- USG Corporation
Infobox Company
company_name= USG Corporation
company_
company_type= Public (nyse|USG)
foundation= 1901
location=Chicago, Illinois , USA
key_people= William C. Foote, CEO
industry=Industrial goods
products= Building materials
revenue= $5.72 billion USD (2006)
operating_income= profit $1.13 billion USD (2006)
net_income= loss $1.58 billion (2006)
num_employees= 14,100
homepage= [http://www.usg.com/ www.usg.com]USG Corporation (nyse|USG), also known as United States
Gypsum Corporation, is aFortune 500 (rank 460 in 2008) [Fortune 500 Listing of Fortune 500 companies for 2008.] company that manufactures construction materials. USG Corporation was organized onJanuary 1 1985 as theholding company of itssubsidiaries . The corporate offices are located at 550 West Adams inChicago, Illinois .USG Corporation has six subsidiaries:
*United States Gypsum Company
*USG Interiors, Inc.
*L&W Supply Corporation
*CGC Inc.
*USG International
*USG Mexico S.A. de C.V.United States Gypsum Company - "a USG Corp. subsidiary"
United States Gypsum Company was incorporated on
December 27 ,1901 , and is a subsidiary of USG Corporation. The company was formed by consolidating 30 gypsum and plaster companies. This resulted in forming the first nationwide gypsum company in the United States.The company is the largest distributor of
wallboard in the United States and the largest manufacturer ofgypsum products in North America. The company produces the popular SHEETROCK gypsum wallboard as well as the FIBEROCK Brand Panels and SECUROCK Brand Roof Board. In 2004 the company had net sales of $2.474 billion and 6,772 employees. The company operates 21 gypsum board plants in the United States and has 14 gypsum mines and quarries in the United States, Canada and Mexico. [ [http://www.usg.com/about/factsheets/corpfactsheet_united.jsp About United States Gypsum Company] - Information about United States Gypsum Company.]To transport gypsum rock from various quarries, the company owns and operates a fleet of oceangoing
cargo ship s based inBermuda .Comedian
Bob Newhart worked as an accountant for the United States Gypsum Company in 1955 and 1956.USG is a major consumer of synthetic gypsum, a waste byproduct of
Flue gas desulfurization . The company operates sevenpaper mill s that produce high-grade wallboard paper from 100%recycled paper .In 1999, a record 25 USG plants exceeded 1,000,000 safe hours, and 39 plants worked 1,000 days without a lost workday. In the 75-year history of the safety sentinel program, USG has been awarded the
MSHA 's "Sentinels of Safety" award 15 times-more than any other company.In 2004, "Chicago" magazine named USG as one of the 25 best companies to work for in the Chicago metropolitan area.
In 2006, Fortune Magazine ranked USG #1 in the most admired companies in the building materials, glass industry with an overall score of 7.25.
Hostile Takeover Attempt
In October 1987,
Texas oilmanCyril Wagner, Jr. andJack Brown attempted a hostiletakeover of USG. Working as Desert Partners, L. P. Wagner and Brown bought 9.9% of USG's outstanding stock. USG decided to fight off this attempt by offering $42 per share ($37 in cash and $5 inpay in kind debenture ) plus a stub stock worth $7. Desert Partners was unable to match the offer and lost theproxy fight at a shareholder's meeting. To pay for the offer USG took apoison pill by borrowing $1.6 billion from 135 banks and issued $600 million in 13.25% subordinated debentures due in 2000 and $379 million in 16% pay-in-kind debentures due in 2008. To help pay for all the new debt USG sold off subsidiaries Castlegate; A. P. Green; Masonite; DAP and Wiss, Janney, Elstner & Associates. USG also sold off its construction metals plants, a paper-bag plant, and a lime plant. USG also sold off its headquarters building at 101 SouthWacker Drive in Chicago and its corporate jets and instituted large work-force reductions.Unfortunately the sell off and workforce reduction of 7% were not enough to allow USG to service the debt payments ($800,000 per day) in the economic downturn. The poison pill was too much for the corporation to survive.
