USG Corporation, also known as United States Gypsum Corporation, is an American company which manufactures construction materials, most notably drywall and joint compound. The company is the largest distributor of wallboard in the United States and the largest manufacturer of gypsum products in North America. It is also a major consumer of synthetic gypsum, a byproduct of flue-gas desulfurization. Its corporate offices are located at 550 West Adams Street in Chicago, Illinois.
USG's most significant brands include Sheetrock Brand Gypsum Panels, Securock Brand Glass-Mat Sheathing, and Sheetrock Brand All Purpose Joint Compound.
In December 2013, Warren Buffett's Berkshire Hathaway became the largest shareholder in the company (holding roughly 30%) when it converted USG convertible notes it had acquired in 2008 to common stock.
In June 2018, USG entered into an agreement to be purchased by the privately held building materials company Knauf. It operates as an independent subsidiary of Knauf and continues to remain headquartered in Chicago, Illinois. The deal closed in April 2019.
History In 1890, New York Coal Tar Chemical Company employees Fred L. Kane and Augustine Sackett developed plaster boardNew drywall resists mold, mildew Chicago Tribune. Access date: 2024-08-22 by strengthening the plaster with Plaster of Paris sandwiched between heavy paper, creating a viable competitor to traditional lime plaster.About Gypsum Gypsum Products Development Association. Access date: 2024-08-22 Sackett patented the new drywall product as Sackett Board in 1894.Augustine Sackett National Inventors Hall of Fame. Access date: 2024-08-22
Since gypsum was plentiful, available at a relatively low price, and used a simple manufacturing process, new firms flooded and fragmented the market, placing constant downward pressure on prices.
On December 27, 1901, 30 gypsum and plaster companies merged to form the United States Gypsum Company (USG), resulting in the creation of the first nationwide gypsum company in the United States. The new company combined the operations of 37 mining and calcining plants producing agricultural and construction plaster.A Visual History of the United States Gypsum Co. Architect. Access date: 2024-08-22 Directors of the new firm selected B.W. McCausland of Michigan for its first president; in 1905, he was succeeded by his previous Alabaster Company business partner's son, Sewell Avery, who served in the role for 35 years.USG Corporation Encyclopedia.com Access date: 2024-08-22
In 1909, Avery led the USG acquisition of the Sackett Plaster Board Company, inventor of Sackett Board, which was a panel made of multiple layers of plaster and paper. Patented by USG in 1912, a new manufacturing process produced boards with a single layer of plaster and paper that could be joined flush along a wall with a relatively smooth surface. Originally called Adamant Plaster Board, the product became known as Sheetrock in 1917,Drywall vs. Sheetrock: Is There Really a Difference? The Spruce. Access date: 2024-08-22 with the new term credited to USG sales representative D.L. Hunter of Fort Dodge, Iowa.Quite Adamant, U.S. Gypsum. Sheetrock’s Missing Link Preservation in Mississippi. Access date: 2024-08-22
By the 1930s, the company's policy of diffusion of manufacturing facilities, vertical integration, and product diversification allowed it to operate profitably every year during the Great Depression. The 1933 Chicago World's Fair featured buildings made almost entirely out of sheetrock panels,Schrenk, Lisa D. Building a Century of Progress: The Architecture of the 1933–34 Chicago World's Fair. University of Minnesota Press, 2007. pages 130-131. Access date: 2024-08-22. . which led to the brand's first major advertising campaign.
The 1950s and 1960s saw expansion into Mexico and other international markets.
Recession and its effect on the bottom line dominated the 1980s and led to a restructuring of the company. On January 1, 1985, USG Corporation was formed as a holding companya reverse merger in which United States Gypsum Company became one of just nine operating subsidiaries.
In the mid- to late-1990s, the company invested in a significant expansion of its manufacturing network, adding new high-speed wallboard manufacturing operations in Rainier, OR, Bridgeport, AL, and Aliquippa, PA. Other existing operations were substantially rebuilt or modernized, including the wallboard manufacturing plant in East Chicago, Indiana.
In 1999, USG acquired Sybex, Inc., the holding company for Beadex (a competing joint-compound manufacturer) and Synkoloid. Other USG subsidiaries at the time included Alabaster Assurance Company, CGC, Donn Products, Exploracion de Yeso, Grupo Yeso, Gypsum Engineering, H & B Gypsum, L&W Supply, La Mirada Products Co., Inc, Red Top Technology, and Yeso Panamericano.
In 2001, the company entered Chapter 11 bankruptcy proceedings to resolve legacy asbestos lawsuits. Asbestos was a minor ingredient in some specialty products that the company had stopped selling almost 40 years earlier, in the 1970s. The company's operations remained healthy and profitable while it was in Chapter 11. When the bankruptcy was completed in 2006, all creditors were repaid in full and USG shareholders retained equity in the company. In a Wall Street Journal article dated February 15, 2006, Warren Buffett said, "It's the most successful managerial performance in bankruptcy that I've ever seen."Years Into Filing, USG Is Smiling The Wall Street Journal Access date 2024-08-24 A $3.95-billion trust was created to handle all existing and potential future asbestos lawsuits, thus permanently resolving the asbestos litigation issue.
