- The William E. Powell Manufacturing Company


Powell headed for Kerrville to work with his brother Red at Powell Welding & Fab, but the business could not support both men.  He returned to Houston and went to work for a short time at Quietaire, run by Mr. George Plumely, Bill's uncle and an engineer who had left Houston Lighting & Power to open his own business.  Bill had lived with George and Bertie Plumely while attending Sam Houston High School, where he had graduated in 1937.

The Quietaire experience was the beginning of Bill Powell's dream.  He hired Ed Elsberry from Wilson Electric to work with him at Quietaire, one of the largest manufacturers of attic fans at the time.  George Plumely built a new one hundred by forty foot building across the street and rented it to Bill.  This building, at 524 North Hutchinson, became the William E. Powell Manufacturing Company.

Bill Powell and Ed Elsberry were employed by Quietaire.  They worked days at that business, and used the company's equipment after hours to cut and bend steel.  They dollied steel across the street to the new building to complete their fab work.  The Powell family-Bill, wife Margie, son Tom and daughter Charlotte - lived at 418 North Hutchinson, a one-and-a-half block walk to work for Bill.

Eventually Bill resigned from Quietaire and plowed his fifty-six dollar severance check into the new business.  He would later say that it was the best fifty-six dollars he ever spent.  Additional capital came from the sale of a lot Bill owned in Kerrville, raising two thousand dollars for two surplus Lincoln welders and a drill press bought on a GI Bill loan.

Harold Hodges became Bill's first full time employee, followed by Ed Elsberry a few weeks later.  Although the business actually started in January, 1947, Bill referred to the initial start date as April 15, 1947, since he and Red shared the date as their birthday, and since it was the tax reporting deadline.

The first orders for the business came from George Plumely's overflow and through influence the company had developed with local engineering firms.  The company's simple philosophy was, "There's nothing we can't do."

Bill Powell hired good men.  The products were primarily junction boxes, pull boxes, metal shelving, manhole covers, hammock frames and personal items like clothesline poles and cattle guards, many times using scrap pipe and metal.  Times were difficult, jobs were scarce, and the men even fashioned barbecue pits if that happened to be the only job available to them.  It was hard work, but hard work was all Bill Powell could offer his employees.

Sometimes, the men would work all night long.  And at seven o'clock the next morning, they would start the day all over again.  Powell's aim was survival.  Anything it took to get the project to a customer on time was an employee's sole job.  Powell built his foundation keeping the customer happy and getting the jobs out right and on time.


 - The Texas City Explosion


In 1947, the operation was a five-man company, working closely together to meet the needs of Houston's industrial firms, when a disaster rocked the Gulf Coast of Texas, a disaster that launched the shop into a major business.

On a warm April morning, the French ship, the SS Grandcamp, was docked in the port of Texas City, one of the nation's most important petrochemical complexes, when a fire was detected in the two thousand tons if ammonium nitrate fertilizer that had been loaded aboard the vessel.  Longshoremen and firefighters battled the blaze for sixty-two minutes before the SS Grandcamp exploded, causing widespread death and destruction.  The blast registered on a Denver seismograph, and the debris struck two light planes nearby, sending them plummeting into Galveston Bay.

By six o'clock that afternoon, another fire was discovered on the SS High Flyer, docked near the wreckage.  An hour after midnight, the High Flyer, loaded with a thousand tons of fertilizer and two thousand tons of sulfur, erupted with a tremendous roar,  The explosion was so great that buildings shook fifty miles away.

Thousands of people were injured.  More than five hundred died.  And hundreds of millions of dollars in property had been damaged or destroyed.  In Texas City, there was an immediate demand for electrical power equipment and repair.  Thousands were idled as factories were shut down for reconstruction.

Urgent calls were placed to companies like Powell all over the region.  Powell's five-man crew loaded up and headed down the Gulf Coast.  Their assignment was to repair and replace equipment that had been destroyed in Texas City area chemical and petroleum refineries.  Bus duct was a major product supplied from the factory on North Hutchinson, to fill much of the demand for replacement equipment and hired individuals left jobless by the explosion.

Average wages at the time were about 50 an hour for helper, $1.05 for journeymen and $1.25 for leadmen.  Sheet metal men could get $2.30 an hour.  The original crew included Earnest Gallemore, Alber Poorboy, Lynn Waldrup, Maurice Dial and Ray Bullock.  That first year, Powell did manage, to make a profit.

Mr. Powell formed Powell Fab shortly after this workload leveled out, moving his own office to a leased building of eight thousand square feet at 15 North Hutchinson.  This led to the formation of Powell Electrical Manufacturing Company at the same location.  He saw the growing market for switchboards and panelboards, and he began to surround himself with able, qualified engineers.  As Bill often told his associates to create a sense of urgency, "There comes a time when you have to stop reinventing the wheel and hitch it to a cart."

