Bad rep, good brandCorning made the glass envelope for Thomas Edison's first light bulb as well as the red, green, and yellow lenses used in the first traffic light. Yet it was Pyrex and Revere Ware cookware that made the company a household name. Corning's reputation may be changing again, however - the firm has recently shed the bulk of its housewares and consumer goods division in favor of more high-tech products, including television screens and specialized lenses. Corning currently markets its optical fiber worldwide; the company produces enough fiber per year to circle the earth 200 times. Founded in 1851, Corning has unfortunately gained notoriety in recent years as the parent company of Dow Corning (Corning's joint venture with Dow Chemical), the company responsible for the controversial silicon breast implants that made both Corning and Dow the target of high-profile lawsuits.
Big time
Feeling the aftershocks of silicon tremors and stagnant sales, Corning has trimmed its product line and research efforts to focus more on fiber optics, of which it is the world's leading supplier. As part of this focus, the company spun off its medical testing and drug research business in 1996. That move paid off. In 1996 and 1997, the company's net income increased 12 percent and 19 percent, respectively. The latest division to fall to the big-time, high-tech focus is Corning's big-name line of housewares. Borden, Inc., a diverse family of brand-name products, acquired all but 8 percent of Corning's housewares business in 1998. Under the agreement, the Corning Consumer Products Company functions as an independent operating company of Borden, and remains headquartered in Corning, NY.
No pain, no gain
Preceding Corning's sale of its hardy line of housewares, the company suffered quite a blow in the Asian crisis. By concentrating on fiber optics and attempting to flee the kitchen, Corning found itself in trouble when the Asian Flu hit. Roger Ackerman, Corning's chief executive officer, calmly held tight to the fiber optics division as the company's share price dropped by 60 percent. Much to the delight of Corning investors, Ackerman made the right move. By 1998 Corning was on the rebound, holding 38 percent of the world's fiber market. The company's research and development continues to lead the pack on the fiber optic highway, and with Internet expansion, Corning's profits are expected to explode.
Domestic and worldwide
While Corning conducted a reduction in workforce early in 1998, by the fourth quarter of that year staffing requirements reportedly exceeded those of 1997, reaching levels of approximately 20,000. Meanwhile, the company is expanding in other parts of the world. Corning's Taiwan operations have expanded, and the company began warehousing its products there in 1999. Corning also plans to build a $77 million factory in Pudong, China, which will produce emissions-control equipment. South African expansion is yet another focus of future growth. Back on the home front, Corning is likely to continue jockeying with Lucent Technologies to satisfy the worldwide hunger for optical fiber and cable.
Industry Leader
Corning's optical technology has thrust the company into the lead of this lucrative industry and it has quickly become the world's largest maker of optical fibers. Innovation and is the name of the game, and Corning has certainly played right along - at peak times, Corning averages one patent application a day.
To fuel its rapidly expanding business, Corning recently built a new plant in Scranton, PA, and has acquired or merged with four companies - Oak Industries, NetOptix, Siemens AG, and Samsung Electronics. The deals give Corning the necessary cabling capability and phototonic devices it needs to maintain its lofty position. In addition, it is spending billions to increase its manufacturing capabilities at existing plants, including $650 million on two plants in North Carolina. Corning is also making boatloads of money producing the glass for screens on LCD devices such as the immensely popular PDAs.