Bankruptcy
In
March 17 ,1993 , USG filed a pre-packagedbankruptcy petition that included a 50-to-1 reversestock split . USG's stock dipped to 28 cents per share and the corporation emerged from bankruptcy 38 days later onMay 6 ,1993 . The corporation's debt was reduced by $1.4 billion and interest costs dropped from $320 million per year to $170 million per year. The plan worked and USG re-emerged to be a highly profitable corporation.In
July 25 ,2001 , USG once again declaredChapter 11 bankruptcy to manage the growingasbestos litigation costs. USG was the eighth company in the previous 18 months that had been forced to utilize Chapter 11 to resolve asbestos claims. In the previous two decades, 27 companies filed for protection under Chapter 11 because of asbestos litigation. Since 1994, U.S. Gypsum was named in more than 250,000 asbestos-related personal injury claims, and paid more than $450 million (before insurance) to manage and resolve asbestos-related litigation. USG received more than 22,000 new claims since the beginning 2001. USG’s asbestos personal injury costs (before insurance) rose from $30 million in 1997 to more than $160 million in 2000, and were expected to exceed $275 million in 2001.On
February 17 ,2006 USG announced a Joint Plan of Reorganization to emerge from Chapter 11. [http://www.usg.com/downloads/plan.pdf] Under the agreement, USG would create a trust to pay asbestospersonal injury claims. USG's bank lenders, bondholders and trade suppliers would be paid in full with interest. Stockholders would retain ownership of the company. To pay for the trust USG would use cash it had accumulated during the bankruptcy, new long-term debt, a tax rebate from the federal government, and an innovative rights offering. Existing USG stock owners would be issued rights to buy new USG stock at a set price of $40 per share. These rights could be exercised or sold. The $1.8 billion rights offering would be backstopped byBerkshire Hathaway Inc., meaning Berkshire Hathaway would buy all the new shares not bought. For the service, USG would pay Berkshire Hathaway a $67 million non-refundable fee.On
June 20 ,2006 USG announced their Plan of Reorganization was confirmed by two judges for theUnited States Bankruptcy Court and theUnited States District Court for the District of Delaware , allowing the company to complete the bankruptcy case and emerge from Chapter 11. USG announced a $900 million payment to the new trust was made that day and two subsequent payments totaling $3.05 billion would be made within the next 12 months if Congress failed to enact legislation establishing a national asbestos personal injury trust fund, such as the FAIR Act.Corporate Headquarters Building
USG moved its corporate headquarters to 125 S. Franklin in Chicago in 1992. We moved in March 2007 the Company HQ relocated to 550 West Adams street Chicago, ILL 60661. The building, known as the USG building, is part of the dual tower AT&T – USG complex. The
AT&T Corporate Center building was completed 1989. The building was designed by Adrian D. Smith, FAIA, RIBA Design Partner atSkidmore, Owings and Merrill and constructed by Morse Diesel within its $110 million construction budget. The USG building is convert|538|ft|m|abbr=on tall, houses 35 floors and convert|1100000|sqft|m2 of space. The USG Building includes convert|12000|sqft|m2 of retail, a 650 seat restaurant expansion and two levels of below grade parking for 160 cars. USG has its own entrance with a lobby and occupies the first 9 floors exclusively and parts of the 11th floor. The building uses Italian marble as cladding and also in the highly ornate interior. The interior also features gold leaf and satin-finish brown and American oak wood trim. Parts of the building lobbies were used in the filming of the 1994 movie "Ri¢hie Ri¢h".In 2005, USG announced it would not be renewing its lease at the 125 S Franklin building and that it would move to a new building to be constructed at 550 W. Adams developed by Fifield Companies. The base building architect is De Stefano + Partners and The Environments Group providing the interior space design and construction. USG entered a 15-year lease with plans to occupy the building in early 2007. The new building will be occupied 65% by USG and 10% by
