Tools and Tool Buying

[whitedogstr8leg]

 News just in:   Stanley has bought Black & Decker!   ALL of Black & Decker. 

[Dave in Md]

It's planned but has not quite happened yet.  I sent an email to a buddy of mine that works in the Towsen HQ of B&D to get his opinion as to a good thing or not.

I spoke to my buddy and the employees are pretty much in the dark, they only are guessing that current B&D mgt may not make out too well.

[rondud]

I guess I don't see this as a good thing.  I read an article a couple of years ago that Stanley kept a HQ offshore to avoid paying taxes.  That plus their quality has slipped severely since they started manufacturing their tools overseas.  B&D had issues before and this won't help their case.  Do I hear taps blowing for DeWalt which is a B&D subsidiary?

[rph816]

I hope no taps, B&D has been buying up everything they can get their hands on.  It's too bad, a lot of quality names are being dragged through the mud.  I don't have issues with overseas manufacturing.  They're people who need jobs too, what I do have a problem with is crap.  I have used lots and lots of Makita's that are amazing tools, I've also used prior generation Porter Cable stuff that is tough as nails.  Now you can buy the 18v Porter Cable stuff (really Skil Firestorm) at Lowes for less than 1/2 what the good stuff sold for.  Companies like Grizzly have done a good job keeping quality reasonable without breaking the budget for us hobby guys.  I do worry about overseas manufacturers (particularly in mainland china) that exploit workers, turn out shoddy products and flood our market places killing the market share of reputable companies with good products. 

Ryan

[Allen Worsham]

This story appeared in my local newspaper this morning.

http://www.pe.com/business/local/stories/PE_Biz_S_stanley03.383ee11.html 

Stanley to buy Black & Decker

RIVALS MERGE: The deal would create the largest U.S. toolmaker, according to a financial analyst.

06:56 PM PST on Monday, November 2, 2009

By ASHLEY M. HEHER
The Associated Press

The tool maker Stanley Works is buying rival Black & Decker Corp. for $4.5 billion, the two companies said Monday, uniting two of their industry's most iconic brands.

The deal would create the largest U.S. toolmaker, Morningstar analyst Anthony Dayrit said.

Stanley shareholders will own about 50.5 percent of the combined company, which will be called Stanley Black & Decker. Black & Decker shareholders will hold a 49.5 percent stake after the all-stock deal is complete.

"This is a unique opportunity to bring together two great companies, each with first-rate brands, and provide enhanced opportunities to generate superior returns as we build on this new, larger platform," Stanley Chairman John F. Lundgren, who will be president and CEO, said in a statement.

Black & Decker shareholders are to receive about 1.28 shares of Stanley Works for each share they own. The nine members of Stanley Works' board will remain in place and be joined by six new members from Black & Decker's current board.

The deal will cut costs by $350 million within three years, likely in part through job cuts, and grow earnings per share by $1 within three years, the companies said.

Executives said most of the savings will come from reducing corporate overhead and consolidating business units and manufacturing, distribution and purchasing.

Black & Decker, based in Towson, Md., has 22,100 workers. Stanley Works, based in New Britain, Conn., has 18,200 workers. The combined company's corporate headquarters will remain in Connecticut while its power tool division will remain headquartered in Maryland.

Stanley Works' brands include its Stanley tools line and FatMax, Bostitch and Mac Tools, which are used on cars. In addition to its namesake line, Black & Decker owns DeWalt, Porter-Cable, Kwikset and Baldwin brands, which are popular with both consumers and professionals.

Each company's board of directors has signed off on the deal, but it still must win regulatory and shareholder approval.

[nold.dog]

"This is a unique opportunity to bring together two great companies, each with first-rate brands, and provide enhanced opportunities to generate superior returns as we build on this new, larger platform," Stanley Chairman John F. Lundgren, who will be president and CEO, said in a statement.

Please notice that the CEO said: "...enhanced opportunities to generate superior returns...".  NOT "...enhanced opportunities to generate superior products..."

Suddenly, Festool and Fein don't seem to be outlandishly expensive..........

Don

[amateur60]

Making superior products has never been about capabilities.  Any of the US (or Chinese for that matter) makers could manufacture Festool quality tools.  It's about marketing decisions concerning what markets to produce for, what price points to hit, etc.  Neither of the companies needed an aquisition to produce higher end tools, if they thought there was a sufficient market for them.  I'll bet the cheap orange and black B&D electric drills are sold in many multiples of the numbers of grey and green Festool drills.  Do your stock holders want you to make $4 profit for each drill and sell 3 million of them, or do they want the company to make $50 per drill and sell 200,000.

[UtahJ]

You are right, Amatuer60. Sadly right.

[handyman john]

Profit margins; better profits; stock holders; better tools?

There is no right or wrong here. A company makes what they make and sells what they sell. You either buy it or not. If it works for you, great; if not, buy something else.

I find some Stanley tools to be great while indeed other stuff is just so much scrap metal.

Milwaukee tools learned that in the 80's - Harley learned it the hard way too. AMF makes bowling equipment NOT motorcycles. If Stanley/Black&Decker makes junk we won't buy it. Its pretty simple - make garbage and the government bails you out cuz your "too big to fail" - make GOOD stuff and you won't NEED a bail out OR Government ownership.

[Gary K.]

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amateur60 wrote:

Making superior products has never been about capabilities.  Any of the US (or Chinese for that matter) makers could manufacture Festool quality tools.  It's about marketing decisions concerning what markets to produce for, what price points to hit, etc.  Neither of the companies needed an aquisition to produce higher end tools, if they thought there was a sufficient market for them.  I'll bet the cheap orange and black B&D electric drills are sold in many multiples of the numbers of grey and green Festool drills.  Do your stock holders want you to make $4 profit for each drill and sell 3 million of them, or do they want the company to make $50 per drill and sell 200,000.

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Ahhhh    I think I'll go with Festool.