Houdaille-Hershey Corporation

Houdaille-Hershey Corporation was a major American manufacturing conglomerate formed in 1929 through the merger of the Houdaille Corporation and the Hershey Corporation. Headquartered in Buffalo, New York, it became a significant supplier to the automotive industry, particularly known for its shock absorbers and power steering components. The company expanded through a series of strategic acquisitions, evolving into a diversified industrial entity before its eventual acquisition by Parker Hannifin in 1987. Its history reflects broader trends in 20th-century American industrial consolidation and corporate raiding.

History

The corporation was established in 1929, combining the shock absorber expertise of John R. Houdaille's Houdaille Corporation with the bumper manufacturing operations of Charles L. Hershey's Hershey Corporation. During World War II, the company was a vital contributor to the Arsenal of Democracy, producing critical components for military vehicles and aircraft. In the postwar boom, it capitalized on the rapid expansion of the American automobile industry, with its products becoming standard on vehicles from General Motors, Ford, and Chrysler. The 1970s marked a period of significant corporate transformation, culminating in a landmark 1979 leveraged buyout orchestrated by Kohlberg Kravis Roberts & Co., one of the first major LBOs of a New York Stock Exchange-listed company. This buyout was later challenged in the notable Supreme Court case, *CTS Corp. v. Dynamics Corp. of America*.

Products and operations

The company's core business centered on automotive suspension and steering systems. Its most famous product line was the Houdaille hydraulic shock absorber, which set industry standards for performance and durability. The corporation also manufactured MacPherson strut assemblies, power steering pumps and valves, and torsion bar suspensions. Beyond automotive, its diversified divisions produced industrial pumps under the Viking Pump brand, machine tools, and construction materials. Key manufacturing plants were located in Buffalo, New York, Logansport, Indiana, and Monroe, Michigan, supplying both the original equipment manufacturer (OEM) and aftermarket segments globally.

Corporate acquisitions and divestitures

Growth was heavily driven by an aggressive acquisition strategy. Significant purchases included the Owatonna Tool Company (OTC Tools) in 1966, Viking Pump in 1968, and the machine tool builder Burgmaster in 1965. The 1979 leveraged buyout by Kohlberg Kravis Roberts & Co. took the company private, leading to a period of asset sales to service debt. Major divestitures in the 1980s included the sale of the Viking Pump division to its management and the OTC Tools unit to Emerson Electric. These moves streamlined operations back to its automotive core, making it an attractive target for Parker Hannifin, which completed its acquisition in 1987.

Corporate identity and branding

The corporation maintained a strong engineering-focused identity, often branding its automotive components simply with the "Houdaille" name, which carried significant cachet with automakers and mechanics. Its corporate logo typically featured a stylized representation of a shock absorber. While its various acquired companies, like Viking Pump and Burgmaster, often retained their own distinct brand identities in their markets, the parent company was known within Wall Street and industrial circles for its pioneering financial structure following the leveraged buyout. This deal was extensively covered in publications like *The Wall Street Journal* and analyzed in books such as *Barbarians at the Gate: The Fall of RJR Nabisco*.

Legacy and impact

The 1979 leveraged buyout is considered a watershed moment in corporate finance, demonstrating the power of junk bonds and ushering in an era of hostile takeovers and shareholder activism. The subsequent legal battles influenced state takeover statutes, notably the Indiana law upheld in *CTS Corp. v. Dynamics Corp. of America*. Industrially, its technologies became integral to automotive design, with many of its former product lines continuing under Parker Hannifin. The company's story is a classic case study in the transition from family-owned manufacturing to conglomerate and, finally, to a financial engineering target, mirroring the evolution of American industry in the late 20th century.

Category:Manufacturing companies of the United States Category:Companies based in Buffalo, New York Category:Defunct manufacturing companies of the United States