By the mid 1950's, the company had ninety employees.  Industrial companies throughout the region began to depend more and more on the expertise of Powell Electric.  The company had proven its mettle and its capabilities under the worst of times and most adverse of conditions.

The "can do" spirit of Powell was satisfying customers outside the region as well.  Powell had begun filling the need for custom-designed equipment in special applications for contracts outside Houston and even Texas.

Sales reached $1.4 million in 1956, after the company had landed major switchgear contracts for the Veterans Administration Hospital in Topeka, Kansas, and the Texas National Bank Building in Houston.  It was a time of steady, hands-on growth, and Powell had one major advantage over its larger competitors:  Powell could be counted on to provide fast, flexible and direct personal service.

During the first decade of its existence, Powell established its reputation for quality products and on-time delivery in expanded geographic markets.  During those early years, the company would purchase electrical components, then design and fabricate them into electrical switchgear and control equipment, selling the products primarily for use in commercial buildings through wholesale jobbers and distributors.

In 1956, the company found its North Hutchinson site had become too small for the growth being experienced, so it moved to a wooden beamed metal building that had originally been a mattress factory at 3619 Commerce Street.  Commerce Street was a gravel and oyster shell road next to the railroad tracks.  There was a lot of dust and the building would shake when the trains went by.

Such was the foundation for a company that, in time, would become the largest independent manufacturer of electrical switchgear and control equipment in the United States.

In 1956, Powell made a "best efforts" offering of 42,000 shares to the public with net proceeds to the company of $140,000.  The nearly three hundred shareholders were located primarily in the Houston area.


 - The Nike Marshall Islands Project Launched Powell Worldwide
 

Over the next few years, while sales were improving steadily, if not dramatically, Powell gradually put its own sales force in place while continuing to retain manufacturers' representative firms to market its products.  The company was gaining an even greater rapport with its customers and learning the most effective and efficient means to serve them.

A major turning point for Powell was the $217,000 switchgear project for the Nike-Zeus Missile Site in Kwajalein, Marshall Islands, in the far Pacific.  The project ultimately evolved into an order of more than four million dollars, helping to underscore the company's capabilities.  Powell built a strong reputation by completing this major success story beyond the limits  of Houston and established a solid foundation for entering the international marketplace.


- Government Investigated Major Electrical Manufacturers


Between 1960 and 1966, numerous major customers of heavy electrical equipment manufacturers alleged and proved that some twenty-five manufacturers conspired to fix prices and allocate markets for practically all equipment utilized in the generation, transmission and distribution of electricity in the United States.  This struggle among giants within the confines of the federal court system eventually resulted in almost two thousand separate cases.  The net result of the legal action included settlements and judgments totaling approximately a half billion dollars plus jail sentences for many involved.  Predatory pricing ended, and key components became competitively available.  Customers had more sources for quotations and products.  Price fixing was gradually eliminated, causing and open bidding process which stimulated investment in R & D.  The resulting new products, as well as innovations, paid off for manufacturers and customers worldwide.


- First OEM in the Industry to Manufacture Metal-Clad Switchgear Using ITE Breakers

Powell broke out of the pack of small electrical distribution systems packagers, known as OEM's or Original Equipment Manufacturers in the industry, with its first sale of a medium voltage metal-clad switchgear unit in 1961.  At the time, the ITE Company was manufacturing the air magnetic circuit breakers required for switchgear lineups, along with other major companies like General Electric, Westinghouse, Allis-Chalmers and McGraw-Edison.  Powell's initiative was to eventually lead an industry-wide trend that resulted in OEM's all over the nation building medium voltage switchgear using breakers from the "majors."

In 1964, Tom Powell, who had worked summer and holidays since the company was founded in 1947 and had gone to work at Westinghouse after his 1962 graduation from Texas A&M University, returned to work for his father's company.  He would lead an aggressive expansion phase for Powell, purchasing a 21-acre tract to begin construction of the 140,000 square-foot facility that would headquarter the company.  As Tom Powell would later tell a reporter, "This was no longer a job-shop or a tin-bender, but a quality supplier of electrical equipment."  In 1965, with new markets opening, Powell moved to its present location at 8550 Mosley Drive, near Hobby Airport, Houston's only major airport at the time.


- Union Carbide Project in Ponce, Puerto Rico, First Turn-Key  Project Started the Power Control Room Concept

In 1968, Union Carbide selected Powell Electrical to furnish switchgear and other apparatus at a major expansion of its multiprocess petrochemical manufacturing installation in Ponce, Puerto Rico.  The plant had originally been built in 1958, and Powell had supplied much of the electrical gear from the beginning.  The expansion was a huge project-at its peak the general contractor had more than fifty-five hundred workers on the jobsite.