USG adapted during the Great Recession, which hit the residential and commercial construction markets in mid-2006, resulting in a decreased demand for drywall.Drywall maker in pain as U.S. housing suffers The New York Times. Access date: 2024-08-22 USG cut costs by closing some of its operations, including the shuttering of its Empire, Nevada, facility in 2011.Empire: The death of a Nevada company town Las Vegas Review-Journal. Access date: 2024-08-22
William C. Foote, the company's CEO for almost 20 years, retired in 2010, and 30-year USG veteran James S. Metcalf was elected Chairman, President, and CEO. Metcalf implemented the company's "Plan to Win", which involved strengthening its core manufacturing operations and L&W Supply distribution business, diversifying sources of revenues and profitability, and differentiating the company from competitors through innovative products and services. The company returned to profitability in the first quarter of 2013, posting net earnings of $2 million, followed by $26 million in net income in the second quarter of 2013.
In 2020, the 2011 closure of its Empire, Nevada, operation was referenced in the movie Nomadland.
Corporate structure USG Corporation has the following significant subsidiaries:2011 Form 10-K, Exhibit 10.21
United States Gypsum Company USG Interiors, LLC Otsego Paper, Inc USG Foreign Investments, Ltd CGC Inc. USG Latin America, LLC USG Holding de Mexico S.A. de C.V. USG Mexico S.A. de C.V.
Corporate headquarters building In 1992, USG moved its corporate headquarters from 101 South Wacker Drive to 125 S. Franklin Street in Chicago, a site which it occupied until March 2007. Known as the USG building, the structure is part of the dual-tower AT&T Corporate Center, which was completed in 1989. The building was designed by Adrian D. Smith, FAIA, RIBA Design Partner at Skidmore, Owings & Merrill, and constructed by Morse Diesel within its $110-million construction budget. The USG building is tall and houses 35 floors and of space, including of retail, a 650-seat restaurant expansion, and two levels of below-grade parking for 160 cars. USG had its own entrance with a lobby and occupied the first nine floors exclusively and parts of the 11th floor. Italian marble is used as cladding and also in the highly ornate interior. The interior also features gold leaf and satin-finish brown and American oak wood trim. Parts of the building lobbies were used in the filming of the 1994 film Ri¢hie Ri¢h.
In 2005, USG announced that it would not be renewing its lease at the 125 S. Franklin Street building and instead would move to a new building at 550 W. Adams, developed by Fifield Companies. The base building architect is De Stefano + Partners, with The Environments Group providing the interior space design and construction. USG entered a 15-year lease, and occupied the building in early 2007. The new building is occupied 65% by USG and 10% by Humana Inc. As an incentive for USG to remain in the downtown Chicago area, the city of Chicago created a redevelopment agreement that contributed $6.5 million to the construction of the new building. In turn, USG agreed to maintain at least 500 full-time-equivalent jobs at all times for a period of ten years at the new corporate headquarters.
Manufacturing and mining facilities Gypsum wallboard manufacturing facilities are reported to the SEC based on the extent to which the gypsum they use comes from synthetic or natural sources.
CountryGypsum WallboardJoint CompoundCement BoardMines and QuarriesPaper for Gypsum WallboardCeiling Suspension SystemsCeiling PanelsFull syntheticPart syntheticNatural gypsumUnited States Aliquippa, Pennsylvania Bridgeport, Alabama East Chicago, Indiana Galena Park, Texas Norfolk, Virginia (idled) Washingtonville, Pennsylvania Baltimore, Maryland (Idled) Jacksonville, Florida Shoals, Indiana Plaster City, California Rainier, Oregon Sigurd, Utah (Idled) Sweetwater, Texas Sperry, Iowacloser to Mediapolis than to Sperry Auburn, Washington Baltimore, Maryland Bridgeport, Alabama Chamblee, Georgia Dallas, Texas Denver, Colorado East Chicago, Indiana Fort Dodge, Iowa Galena Park, Texas Gypsum, Ohio Jacksonville, Florida Glendale, Arizona Port Reading, New Jersey Sigurd, Utah Torrance, California Baltimore, Maryland River Rouge, Michigan New Orleans, Louisiana Alabaster, Michigan Fort Dodge, Iowa Plaster City, California Shoals, Indiana Sigurd, Utah Southard, Oklahoma Sperry, Iowa Sweetwater, Texas Galena Park, Texas North Kansas City, Missouri Oakfield, New York Otsego, Michigan Stockton, California Cartersville, Georgia Westlake, Ohio Weirton, West Virginia Cloquet, Minnesota Greenville, Mississippi Walworth, WisconsinCanada Wheatland County, Alberta Hagersville, Ontario Montreal, Quebec Calgary, Alberta Hagersville, Ontario Montreal, Quebec Surrey, British Columbia Hagersville, Ontario Little Narrows, NS Oakville, OntarioMexico Monterrey, Nuevo León Puebla, Puebla Saltillo, Coahuila San Luis Potosí, San Luis Potosí Tecomán, Colima Monterrey, Nuevo León Puebla, Puebla Monterrey, Nuevo León Monterrey, Nuevo León San Luis Potosí, San Luis Potosí Tecomán, Colima
USG has a large gypsum plant located west of El Centro, California, along highway Interstate 8, at Plaster City, California. The Plaster City location makes Sheetrock brand gypsum panels. The gypsum is mined from a quarry located to the north, in the Fish Creek Mountains of Imperial County. The quarry is estimated to contain a deposit of 25 million tons of gypsum.