Friday, October 13, 2000
Hasbro exits home of Play-Doh, G.I. Joe
325 jobs, local toy-making history end
By Lisa Biank Fasig
The Cincinnati Enquirer
Hasbro Inc., the toy maker that entered Cincinnati by acquiring Kenner in 1991, said it will pull its operations from the Queen City by Jan. 1, eliminating up to 325 jobs and dissolving a local toy-making tradition.
The parent of G.I. Joe, Mr. Potato Head and Play-Doh said it will transfer the Boys Toys division and has offered to relocate about 25 percent of the 325 workers to its corporate offices in Pawtucket, R.I. Those who are not transferred will be offered severance packages.
Hasbro also will close operations in San Francisco and Napa, Calif., resulting in a total cut of 500 to 550 jobs worldwide, a 5 percent reduction.
Hasbro makes action figures Batman, the Starting Lineup series (Barry Larkin featured here) and G.I. Joe.|
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The consolidation of the U.S. toy group is part of a broad plan by Hasbro to achieve sustainable earnings and revenue growth in an industry that has become doggedly competitive.
The company also is considering strategic alternatives for its money-losing interactive toys and reducing reliance on riskier licensed products while focusing on core brands.
Today marks the first day of a new Hasbro, Alan Hassenfeld, Hasbro's chairman and chief executive, said in a conference call Thursday. I am confident we are making the right moves to make Hasbro leaner and more consistently profitable for shareholders.
The shuttering, slated for the end of the year, closes the door on a Cincinnati enterprise dating to 1947, when the Steiner brothers Al, Phil and Joe built a toy company that went on to make the Easy-Bake Oven and Spirograph. At one time, Kenner employed 1,300 people in Cincinnati, with a manufacturing plant in Oakley.
1923: Hasbro founded in Providence, R.I. |
1947: Kenner Products founded in Cincinnati.
1952: Hasbro introduces Mr. Potato Head.
1956: Rainbow Crafts of Cincinnatiintroduces Play-Doh; Rainbow later acquired by General Mills.
1963: Kenner introduces Easy-Bake Oven.
1964: Hasbro introduces G.I Joe.
1967: Kenner purchased by General Mills, which later buys Parker Brothers games.
1969: Parker Brothers introduces Nerf.
1984: Hasbro acquires Milton Bradley and its Playskool subsidiary.
1985: General Mills explores possible sale of Kenner and spins off its toy division (Kenner, Rainbow Crafts and Parker). Kenner cuts 600 seasonal workers and seven full-timers at its Oakley manufacturing plant as it shifts work overseas.
1986: Kenner cuts its salaried work force by 100, or 7 percent of its 1,300 salaried and hourly workers.
1987: New World Entertainment a Hollywood-based movie, television and comic book maker makes unsolicited bid for Kenner, Tonka tops the bid with a $581 million offer.
1987: Tonka cuts 100 salaried jobs at Kenner.
1990: Hasbro International is formed, combining several international markets under one management group.
1991: Hasbro acquires debt-burdened Tonka, including Kenner and Parker Brothers divisions. Cuts 300 jobs and shuts most of the local manufacturing and distribution operations.
1992: Hasbro relocates Kenner corporate offices from the Kroger Building to One Gateway Place on Elsinore Place and closes production at the Oakley plant.
1994: Hasbro buys the rights to certain games from Waddingtons, including Pictionary and Cluedo.
1995: Hasbro acquires Larami Corp. and its SuperSoaker line.
1997: Hasbro moves its girls division from Cincinnati and replaces it with Tonka trucks division. Also acquires Cap Toys Inc. and OddzOn Products, entering the candy business.
1997: Lucasfilm renews and expands its licensing agreement with Hasbro for the next three installments of Star Wars.
1998: Hasbro buys up a large portion of Atari's portfolio of video games. Nintendo selects Hasbro to develop and market a line of toys and games based on Pokemon.
1999: Hasbro announces it will cut about 19 percent of its work force 2,200 jobs as it shifts its focus to software and other electronic toys. Reports 6 percent cuts in Cincinnati.
2000: Hasbro announces it will shut its Cincinnati operations.
Sources: Cincinnati Enquirer, Hasbro.com, KennerToys.com
These days, Boys Toys develops lines for 12 brands, including Tonka, Batman and Star Wars action figures, and is considered by some as the crown jewel of Hasbro. The toy lines will continue.
It's the end of an era, there's no question about it, said Corky Steiner, son of Kenner co-founder Phil Steiner, who retired in March after 33 years with Kenner/Hasbro.
The folks that were here were probably some of the finest folks in the industry. The product is what makes the company, but the people are what makes the product.
Industry followers said Hasbro had no choice but reduce operations.
For the nation's second-largest toy company, the restructuring follows years of fast growth and operational shifts. Since buying Kenner as part of the Tonka acquisition in 1991, Hasbro has taken over several competitors, inheriting their far-flung operations.
Meanwhile, Hasbro is wrestling with intense competition from No. 1 toy maker Mattel and computer and video games. Hasbro said Thursday that its third-quarter profit to be announced next week would fall more than expected.
This is a long time coming, and a lot of the investment people felt this should have been done a year ago, said Jim Silver, editor of trade magazine the Toy Book. He thinks Hasbro held off closing Cincinnati because of the workers, but there comes a time when you have to listen to your shareholders, he said.
Glenn Curtis, an analyst with Worldly Investor Services in New York, said: Investors have been looking for management to do something for a long time. Hasbro has kind of been under pressure, along with other companies in the industry, and the stock has tanked.
Shares in Hasbro have dropped from about $18 at the beginning of the year to $10.06 1/4 Thursday, down $1.56 1/4 on the day.
Locally, the Kenner division of Hasbro has undergone many changes since its founding.
It changed hands three times, to General Mills in 1967, to Tonka in 1987 and finally to Hasbro. But the talent always remained in Cincinnati.
In December 1999, Hasbro said it would cut about 19 percent of its work force 2,200 jobs as it shifted its focus to software and other electronic toys. At the Cincinnati operations, at the One Gateway Place building on Elsinore Place downtown, about 25 jobs were reported cut.
After the site closings, Hasbro will operate five non-Rhode Island facilities, in Chicago, Seattle, Cherry Hill, N.J., and Beverly and Springfield, Mass.
Hasbro will take a fourth-quarter pretax charge of about $70 million for severance costs and lease terminations, the company said. Discontinued or disappointing product lines could result in another pretax charge of $70 million to $100 million.
The company expects to recover costs in less than three years.
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