Starting with an order for four weatherproof buildings to be constructed on the site by Powell, the order eventually totaled twenty-eight turn-key buildings worth more than seven million dollars.  This order was not only Powell's largest to date, but also its biggest risk.  The senior management of the company debated whether or not to quote the project and decided, in one of the most significant moments in the company's history, to "go for it."

Mickey DeHart, today Vice President of Sales and Marketing for Powell Electrical, was selected at age thirty to manage the project for Powell.  The buildings had been sold at twenty-one dollars per square foot, and the project team found it all but impossible to make money on the project.  The building contractor hired by Powell went broke.  DeHart relocated to Puerto Rico in 1969, living there a year and a half between 1970 and 1971, relieved by Tom Powell at the site.  For the first time Powell was charged by the customer with turn-key sourcing of all components for these substations, constructing the buildings on-site, assembling and wiring the myriad of electrical equipment specified and delivering a fully tested, ready to use power distribution system.  Site working condition and political turmoil were unfavorable, requiring that the final buildings be constructed in Houston at Powell's Mosley Drive site.

The key to success on the project turned out to be project management, for both Powell and the customer.  As a result, an entire industry was born and American companies in all continuous process industries had a new technique for plant construction that reduced lead times and saved start-up capital critically needed to maximize their ability to be competitive around the world.

By the late 1970's, Powell had become recognized for its unique product achievements with the PCR or Power Control Room, a completely enclosed, self-contained, portable structure that not only housed switchgear and motor control equipment, but also provided for the safety and comfort of the personnel needed to operated and maintain the equipment.

Powell Electrical's Power Control Rooms reduced the labor costs associated with on-site engineering and construction activities.  All of the fabricating, manufacturing and testing activities were performed by Powell at a single-site factory location where labor costs were generally lower.

As a self-contained, assembled unit, the environmentally-protected assembly of the Power Control Room eliminated outside climatic condition problems, protecting sophisticated electrical equipment from hazardous locations and contamination.  For example, on an oil drilling platform at sea or a drilling site in the desert, neither seawater nor sand could infiltrate the unit to damage the electrical equipment.

Later on, the larger Power Control Rooms were being built from structural steel plates at a forty-three-acre site on the Houston ship channel.  The waterfront location permitted direct barge loading to deep water vessels in the main channel, as well as loading onto trucks for overland delivery.  The lighter weight Power Control Rooms, made from formed panels, were built at Powell's main plant on Mosley Drive in Houston.

In 1968, the Powell Magnetics Division was formed to broaden the company's sphere from custom-made instrument panels to include its own line of instrumentation.  The creation  of the new division was formulated after many years of close association with a variety of industrial customers.  Powell realized that a specific need existed in the marketplace for systems that could be complementary to the company's basic products.  One of the earlier systems developed was an on-off control for process control equipment.


- Sales Emphasis Switched from Distributors to Users and Engineering Firms

Success breeds confidence.  With the success of the Power Control Room as the 1970's began, Powell decided to de-emphasize lower margin electrical commercial work sold through electrical distributors and contractors.  The company decided to focus instead on the demanding electric utility and industrial markets.  Continuous process industries such as petrochemical facilities and power plants required more sophisticated and customized power distribution systems, and these customers valued Powell's "can-do" approach to packaging.  Specific industry application requirements, coupled with the reluctance of major competitors to deviate from standard products, created a niche for Powell.  Meeting critical delivery dates and access to Powell's plant for customer inspection and checkout added to the list of Powell's strengths.  In addition, these types of industries could pay for the quality the company provided because reliability of electrical equipment was critical to the profitability of these processes.  Before the year 1976 ended, the company's customers were 100% industrial and direct user, gaining national and international recognition in the utility and petrochemical fields.  Added to a prestigious list of customers were Dow Chemical, Alcoa, Celanese Plastics, Gulf, Shell, Aramco, Union Carbide, Maxwell House, the City of Austin and the Tennessee Valley Authority.


- First Nationwide Sales Force


As a result of this strategic shift, Powell's products were often sold to engineering firms who designed and engineered power distribution and control systems, looking to Powell to customize and package the equipment.  And, by now, Powell was marketing its products through a nationwide sales force headquartered in Houston, as well as through independent manufacturers' representative firms.

Powell sales personnel became real source of added value for customers, with their ability to conceptualize solutions to complex electrical power supply problems.

By sourcing all the necessary equipment to Powell's manufacturing location, integrating the equipment into switchgear lineups or Power Control Rooms and providing assembly, test and customer inspection in one location, Powell delivered significant savings to customers while reducing project lead times and cutting field startup problems to a minimum.


- Merged with Process Systems to Form Powell Industries, Inc.


