History
The company was founded in 1826 as a partnership between members of the Pilkington and Greenall families, based in St Helens, Lancashire, England.[1] The venture used the trading name of St Helens Crown Glass Company.[2] The company grew to become the biggest employer in St Helens. The distinctive blue-glass head office tower block on Alexandra Business Park, off Prescot Road, originally used as the firm's world headquarters, and completed in 1964, still dominates the town's skyline.[3]
Following the departure from the partnership of the last Greenall in 1845, the firm was renamed as Pilkington Brothers.[4] During 1894, the business was incorporated under the Companies Act 1862 as Pilkington Brothers Limited.[5] In 1903, it became the sole British manufacturer of plate glass as well as the dominant producer of sheet glass.[2]
Throughout the first half of the twentieth century, the company struck a series of market agreements with various domestic and European glass manufacturers of varying effectiveness.[2] European competitors, particularly those based in Belgium, had applied considerable competitive pressure to Britain's glass making industry; Pilkington was less susceptible due to a strong focus on exports and international developments throughout the British Empire and South America.[2][6] The company also invested heavily into its manufacturing capabilities, such as a new plate glass works outside Doncaster in 1922, and introduced new production techniques.[2]
After the First World War, Pilkington was one of only two large glass manufacturers remaining in Britain, the other being Chance Brothers, which mostly produced cast glass.[2] The two companies formed various agreements during the interwar period to share the domestic market and to not undercut each other; furthermore, Pilkington agreed to purchase any shares in the firm that Chance's owners wished to sell, thus it gradually built up a sizable stake in the firm. In 1951, Chance became wholly owned by Pilkington.[2]
Pilkington found itself in a relatively strong position in the aftermath of the Second World War, having exclusively fulfilled Britain's wartime requirements and even managing to expand its export activities.[2] While there was no reintroduction of the pre-war quota arrangements and its historic undertakings with individual merchants were abandoned during 1950, the company still entered an export agreement with its competitors in the European mainland. Further reforms to its business practices were made in response to the enactment of the Restrictive Trade Practices Act 1956.[2]
Between 1953 and 1957, the employees Alastair Pilkington (no relation) and Kenneth Bickerstaff invented the float glass process, a revolutionary method of high-quality flat glass production by floating molten glass over a bath of molten tin, avoiding the costly need to grind and polish plate glass to make it clear.[2] Pilkington allowed the float process to be used under licence by numerous manufacturers around the world. Amongst other benefits, these licensing arrangements often helped the company to further its interests, including the expansion of its presence in the European market and even gaining stakes in other manufacturers.[2]
During the 1960s and 1970s, Pilkington used the flow of float royalty payments to finance its investments in float glass plants across several countries, including Argentina, Australia, Canada and Sweden, and also to acquire major existing flat and safety glass producers and plants in the United States (Libbey Owens Ford), Germany and France. Pilkington, with its subsidiary Triplex Safety Glass, in which it gradually acquired a controlling interest, also became a major world supplier of toughened and laminated safety glass to the automotive, aerospace and building industries.[2]
A Monopolies Commission report in 1967, concluded that Pilkington and Triplex operations were efficient and entrepreneurial and, despite their high share of the UK glass trade, operated in a manner suited to consumers' best interests.[2] At the time, the majority of the company's shareholding was largely in the hands of various descendants of the original owners or employee trusts.[2] In 1970, Pilkington was floated as a public company on the London Stock Exchange.[7]
A rank-and-file strike during 1970, sparked off by an error in wage packets, brought 8,000 workers out for nearly two months. The General and Municipal Workers Union and Trades Union Congress leadership failed to provide any support, as they were too closely bound to management and government circles, with the result that strike leaders were blacklisted. Anti-union legislation was introduced by central government. These events were recreated in Ken Loach's film The Rank and File, although the BBC insisted on a change in the name and location of the company, so that the film is set at a fictitious "Wilkinsons" factory in the Midlands.[8]
In late 1985, Pilkington was the subject of a hostile takeover bid from BTR Industries, a large British-based conglomerate group, which valued the company at $1.64 billion.[9] Pilington's management rejected the offer and fought a successful defensive campaign in which various politicians took sides in the matter, thus BTR was compelled to withdraw its offer in February 1987.[10][11][12]
Litigation
Pilkington aggressively protected its patents and trade secrets through a network of licensing agreements with glass manufacturers around the world. The modern "float" technique (pouring the molten glass on a layer of very pure molten tin) became commercially widespread when Alastair Pilkington developed a practical version, patented in the late 1950s and early 1960s. As Pilkington plc owned all but one of the manufacturing plants around the world employing the float process, Pilkington had a monopoly.
Although the patents had expired by the early 1980s, Pilkington had licensed their use, and required the licensees to keep the details of the float glass process secret. Guardian Industries had tried to challenge Pilkington's dominance but had made a secret agreement to prevent new entrants into the market, with Guardian taking the lead to enable Pilkington, a British company, to reduce its exposure to United States antitrust law.[13]
In May 1994, the United States Department of Justice filed suit on the grounds that Pilkington had created a cartel by exercising control over the markets in which its licensees could sell float glass and construct float-glass manufacturing plants, and over the customers within each market to which each licensee could serve. It was claimed this was a violation of the Sherman Antitrust Act, because Pilkington's patents had expired and any trade secrets which it might have had in the process used by the licensees had long since become publicly known.[14]
