Illinois Tool Works

ITW strives to improve our customers' competitive positions by increasing productivity and quality while reducing manufacturing and assembly costs. ITW achieves this goal through its decentralized operations in 34 countries. These units respond to customers' needs by establishing production facilities in proximity to the markets served and create close working relationships with our customers. ITW's many businesses around the world are focused on serving their customers' and industries' diverse requirements. Despite the variety of markets served, the underlying goals that drive all ITW businesses are common: to create value and improve operating efficiencies for every customer. In 1912, four Smith brothers advertised for experienced manufacturing workers to help them set up a new business producing metal-cutting tools to serve expanding midwestern industry. With the backing of their wealthy and influential father, Byron Laflin Smith, the brothers formed Illinois Tool Works Inc. in Chicago. The company prospered. Under Smith family management through much of its history--the family still owned about 28 percent of the company in the late 1990s--Illinois Tool Works became known as a company with conservative management and innovative products that made big profits on small items. By the 1990s the company was somewhat changed with management placing a greater emphasis on acquisitions, even if it meant going into debt. ITW, as the company is generally called, operates 365 decentralized businesses that are organized into two main business segments--Engineered Components, and Industrial Systems and Consumables. In 1857, just 20 years after the city of Chicago was incorporated, Byron Laflin Smith's father set up Merchants' Loan & Trust to help fledgling businesses get off the ground, becoming the first Chicago resident to own a Chicago banking institution. The city's population was approximately trebling each decade as railroads and the Great Lakes made it a transportation and manufacturing center. As the city grew, the corresponding real estate boom made rich men richer. The elder Smith took advantage of all these opportunities to make his family one of the wealthiest and most influential in the Midwest. After graduating from the University of Chicago, Byron Smith went to work for his father at Merchants' Loan & Trust. Working in the family business did not last long, however. When he was 25 years old, Smith struck out on his own, founding the Northern Trust Company in 1879, which was to become one of the city's premier banking institutions. A successful man in his own right by the early years of the 20th century, Smith saw other opportunities in the growing city. Through his business connections, Smith realized that there was an increasing need for large-scale production of machine tools for the growing transportation and communication industries. These emerging industries needed more parts than small machine shops could provide, and Smith thought he and his sons Solomon, Harold C., Walter, and Bruce were just the men to fill the need. In 1912 the Smiths placed an advertisement for experienced manufacturing workers. They chose Frank W. England, Paul B. Goddard, Oscar T. Hegg, and Carl G. Olson to help get Illinois Tool Works off the ground, and Harold and Walter Smith managed the new company. Solomon Smith continued to work at Northern Trust--he succeeded his father as president when Byron died two years later--and Bruce went to work in New York. In 1915 Harold C. Smith became president of Illinois Tool Works, and Walter and Solomon Smith continued to serve on the board of directors. Harold built on the company's initial success in selling tools to manufacturers and soon expanded the company's product line into truck transmissions, pumps, compressors, and automobile steering assemblies. While investing heavily in modern plants and equipment, Smith insisted on the conservative financial approach that ITW became known for, maint