By 1977, Tom Powell was Executive Vice President and Director of Powell Industries as well as President of Powell Electrical Manufacturing Company.  Powell was bidding to supply electrical distribution equipment for a Saudi gas-oil separation plant for Aramco.  At the same time, Process Systems Company of Nevada, with its MICON brand having established a reputation for reliability and cost-effectiveness, was invited to bid on another portion of the plant to have its micro-processors control the compressors.  Process Systems was only a small firm, but it had developed one of the first microprocessor computers.

Because Powell had already moved into the international arena, selling, servicing and producing equipment for Aramco, the company was already involved in the Saudi project.  Aramco had an interest in using Process Systems' microprocessing system on the oil-gas separation installation, but Aramco needed the financial assurance of a larger company to do business.  A merger made sense to both companies.

The immediate end result of Powell joining forces with Process Systems was Aramco's $2.6 million order.  That was only the beginning.  In order to ensure the long-term viability of the Saudi project, Tom Powell committed to building a new wing of the Powell facility just to serve Aramco's needs.  It was, at the time, an unheard-of decision, but it helped secure the order.

Powell Industries, Inc. was formed in August 1977, as a result of the merger between Powell Electrical Manufacturing Company and Process Systems.  According to Bill Powell, the merger brought together a seasoned, financially-stable company that had excellent manufacturing facilities and production capabilities with one that had advanced, state-of-the-art, technological know-how related to the process control field.

Additionally, as 1977 came to an end, Powell was supplying electrical distribution equipment for the nuclear power industry.  Powell provided seismic-approved and thermally aged switchgear and motor controllers for the Washington Public Power Supply Systems.


- Began Development of PowlVac Vacuum Circuit Breakers


Powell had hit a plateau in growth in its closest regional markets.  It was also at the mercy of its major competitors for air-magnetic circuit breakers for medium voltage switchgear, the core product line for its Power Control Rooms.  The majors, beginning with General Electric, had introduced vacuum circuit breakers to replace air-magnetic designs and had not made them available to independent  manufacturers like Powell.  There was no projection available on when they might.  It looked like Powell could get squeezed out of medium voltage switchgear.

After many appeals by Powell management for vacuum circuit breakers from the majors, and due to significant price increases on air-magnetic designs which were soon to be discontinued, the company felt severely threatened.

The company was left no choice.  Either choose European or Asian breaker or develop its own.  There was no better time to pursue Powell's dream of developing and manufacturing its own components.  Powell had to meet the threat.

As President of PEMCO at the time, Tom Powell led the effort to develop the PowlVac breaker line.  Customers called on Powell to deliver solutions to a growing range of application challenges.  Investment was made possible due to the company's growth, along with the loyalty of these key customers that helped focus the R & D projects on specific needs.

He recalled, "As far as I was concerned, it was a matter of survival.  The technology for the industry was changing, and if you're ever going to advance, you need to be on the front end of that change, which meant moving to vacuum."

The organization rallied behind this bold move to the PowlVac family of vacuum circuit breakers.  Eventually the majors tried to discourage Powell, one even offering to buy and shelve the PowlVac design while they entered a long term agreement to sell their own breaker to Powell.  The R & D had gone far enough to be encouraging to Powell's team, and the offer was declined.

In the late 1970's, the company engineers began on the design.  Debate within the company was intense, with concerns centering around the impact such a program would have on key supplier relationships.  Tom Powell left the company as a result and formed Raintight Corporation and Diversified Power Systems, Inc., illustrating his own maverick tendencies.  Certainly the most significant turning point in the company's history was about to be reached.

At the beginning of the 1980's, in other parts of the company, Powell was making additional dramatic inroads into the world's energy-related markets.  Its products were being sold for installation in many areas of the globe, from the rugged cold North Slope of Alaska to the arid deserts of the Middle East and on the seas between.

For example, the C-2 Supervisory Control Systems of PSI were being utilized for feed and product distribution in one of the world's largest oil refineries located in the Gulf Coast area.  In South Korea, one of the world's largest fertilizer plants, producing nitrogen and phosphate-based fertilizers for distribution in the Far East, had employed PSI's C-3 Supervisory Control System with a solid state logic to control the movement of all solids from the incoming raw materials to a multitude of finished products.

PSI's microprocessor-based controller and Emergency Shutdown Systems were at work in Saudi Arabia, controlling and protecting all compressors in the most ambitious oil recovery system in the world.  Because of the complexity of the system, Powell's customers determined that microprocessor logic was the most feasible method of control.  PSI, in fact, was selected after careful evaluation of all the available controllers on the market.

Powell's switchgear and motor control centers had been installed in fossil and nuclear power plants, petrochemical facilities and various industrial complexes throughout the world.  And a three-hundred-ton, two-story, single-lift Power Control Room with heliport was in service in the Upper Arabian Gulf.