Humana Inc. As an incentive for USG to remain in the downtown Chicago area, the city of Chicago created a redevelopment [http://egov.cityofchicago.org/city/webportal/portalContentItemAction.do?BV_SessionID=@@@@1888241764.1138035138@@@@&BV_EngineID=cccdaddgjmieildcefecelldffhdfgn.0&contentOID=536907521&contenTypeName=COC_EDITORIAL&topChannelName=HomePage agreement] that contributed $6.5 million to the construction of the new building. In turn, USG agreed to maintain at least 500 full-time equivalent jobs at all times for a period of ten years at the new corporate headquarters.Plaster City, California Facility
USG has a large gypsum
quarry and plant located convert|10|mi|km west ofEl Centro, California alongI-8 at a location known as Plaster City. The Plaster City location makes SHEETROCK brand gypsum panels. The quarry, located in the Fish Creek Mountains [ [http://www.mindat.org/loc.php?loc=77190&ob=4 mindat.org] - Information about the U.S. Gypsum mine in Fish Creek Mountains.] ofImperial County , is estimated to contain a deposit of 25 million tons of gypsum. [ [http://www.sdrm.org/roster/freight/hopprusg/ San Diego Railway Museum] - Discussion of U.S. Gypsum's railroad operations at Plaster City.]Active Narrow Gauge Railroad
USG operates an active
narrow gauge railway , the last industrial narrow gauge railway in the United States. The RailGauge|36 gauge line runs north for convert|20.5|mi|km from the plant at Plaster City (formerly known as "Maria") to the gypsum quarry. The line hauls gypsum rock from the quarry to the plant. Various sources show the total mileage of the track between 15 and convert|26|mi|km.The line was originally built by the Imperial Gypsum Company Railroad and was owned by the Imperial Valley Gypsum and Oil Corporation. The railroad built from the
San Diego & Arizona Eastern Railway at Plaster City to the quarry. Surveying commenced in April 1921, grading onOctober 3 1921 and construction was completed onSeptember 15 1922 . Commercial operation commenced onOctober 14 1922 . The total distance of the line was convert|19.63|mi|km. Just two years after completion of the line (1924), the track was sold to the Pacific Portland Cement Company.USG purchased the line from Pacific Portland Cement in 1946. In 1947 the first diesel engine was operated on the line.
The USG plant at Plaster City is also served by the
Union Pacific Railroad (UP) and theCarrizo Gorge Railway (CZRY) which is owned by theSan Diego & Arizona Eastern Railway (SDAE).References
Footnotes
Book references
*cite book | author=Fickewirth, Alvin A.| title=California railroads: an encyclopedia of cable car, common carrier, horsecar, industrial, interurban, logging, monorail, motor road, shortlines, streetcar, switching and terminal railroads in California (1851-1992)| publisher=San Marino, CA: Golden West Books| year=1992| editor=| id=ISBN 0-87095-106-8
*cite book | author=Robertson, Donald B.| title=Encyclopedia of Western Railroad History - Volume IV - California| publisher=Caldwell, ID: The Caxton Printers, Ltd. | year=1998| editor=| id=ISBN 0-87004-385-4
*cite book | author=Walker, Mike| title=Steam Powered Video's Comprehensive Railroad Atlas of North America - California and Nevada - Post Merger Ed.| publisher=Faversham, Kent, United Kingdom: Steam Powered Publishing| year=1997| editor=| id=ISBN 1-874745-08-0Web references
*cite web | title=USG| work=USG Corporation Official Website| url=http://www.usg.com/| accessmonthday=December 14 | accessyear=2005
*cite web | title=USG Hopper| work=San Diego Railway Museum| url=http://www.sdrm.org/roster/freight/hopprusg/| accessmonthday=December 14 | accessyear=2005
*cite web | title=SP Bulletin 1964 - They call it Plaster City| work=San Diego Railway Museum| url=http://www.sdrm.org/history/sda/spbulletin/1964.html| accessmonthday=December 14 | accessyear=2005
* [http://www.whitepassfan.net/usg/ US Gypsum Railroad Narrow Gauge Link]
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