Administration
9-793-035
REV: JULY 26, 2005
STEPHEN P. BRADLEY
Crown Cork & Seal in 1989
John F. Connelly, Crown Cork & Seal’s ailing octogenarian chairman, stepped down and appointed his long-time disciple, William J. Avery, chief executive officer of the Philadelphia can manufacturer in May 1989. Avery had been president of Crown Cork & Seal since 1981, but had spent the duration of his career in Connelly’s shadow. As Crown’s new CEO, Avery planned to review Connelly’s long-followed strategy in light of the changing industry outlook. The metal container industry had changed considerably since Connelly took over Crown’s reins in 1957. American National had just been acquired by France’s state-owned Pechiney International, making it the world’s largest beverage can producer. Continental Can, another long-standing rival, was now owned by Peter Kiewit Sons, a privately held construction firm. In 1989, all, or part of Continental’s can-making operations, appeared to be for sale. Reynolds Metals, a traditional supplier of aluminum to can makers, was now also a formidable competitor in cans. The moves by both suppliers and customers of can makers to integrate into can manufacturing themselves had profoundly redefined the metal can industry since John Connelly’s arrival. Reflecting on these dramatic changes, Avery wondered whether Crown, with $1.8 billion in sales, should consider bidding for all or part of Continental Can. Avery also wondered whether Crown should break with tradition and expand its product line beyond the manufacture of metal cans and closures. For 30 years Crown had stuck to its core business, metal can making, but analysts saw little growth potential for metal cans in the 1990s. Industry observers forecast plastics as the growth segment for containers. As Avery mulled over his options, he asked: Was it finally time for a change?
The Metal Container Industry
The metal container industry, representing 61% of all packaged products in the United States in
REV: JULY 26, 2005
STEPHEN P. BRADLEY
Crown Cork & Seal in 1989
John F. Connelly, Crown Cork & Seal’s ailing octogenarian chairman, stepped down and appointed his long-time disciple, William J. Avery, chief executive officer of the Philadelphia can manufacturer in May 1989. Avery had been president of Crown Cork & Seal since 1981, but had spent the duration of his career in Connelly’s shadow. As Crown’s new CEO, Avery planned to review Connelly’s long-followed strategy in light of the changing industry outlook. The metal container industry had changed considerably since Connelly took over Crown’s reins in 1957. American National had just been acquired by France’s state-owned Pechiney International, making it the world’s largest beverage can producer. Continental Can, another long-standing rival, was now owned by Peter Kiewit Sons, a privately held construction firm. In 1989, all, or part of Continental’s can-making operations, appeared to be for sale. Reynolds Metals, a traditional supplier of aluminum to can makers, was now also a formidable competitor in cans. The moves by both suppliers and customers of can makers to integrate into can manufacturing themselves had profoundly redefined the metal can industry since John Connelly’s arrival. Reflecting on these dramatic changes, Avery wondered whether Crown, with $1.8 billion in sales, should consider bidding for all or part of Continental Can. Avery also wondered whether Crown should break with tradition and expand its product line beyond the manufacture of metal cans and closures. For 30 years Crown had stuck to its core business, metal can making, but analysts saw little growth potential for metal cans in the 1990s. Industry observers forecast plastics as the growth segment for containers. As Avery mulled over his options, he asked: Was it finally time for a change?
The Metal Container Industry
The metal container industry, representing 61% of all packaged products in the United States in