Powell's Offshore Division began in 1981, as a customer driven operation, initiated by Atlantic Richfields interests in Indonesia.  When plans for the offshore division were finalized, it became necessary for Powell to find a workable site tailored in size and specifications to the new division's own individual specific requirements.  A forty-two acre site was purchased on the Houston Ship Channel, and, in 1982, the first packaged module was shipped, establishing a packaging theme that would remain as one of the key factors for the company's continuing success.

This new operation gave the company a level of packaging capacity that none of its competitors possessed.  Powell thus became the only manufacturer in the nation delivering turn-key offshore switchgear, module design, management and construction, with Powell Offshore providing direct access to ocean shipping.


- Introduced PowlVac Breakers


In 1982 the PowlVac breaker became a reality.  This new breaker replaced the air magnetic breaker which had been used for decades and brought Powell in head-to-head competition with the "majors" of the industry.

The vacuum breaker concept permitted Powell to introduce simultaneously its own line of medium voltage switchgear, with designs available in two-high configuration.  This benefited customers who used PCR's because of the space saved and the resulting lower costs for manufacturing, shipment and installation.

Powell's two major strengths, switchgear technology using vacuum circuit breakers, and PCR's, complemented each other well.  Vacuum circuit breakers would later become the core product of Powell Electrical Manufacturing Company, helping it to become one of the world's largest PCR suppliers with the broadest and most complete line of ANSI medium voltage vacuum breakers available anywhere.

During 1983, Powell's primary market-the petrochemical and energy industries-was in a slump.  Powell shifted resources to develop more emphasis on sales outside regional markets and more than doubled international sales efforts.


- Acquired Raintight, Diversified Power, Delta-Unibus, Unibus and U.S. Turbine

Bill Powell overcame heart surgery in 1978 and took over for PEMCO again after Tom Powell left the company in 1980.  He tried to remain active and stayed in touch by phone when he could not be at his office.  To his employees, Bill Powell was a fighter, and they respected him.  Art Chamberlin was made president of PEMCO in 1982.

As one employee said, "The company wasn't a job.  This was his family.  The employees were his children, his associates, his confidantes, his partners.  He gave you that insight to believe in yourself, and, once you did, you could do things that amazed even yourself.  He gave you that ability to live up to your highest expectations."

In early 1984, the company purchases Unibus, Inc., and also acquired its wholly-owned subsidiary, Delta-Unibus Corp., significantly expanding Powell's core business line of power distribution products and adding to its customer base.  The acquisition was reorganized into two separate subsidiaries of Powell Industries, with Adam Janas appointed President of Delta and Hank Schmidt President of Unibus.  Also acquired that year was U.S. Turbine Corp.

Unibus had an excellent reputation as a manufacturer of low-and medium-voltage, custom-designed bar and cable bus systems for use in utilities and industry.  Delta-Unibus served a more specialized market, providing high-current isolated phase bus duct used in power generation applications.  U.S. Turbine was a supplier of small-and medium-size packaged turbine-generator sets for industrial and utility facilities.

Bill Powell had fought his way back from his 1978 heart attack.  In 1984, he was suffering with back pain, and finally, the answer came - terminal cancer.  Negotiations were almost complete to acquire Raintight Corporation and Diversified Power Systems, Inc., the companies Tom Powell had founded, when the diagnosis came.  In one of his final acts, Bill Powell signed the letters of intent to acquire these two companies.  He passed away on January 8, 1985.

Bill's guidance though thirty-seven years of growth, constantly teaching, encouraging and helping as he worked side by side with employees at all levels, gave the company a firm foundation on which to build.  He was, at the same time, an entrepreneur, administrator, engineer, technician, salesman and friend.  His ability to attract good people to work on his team, as well as his understanding of how important capable, dedicated employees were to the company's success, have been strengths that carry over to Powell Industries today.

With Tom Powell elected President, CEO and Chairman of Powell Industries, the year's five acquisitions, along with a national oil crisis and weak worldwide economy, were a lot to manage.

Diversified Power Systems designed and packaged electrical power distribution equipment, as well as direct current drive systems, primarily for the pipeline, petroleum exploration and production markets.  Raintight specialized in the design and manufacture of modular buildings and instrumentation cabinetry, offering advanced designs for those markets, in addition to living quarters and detention center markets.  These two companies were gradually incorporated into PEMCO.

The tough years of the mid-1980's had presented Powell Industries with new challenges rising out of a bleak economy.  These key acquisitions allowed Powell to provide new products for the markets it previously served, to penetrate new markets with a more fully developed product line and to make technological improvements to both new and existing products.

As the slump in petroleum-related industries continued and foreign demand declined, Powell Process Systems continued its domestic market penetrations with broader applications for MICON in the pharmaceutical, cement, steel and cogeneration industries.

