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Old 11-16-2011, 05:28 AM   #1
retDAC
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Join Date: Oct 2011
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Default Lumidor, Waterloo, and Sears (Craftsman)

Noticed the name Lumidor on an old top chest I got from a pawn shop a few years ago. Ran a search and some folks here have Lumidors which are good boxes, but nobody seemed to know much about the company.

Ran a Scroogle search for "Lumidor tool. Didn't seem to pull anything pertinent. So ran a Scroogle search for "Lumidor tool box". Nothing, nothing, noth...., hmmm, at #48 what's this?

http://www.boe.ca.gov/legal/pdf/83-sbe-041.pdf

It's a photocopied record of a hearing before a board on an appeal by Lumidor to the Calif state tax people. It cites the decision to deny by the board and the reasons. The hearing was in Feb-Mar 1982 regarding some taxes in '70-'72.

Why'd that come up in this search but I didn't see it in the previous one?

More important why the heck did I start this thread?

In this appeal hearing record there is a historical account of Lumidor which some GJ members might find interesting.

There is also some history of Waterloo.

Perhaps more enlightening: it also shows an instance where Sears did some manipulation? of one of its suppliers (Waterloo) in order to save its corporate investment in another (Lumidor). And an example where Sears would demand and get a supplier to do something for Sears' convenience at great risk to the supplier.

Remember Lumidor is Appellant/appellant.

"Appellant is a California corporation incorporated in 1943, with its principal place of business in Los Angeles, California. Until 1956, appellant's largest single shareholder was Sears, Roebuck & Company (Sears), which owned 30 percent of appellant's stock. In 1956, Sears was concerned that appellant would be forced to liquidate because of large losses which Sears attributed to poor management and lack of resources. Sears persuaded Waterloo Industries, Inc., (Waterloo) to buy out certain shareholders related to appellant's management, promising to provide financing and additional business for Waterloo."

"After obtaining a majority interest in appellant's stock, Waterloo effected a reorganization of appellant's management. By 1964, when Waterloo acquired its present 81.17 percent interest in appellant, appellant was showing a profit."

"During the years on appeal, the other shareholders of appellant were Sears (13.76 percent) and three individual shareholders (5.07 percent)."

"Waterloo is an Iowa corporation with its principal place of business in Waterloo, Iowa. During the years on appeal, all of Waterloo's stock was owned by members of one family and five of these shareholders filled most of the executive positions in that company."

The next paragraph reports how many officers and board members of Waterloo were also officers and/or board members of Lumidor. Two Sears' employees were also on Lumidor's board. Then:

"Both appellant and Waterloo manufactured tool boxes and related items primarily for sale to Sears, which sold these items under its proprietary "Craftsman" trademark. (Sears also buys such products from other companies.) Sales to Sears constituted approximately 65 percent of appellant's sales during the appeal years and approximately 85 percent of Waterloo's sales during the same period. Appellant and Waterloo also manufactured various other products which each marketed under its own name. At no time did appellant and Waterloo use any common trade name or trademark. Sales, both to Sears and others, were negotiated separately by the two companies. Neither company serviced the products of the other after the manufacture or sale by either company."

Cooperation including trade of goods and services between Lumidor and Waterloo is listed. They shared at least one patent and:

"Although each company had its own research and development department, developments relating to products for Sears were shared because Sears insisted that the products manufactured by the two companies be as nearly identical as possible."

Buried in all the next financial stuff about this tax appeal and hearing is this:

"A further strong indication of contribution and dependence is also a result of the companies' relationship with their common major customer. It appears that Sears required appellant and Waterloo to maintain a full complement of certain items even though at times Sears could not purchase all of these items. (Bolding added) Rather than both companies making all the items in the quantities required by Sears, appellant and Waterloo arranged to supply each other to meet those requirements. In this way, the stock of each company was maintained at the required level with a minimum of manufacturing costs."

I note here this kind of requirement by Sears is what reputedly resulted in the eventual bankruptcy of the High Standard Manufacturing Company, which made paper punching equipment among other things.
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Last edited by retDAC; 12-16-2011 at 03:54 AM.
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Old 11-16-2011, 09:28 AM   #2
HandyManny
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Default Re: Lumidor, Waterloo, and Sears (Craftsman)

Waterloo has made many of Craftsmans tool boxes over the years. Generally I find Waterloo (under their own brand) to be decent tool boxes or at least they were, not sure about thier new stuff. However some of the stuff they make for Sears is junk lately. Just very thin gauge steel being used, drawers that don't open correctly, drawers that catch and hang-up on opening, etc.....
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