GenCorp

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GenCorp Inc.
Type Public
Traded as NYSEGY
Industry Aerospace, defense, and real estate
Predecessors General Tire and Rubber Company
Founded Akron, Ohio, United States (1915 (1915))
Founders William F. O'Neil
Headquarters Rancho Cordova, California, United States of America
Area served Nationwide
Key people Scott J. Seymour, (President and CEO)
Brands Aerojet Rocketdyne, Easton Real Estate
Revenue Decrease $419.5 million (Q3 2014)[1]
Operating income Increase $3.6 million (Q3 2014)[1]
Net income Decrease -$9.5 million (Q3 2014)[1]
Total assets Decrease $1.749 billion (Q3 2014)[1]
Total equity Decrease -$48.7 million (Q3 2014)[1]
Website www.gencorp.com/index.php

GenCorp Inc. is an American technology-based manufacturer based in Rancho Cordova, California. Established in 1915, GenCorp was formerly the General Tire and Rubber Company.

History[edit]

Background[edit]

Several decades after it began manufacturing rubber products, General Tire diversified into broadcasting and aeronautics.

In the 1940s, the Aerojet company began experimenting with various rocket designs. For a solid-fuel rocket, they needed binders, and turned to General Rubber for assistance. General became a partner in the company.

Radio broadcasting began with the purchase of several radio networks starting in 1943. In 1952, its purchase of WOR-TV expanded the broadcast business into television. In 1953, General bought the RKO Radio Pictures movie studio. All of its media and entertainment holdings were organized into the RKO General division.

Due to the studio and rocket businesses, General came to own a great deal of property in California. Its internal facilities management unit began commercializing its operations, landing General in the real estate business. This started when Aerojet-General Corporation acquired approximately 12,600 acres (51 km2) of land in Eastern Sacramento County. Aerojet converted these former gold fields into one of the premier rocket manufacturing and testing facilities in the free world. However, most of this land was used to provide safe buffer zones for Aerojet's testing and manufacturing operations. Later, as the need for these facilities and safety zones decreased, the property became available for other uses. Located 15 miles (24 km) northeast of Sacramento along Highway 50, the properties were valuable, being in a key growth corridor in the region. Approximately 6,000 acres (24 km2) of the Aerojet lands are now being planned as a community called Easton. Easton Development Company LLC was formed to assist in the process.[2]

Name change[edit]

In 1984, General created a parent holding company, GenCorp, for its various businesses. The main subsidiaries were:

  • General Tire
  • broadcaster RKO General
  • Diversitech General, a manufacturer of tennis balls and polymer products including automotive soundproofing and home wallpapers
  • defense contractor Aerojet.

Through its RKO General subsidiary, the company also held stakes in:

  • Frontier Airlines
  • RKO bottlers, which operated Pepsi-Cola distributorships
  • several resorts and hotels, including the Westward Look resort in Tucson, Arizona

Disconglomeration[edit]

Faced with a hostile takeover attempt, among other difficulties, GenCorp shed some of its long-held units in the late 1980s.

RKO General ran into difficulties with the Federal Communications Commission (FCC) during license renewal proceedings in the late 1980s. The FCC was reluctant to renew the broadcast licenses, due to widespread lying to advertisers and regulators. As a result of the protracted proceedings, GenCorp sold RKO General's broadcast properties beginning in 1987.

GenCorp also sold its former flagship, General Tire, to German tire maker Continental AG in order to concentrate on Aerojet.

In 1999, GenCorp spun off its Decorative & Building Products and Performance Chemicals businesses. GenCorp formed OMNOVA Solutions, Inc. into a separate, publicly traded company, and transferred those businesses into it.

GenCorp's two remaining businesses, as of 2008, are Aerojet and real estate.[3]

Aeronautics expansion[edit]

In July 2012, GenCorp agreed to buy rocket engine producer Pratt & Whitney Rocketdyne from United Technologies Corporation for $550 million.[4][5][6] The sale had been delayed for Federal Trade Commission's (FTC) approval. The FTC approved the deal on June 10, 2013, and it closed on June 17.[7] [8][9][10]

Pension and bond problems[edit]

GenCorp withdrew its over-funded pension during the real estate boom years of 2006 and 2007. The real estate bust caused an underfunding of the pension plan of over $300 million. This caused a freeze of its pension plan on Feb. 1 2009 and an end to 401k match on Jan 15 2009. The move was expected to save the company 29 million a year.[11]

The under funded pension gave the company a negative net worth of -6.88 per share as of 30 November 2009.

GenCorp also is holding $142.80 million in 4% bonds due in 2010 and $147.70 million in bonds due in 2011 that the company expects to have to repurchase, as of the 2008 Annual Report. "In December 2009, the Company issued $200.0 million in aggregate principal amount of 4.0625% convertible subordinated debentures ("4 1/16% Debentures") in a private placement to qualified institutional buyers under the Securities Act of 1933. Issuance of the 4 1/16% Debentures generated net proceeds of approximately $195.0 million, a portion of which were used to repurchase $124.7 million of the 4% Notes in January 2010. The remaining proceeds will be used to redeem a portion of the 9½% senior subordinatednotes ("9½% Notes"); pay accrued interest on the 4% Notes and 9½% Notes; and pay other debt issuance costs. "[12]

In March 2010 Gencorp amended a $280 million revolving line of credit [13]

GenCorp's former CEO J. Scott Neish resigned on Jan. 6 2010. He had been interim CEO from March 2008 (Terry J Hall resigned) head of the Aerojet division since November 2005. The new CEO was placed in as permanent and J. Scott Neish elected to resign from Aerojet. Scott Seymour had been the head of Northrop Grumman Integrated Systems from 2002 to 2008.[14]

GenCorp since 2008 has had significant changes in its Board of Directors and Corporate Officers, per the 2008 Annual Report:

"On March 5, 2008, Terry L. Hall resigned as a Director and as our Chief Executive Officer and President and our Board appointed three new Directors. The Board appointed J. Scott Neish, our Vice President and President of Aerojet, to serve as our interim Chief Executive Officer and President, pending the results of a search to identify qualified candidates to fill this position on a permanent basis. On May 15, 2008, Timothy A.Wicks, Chairman of the Board, Todd R. Snyder and Sheila E. Widnall resigned as Directors of the Company. Our Board of Directors appointed James H. Perry and Thomas A. Corcoran as new Directors on May 16, 2008, and September 25, 2008, respectively. On September 29, 2008, Yasmin R. Seyal, our former Senior Vice President and Chief Financial Officer, and R. Leon Blackburn, our former Vice President, Controller left the Company and our Board appointed Kathleen E. Redd, Vice President, Finance of Aerojet, to serve as our Vice President, Chief Financial Officer and Secretary."

References[edit]

External links[edit]