Also, Powell Electrical had seen a tremendous surge in repeat business during the previous ten years from such major and international corporations as Union Carbide, Chevron, Exxon and Aramco.  Powell was becoming recognized within the hierarchy of these Fortune 500 companies for its quality, its technical expertise and its diversification.

The business environment had become more competitive.  A lot of the independents were gone:  sold or simply shut down.  Getting ahead and staying there had not been an easy task.  For Powell, it had been a successful endeavor.  The company was changing the way it did business, concentrating its marketing efforts on those industries in the midst of an expansion mode, primarily in oil and gas, as well as petrochemicals and heavy manufacturing.

Unibus watched its markets decline in 1985, but the division was generally able to maintain its market share by penetrating new markets, as well as holding or reducing prices while absorbing increased material and labor costs.  A year later, Unibus had increased sales and profitable operations in spite of a market that continued to be flat and prices that remained at depressed levels.  Before the decade ended, one of the company's primary business activities would be as a key supplier to major power distribution equipment manufacturers who did not include bus duct in their own scope of products.

An important and unexpected development in the market occurred for Delta-Unibus in 1986, when the only other major manufacturer of isolated phase bus duct in the United States exited the marketplace.  As a result, Delta-Unibus was able to successfully purchase certain assets of Westinghouse Electric Corporation's isolated phase bus division, as well as the firm's production backlog, the complete bus systems with the Westinghouse design and the rights to manufacture replacement parts.  The transaction greatly enhanced the Delta-Unibus production base load for the next several years, adding to the division's already strong technical capabilities.

U.S. Turbine initially sourced gas turbine-generator sets from General Motor's Allison Division and later added Cooper Rolls and Kawasaki.  The business also had, but later lost access to GE's LM2500 design.  Powell wanted U.S. Turbine to expand its turn-key project capabilities and sell more switchgear.  However, an expanding market for cogeneration projects, combined with an uncertain effect of tax legislation and generator price pressure in the marketplace, meant uncertain growth opportunities for this business.

Following three difficult years, the company returned to a strong financial position in 1988.  After its formation in 1974 as a one-man operation to assist with startup and solve field problems, Powell Apparatus Service Division contributed significantly to this turnaround with a focus on service and modernization or upgrading of existing systems.  Also, PASD had developed a line of replacement and retrofill medium voltage breakers that further expanded the horizon of opportunities for the PowlVac breaker technology.

The year 1989 saw the formation of Powell Offshore Division as a separate business unit.  The move included a manufacturing and office building at the Houston ship channel.  Since 1981, the organization had been handled as a second production site only.  After the first offshore platform had been installed in 1947, coinciding with the formation of Powell, the industry and the company had expanded simultaneously.  In 1990, the division landed a major offshore platform project requiring a three-story power supply module measuring 48 feet tall, 75 feet wide and 105 feet long.  Installed on a production platform operating at a world record depth of 2860 feet of water in the Gulf of Mexico, the 1000-ton module was finished ahead of schedule and shipped in September of 1992.

In 1991, Miles "Gus" Zeller joined the company as President of PEMCO.  As PEMCO and Powell Industries had grown, it had become time for Tom Powell to relinquish his PEMCO role to focus his time on his duties as CEO and Chairman.  Gus brought great enthusiasm and helped implement many needed improvements in the manufacturing processes.


- Powell-ESCO Acquired


In 1991, Powell acquired the assets of ESCO Company in Greenville, Texas, fifty miles northeast of Dallas.  ESCO had been a firm that designed and manufactured a range of products for electric utilities and industry, including gas and oil filled switches, vacuum switches and liquid-filled specialty medium voltage transformers.  Within two years, Powell-ESCO was generating sales from customers in fourteen countries, including Europe, the Middle East and Latin America.  The company's "built like a tank" reputation had started in 1946, as a small service shop.  After becoming part of Powell, the business acquired additional gas switch designs from Hevi-Duty.  Glenn Auer, now with Powell more than thirty years, moved to Greenville to become president of the new business after he was in charge of Powell Apparatus Service Division for many years.  The addition of Powell-ESCO enlarged Powell's core business portfolio and expanded its customer base.


- Traction Power Systems Division Formed


Traction Power Systems, Inc., was formed to develop business from mass transit rail projects, with John Frederick as President.  Typically, such projects are funded by government authorities to provide low-cost transportation and reduce environmental impact.  All over the world, cities have concluded that mass transit it the long-term answer to transportation problems.

The new company immediately formed a key licensing agreement for DC circuit breakers with Great Britain's Whipp & Bourned Company.  The firm was one of the world's oldest manufacturers of DC circuit breakers used in metropolitan rail systems.

