit against the USG and six other wallboard manufacturers, filling it with pricing under Ã,§Ã,§ 1 and 2 of the Sherman Act . This claim is derived from the 1929 Gypsum license agreement in the United States for a patented wallboard, which sets the price at which a wallboard should be sold. In 1950, the Supreme Court forced US Gypsum and six licensors - who produced all the wall boards sold to the East of the Rocky Mountains - to stop pricing, and the US Gypsum is prohibited from doing its patents.

During 1969-1974 at the United States District Court for the Northern District of California, a series of civilian antimonopoly cases were heard which became known as In Gipsum Anti-Puncture Cases . As a result, ultrasound (along with National Gypsum Company and Kaiser Gypsum Company) was found to have violated Ã, § 1 of the Sherman Act for conspiring to build and maintain the price of gypsum wallboard.

In December 2012, the USG (along with National Gypsum, Lafarge North America and Georgia-Pacific), was accused of class action for allegedly violating federal antitrust laws, through raising the price of drywall products by 35 percent, and stopping the old practice of letting customers lock in prices during the construction project. Ultrasound states that it does not participate, or engages in, unlawful conduct.

Forced takeover attempt

In November 1986, Belzberg brothers from Canada sought to take over the USG secretly. Ultrasound immediately instituted a plan to buy back 20 percent of common stock in an attempt to fend off a takeover. In December 1986, however, the USG had purchased shares of Samuel, William, and Hyman Belzberg at 4.9 percent, for $ 139.6 million.

In October 1987, the Texas oil company, Cyril Wagner, Jr. and Jack E. Brown, through Desert Partners, LP, attempted to take over the USG in secret, purchasing 9.88% of extraordinary USG shares. The ultrasound decided to fight this effort by offering $ 42 per share ($ 37 in cash and $ 5 in form of loan payments) plus a $ 7 stub stock. Desert Partners could not match the offer and lost the proxy fight at the shareholder meeting. To pay for the offer, the USG took the poison pill by borrowing 1.6 billion dollars from 135 banks, and spent $ 600 million in 13.25% of the subordinated bonds due in 2000 and $ 260 million in the form of a 16% in 2008. To help pay for all new debts, USG is sold:

• a subsidiary of Castlegate, A. P. Green, Masonite, DAP, and Wiss, Janney, Elstner Associates, Inc.
• metal construction factory, paper bag factory, and lime plant
• building his headquarters at 101 South Wacker Drive in Chicago and his corporate jet,

and institutionalize a large workforce reduction.

A 7% reduction in sales and labor is not enough to allow the ultrasound to service debt payments ($ 800,000 per day) in the economic downturn. Toxic pills are too much for the company to survive.

Bankruptcy

On March 17, 1993, the USG filed a pre-packaged bankruptcy petition that included a 50-to-1 reverse stock split. USG stocks slumped to 28 cents per share and the company emerged from bankruptcy 38 days later on May 6, 1993. Corporate debt was reduced by $ 1.4 billion and interest costs fell from $ 320 million per year to $ 170 million per year. The plan worked and the ultrasound reappeared into a profitable company.

Ultrasound once again declared bankruptcy on June 25, 2001 under Chapter 11 to manage the rising costs of asbestos litigation. Ultrasound is the eighth company in an 18 month period forced to utilize Chapter 11 to resolve asbestos claims. In the previous two decades, 27 companies filed for protection under Chapter 11 due to asbestos litigation. Since 1994, US Gypsum has been mentioned in more than 250,000 personal asbestos-related personal injury claims, and paid more than $ 450 million (before insurance) to manage and resolve asbestos-related litigation. Ultrasound received over 22,000 new claims since early 2001. The cost of personal ultrasound asbestos injuries (before insurance) rose from $ 30 million in 1997 to over $ 160 million in 2000, and is expected to exceed $ 275 million in 2001.

On February 17, 2006 the USG announced a Joint Reorganization Plan to emerge from bankruptcy. Under the agreement, ultrasound will create the trust to pay for asbestos personal injury claims. The bank lenders, bondholders, and suppliers of ultrasound trade will be paid in full with interest. Shareholders will retain ownership of the company. To pay for the trust, the ultrasound will use the cash that has accumulated during bankruptcy, new long-term debt, federal government tax breaks, and innovative rights offerings. Existing USG owners will be given the right to purchase new USG shares at a set price of $ 40 per share. These rights may be exercised or sold. The $ 1.8 billion rights offer will be revoked by Berkshire Hathaway Inc., which means Berkshire Hathaway will buy all new shares not purchased. For this service, Ultrasound will pay Berkshire Hathaway a non-refundable fee of $ 67 million.

Source of the article : Wikipedia