The need for expensive new technology and for a greater worldwide market appear to be the major factors that led the local owners of American Brass to agree to sell the company to a Finnish firm, the Outokumpu Group.
"They have the only really innovative technology in the industry," Joseph E. Goodell, president of American Brass, said of Outokumpu (pronounced Auto-kum-pu). The transaction, for an undisclosed amount, was announced Wednesday.
The purchase, which has to be approved by the U.S. government, will enable American Brass to become more competitive with its biggest U.S. rival, the Olin Corp., and with a new Korean brass plant in Iowa, according to Goodell.
Pertti Voutilainen, chairman of Outokumpu, said American Brass gives his firm a strong presence in the United States, which it lacked.
He said he was attracted to American Brass because of its reputation for quality and because of its high-quality management headed by Goodell. He said the management will be kept and given a free hand.
Voutilainen, a graduate of Penn State University, said the new owners "will look at improving the operation" of American Brass, but he made no definite commitment about how much it might invest in new equipment.
Voutilainen also said the labor contracts covering production and maintenance workers here and at the American Brass plant in Kenosha, Wis., which employs 600, will be kept in force.
The company also owns a cooper tubing mill in Franklin, Ky., which has 150 employees.
Union officers at the Buffalo plant first heard about the planned purchase when company executives met with them about 10 a.m. Wednesday.
"I was surprised. I thought they were going to talk to us about an acquisition," said Jack S. Williams, president of Local 593 of the United Steelworkers of America, which represents 650 plant employees.
Williams said he thought the purchase would be a good thing for the workers. "It's a big organization and it has modern technology to keep us in the market and make the improvements this company wants to make," he said.
Union and management officials plan to further discuss the changed situation at a meeting Friday. The union has a successor clause in its contract that commits a new owner to honoring its contract, he said.
The plant will be closed next week for summer vacation.
American Brass will become part of the Outokumpu Copper Group, which includes three U.S. companies: Valleycast Inc. in Appleton, Wis.; the Nippert Co. in Delaware, Ohio, and Outokumpu Copper in Chicago.
The Cooper Group also has plants in Sweden, Spain, the Netherlands, Norway, Denmark and Finland.
The parent Outokumpu corporation does $3 billion in sales worldwide and has more than 16,000 employees engaged in mining, metallurgy, copper products, stainless steel, electronics, engineering and equipment.
American Brass has been reported to have annual sales of more than $350 million.
Talks that led to the purchase agreement started in March. "We recognized our need for new technology and the talks eventually led into signing the agreement today," Goodell said.
Executives of both companies declined to disclose the price Outokumpu paid for American Brass, but they said it was entirely a cash deal.
American Brass was purchased in 1985 from the Atlantic Richfield Co. by a group of local investors headed by Randolph A. Marks, retired chairman of Computer Task Group, and Paul W. Joy, former president of the Carborundum Co.
The purchase price at that time was reported to be about $160 million.
After the purchase, the American Brass company's headquarters was moved from Illinois to its 23-acre site on Military Road and Sayre Avenue in Buffalo.
Since the Buffalo plant's founding in 1907 as Buffalo Copper and Brass Rolling Mills, the local facility has been a leading producer of brass and copper strip products.
Many of its products are used by manufacturers of automobile radiators and air conditioners. The Lockport-based Harrison Radiator Division of General Motors Corp. and the Blackstone Corp. in Jamestown are major customers.
The company's products also are widely used for doorknobs and other decorative parts of buildings, including the extensive polished brass bar and lobby of the Ramada Renaissance Hotel in Cheektowaga.
The Buffalo facility became a division of Anaconda Copper and Mining Co. in 1917. In 1977 Atlantic Richfield purchased Anaconda.