The first two major orders received by Traction Power Systems Divisions come from the City of Los Angeles and DART, the Dallas Area Rapid Transit Authority.  In a period of just a few months, Powell built up a transit-related backlog of orders exceeding thirty million dollars, orders that would be shipped during the next three years.

Other projects would be developed for the Departments of Transportation in several states and cities.  Traction Power successfully pursued these opportunities and in one recent year installed new systems in six major cities around the nation - Baltimore, Chicago, Dallas, Los Angeles, New York and San Diego.

Traction Power substations consist of an incoming power supply through a PowlVac breaker, a transformer and rectifier section and DC feeder breakers supplying trains.  These elements are housed in a PCR specially designed for the application.  Products from several Powell divisions and subsidiaries are used in traction power substations.  The technology of such huge projects is a limiting factor, but Traction Power established Powell as a leader in this specialized market.


- Acquisition of Innovative Breaker Technologies
and Transdyn Controls

In 1993, Powell took a major step forward in vacuum circuit breaker R & D and production, acquiring a small group in Fremont, California, headed by Paolo Vianson and naming it Powell Innovative Breaker Technologies.  This acquisition included the rights to a patented two-link breaker mechanism.  Powell wanted to pursue 27kV and 38kV breaker development but was overloaded with other R & D projects.  During the year, a joint effort between Powell-IBT and Powell Electrical Manufacturing Company resulted in the design and certification of a very powerful vacuum circuit breaker rated at 38kV, with 40kA of fault current interruption capability.  The circuit breaker was tested successfully and met or exceeded all industry standards.  In addition, it became the most powerful metal-clad switchgear vacuum breaker manufactured in the United States and has played a key role in several major contracts in industrial utility, as well as transit, markets.

An opportunity to acquire Transdyn Controls, Inc., from its financially stressed owner occurred in 1993.  This gave Powell an opportunity to strengthen MICON and put the two companies into higher growth markets, as well as add Supervisory Control and Data Acquisition (SCADA) systems to industrial and transit markets.  Transdyn designed, programmed and installed complex SCADA systems and Distributed Control Systems (DCS) for environmental, transportation, industrial and municipal utility facilities throughout the nation.  Several of Powell's largest projects are Transdyn success stories, including major tunnel control prujects in Massachusetts, Colorado and Hawaii and water control systems in Florida and California.


- Introduced PowlVac-AR and PV System 38


The breaker developed by P-IBT and PEMCO during 1993 became part of Powell's new PV System 38.  The switchgear design had the only breaker on the market with a patented two-link mechanism, the most mechanically efficient in the industry.  The development of the PV System 38 breaker substantially improved Powell's competitive position in medium voltage power switching, placing Powell in a leadership role in the industry's drive to handle higher voltages in increasingly smaller spaces.

PEMCO, in 1994, became the first domestic manufacturer to produce arc resistant switchgear, introducing the PowlVac-AR, an innovation geared to enhancing operator safety.  PowlVac-AR reduces the chance for injury, equipment damage and process downtime if an internal switchgear fault occurs.

Soon after the introduction of the PowlVac-AR, one of Powell's largest customers placed a multi-million-dollar order for Power Control Rooms.  The customer, who placed worker safety as a very high priority, specified that arc resistant switchgear be installed in most of the PCR's, which happened to be some of the largest buildings ever supplied by Powell.  One single building shipped on a 19-axle truck measured 22 feet wide by 84 feet long and weighed more than 250,000 pounds, becoming one of the larges PCR shipments to date from Powell's site on Mosley Drive.

The Powell Apparatus Service Division, under the direction of Dennis Thonsgard, experienced another year of double-digit growth in 1994, as it expanded and continued to focus its attention on customer service and solution-based technology.  Through the years, the division had developed a national reputation for delivering dependable, quality products backed by competent, responsive service, as well as handling start-ups, customer training, routine maintenance testing and twenty-four hour troubleshooting if problems arose on electrical distribution systems.  Offices in Houston, Philadelphia and Phoenix allowed the division to deliver exceptional customer service.

During 1994, Delta-Unibus led by Adam Janas continued to demonstrate its ability to design and construct high-current projects.  Delta produced the highest rated bus duct system in the industry for a Georgia nuclear power plant.  Delta supplied an isolated phase bus duct system for the largest hydroelectric pumped storage power project in the world, located in South Carolina.  And on an international level, Delta received a large order for a Korean nuclear power plant, with one isophase bus unit being built and installed in each of the next three years.  It marked the fourth major project in Korea for Delta-Unibus.  At Unibus, Tom Burtnett became President when Hank Schmidt retired.

 

 
- PEMCO Achieves ISO 9001 Certification


During 1995, mining, oil, gas and the petrochemical industries - all markets served by Powell - were growing at dynamic rates.  And Powell sought opportunities for technical advances, as well as pursued opportunities overseas, spurring the company's leadership role in innovations.  With projects completed in more than eighty countries, Powell's worldwide reputation for quality and dependable performance had been well established.

Part of Powell's worldwide success had been the result of major quality program investments, leading to the company's certification to the ISO 9001 standard in 1995.  The certification of Powell's Mosley site by this leading authority again validated the confidence shown by Powell's customers as they returned for repeat orders.


- A Keystone Year


The chairman's 1996 annual report letter to shareholders called the period "A Keystone Year."  The difficult decision to sell U.S. Turbine was reached as the unit no longer fit the core business strategy of the company.  A buyer was found in Rolls Royce, plc.  A similar process was followed in reaching an equally difficult decision to sell PSI.

Also in 1996, the company saw several important milestones:

  • Powell Offshore saw revenues grow almost 50% in one year through wider market acceptance.
  • PASD recorded its third consecutive year of double-digit growth and opened an additional office in western Pennsylvania.
  • P-IBT introduced expanded ratings in both 27kV and 38kV ratings.
  • TPS became the first U.S. manufacturer to provide single an double-pole vacuum breakers for commuter rail projects.
  • Unibus achieved record revenues, earnings, orders and year-end backlog.
  • Delta-Unibus achieved record revenue and backlog with international orders comprising over 60% of total revenue.
  • Transdyn recorded its best year since becoming a part of Powell.
  • PowlVac switchgear manufacturing began in Saudi Arabia.


- Powell Completed Fifty Years with a Fourteen Million Dollar Expansion at PEMCO, Unibus and Delta-Unibus

Economic activity in the core industries Powell serves, the oil, gas, petrochemical and utility markets, continued to grow.  In addition, Powell continues to expand in the mining, pulp and paper, semiconductor and transit markets.  Also, as electric utility deregulation evolves, customers are expected to need new equipment provided by Powell's core businesses to remain competitive.  Powell products can be found all over the world, with international sales comprising one-third of operating revenues over the past three years and projects completed in more than seventy countries.

The company continues to succeed in penetrating new niche markets through strategic acquisitions and joint venture agreements, investing in research and development activities, as well as providing new products and services to meet customers' evolving needs.  Recent successes have included:

  • PEMCO concluded a blanket agreement expected to result in orders exceeding twenty million dollars for twenty Power Control Rooms (PCRs) equipped with electrical switchgear for a major petrochemical complex in the Middle East.
  • PEMCO reached agreement with an international consortium to furnish fifty-four PCR's worth sixteen million dollars of PCR's for the world's largest greenfield copper mine in Chile.
  • PEMCO acquired the Electrical Systems Group of ASC Industries, Inc., a power quality systems supplier, and formed the PEMCO North Canton Division.
  • Powell acquired L & I Research, Inc., of Watsonville, California, an R & D firm specializing in power electronics, and formed Powell Power Electronics Company, Inc.
  • TPS received a $5.7 million contract from Washington, D.C. Metropolitan Area Transit Authority for transit power substations that includes equipment from PEMCO, Powell-ESCO and Unibus.
  • TPS was selected by Raytheon for an $8.4 million substation contract to supply the first phase of the New Jersey Hudson-Bergen light-rail project, which is the first public  transit system to be completely designed, built and operated by private enterprise.
  • Delta-Unibus Corp. achieved a world record for testing self-cooled isolated phase bus for power plants, successfully testing 24kV designs at 25kA.  The product proved it can deliver more than one thousand MVA of continuous electrical power, enough to supply more than fifty thousand typical American homes.
  • Transdyn Controls, Inc., was awarded a $10.8 million contract to design, build and support a regional water and wastewater control system for Broward County, Florida.  This followed a similar award for $5.8 million from Sacramento, California.
  • The company is investing more than fourteen million dollars in expanding three facilities, with PEMCO and Unibus increasing floor space by more than 50% and Delta-Unibus completing its second 12% expansion in five years.  Near the end of the year, the PEMCO expansion was complete, and the Unibus relocation and Delta-Unibus expansion were in place.

 

 


Powell expects the deregulation of the electric utility industry will continue to create demand for its products in the future. International sales make up a significant portion of revenues, with completed projects in more than seventy countries.

Powell currently operates five wholly owned subsidiaries including Powell Electrical Manufacturing Company, Powell-ESCO Company, Unibus, Inc., Delta-Unibus Corp., and Transdyn, Inc. Today the company has facilities in five states. The corporate headquarters is located at the Mosley Drive facility in Houston and boasts more than 450,000 square feet of manufacturing and office space. The company is publicly traded on the NASDAQ exchange under the symbol POWL.

 


2002 by Powell Industries, Inc. - Houston, Texas. All rights reserved.