Long Lasting Friendship with a Catholic Friend
Henry M. Raufer
Raufer grew up in South Jersey as a devout traditional Catholic. After service in the Navy he obtained his degree in electrical engineering and started work on improving transformers for Philadelphia Electric. He had already started a family that would continue to enlarge over the years.
From Rowan's book: The Fire Within copyrighted 1995.
"At that time--in 1957--he was an electrical engineer with the Philadelphia Electric Company. His job was secure and he was earning a good salary. But, as he explained, working for a big, bureaucratic utility didn't offer the growth or the challenge he was looking for.
A few days after he joined us I gave him his first challenge. I needed a licensed engineer to back me up and make sure that all plans and designs were done to precise engineering standards. He was going to be that licensed engineer.
He wasn't too happy about the idea, at first. "Hank, earning that license will take a lot of study, and review classes are expensive," he complained.
"Don't worry about the cost, "I told him. "We'll pay all the expenses--tuition, books, even your mileage to class--on the day you hang your license upon the wall."
A year later, his study completed and all the examinations passed, Hank Raufer had his engineer's license hanging on the wall and he was reimbursed for all his expenses. "You know, Hank," he admitted, "if you hadn't prodded me a little bit, I might never have gotten that license." He was justly proud of the accomplishment."
While Inductotherm was in Delanco Raufer did some very important engineering work to improve the product lines Rowan was selling. His work also included a new transformer design that would insure the future success of Inductotherm.
An important change for Raufer and the Catholic Church occurred when Pope Pius XII died on October 9, 1958. The new Pope, John XXIII, at the age of 72 was elected as a papa di passagio, a transitional pope. He transformed the mass and many other traditions of the church before he died on June 3, 1963. The Polish Cardinal Montini who took the name Paul VI succeeded him and supervised the completion of the Second Vatican Council, in 1965.
My first meeting with Raufer was in 1960.
Rowan needed more cash than he wanted to borrow when he moved the Inductotherm operation to Rancocas. He decided to delay the payment of bonuses so Raufer quit in the early 60's. It was not a pleasant "good-bye".
Raufer teamed up with Anderson, Inductotherm salesman, as consultants on high frequency induction melting for Brown Boveri. At the next Foundry Show they proudly displayed a single meter, single control knob, small induction power supply to compete with Rowan.
When Europe began to rebuild the bombed out factories they used 50-cycle induction furnaces as a quick and more efficient way of melting cast iron and other foundry metals. Brown Boveri led the way in sales of this equipment and by 1967 were the leading suppliers of the class of equipment in the world including the USA.
Ajax needed good people with experience for a new operation they established in England and were lucky to find Raufer. He moved his growing family to England and learned how to be a manager of a small company in England.
Upon his return to the USA he became the manager of the coreless furnace department with Ajax in Warren, Ohio. In 1966 he sold a Multiductor to Don Furman and Al Talbot at Austinal for their new vacuum-melting furnace. This furnace was used exclusively for remelting scrap generated from their large investment casting facility in Dover, New Jersey.
Raufer lived in a racially mixed neighborhood of Youngstown with his growing family. The sixties transformed the thinking of many conservatives and Raufer was among those who accepted liberal thought.
Raufer was ready to move when he was called in the spring of 1967. He brought his wife to Hamburg to discuss the details with me and when she approved we shook hands. Raufer told his family that it was the answer to a lifetime of prayer, it was the Pentecost. He was allowed to decide how much money we would invest the new company. He was able to come up with $10,000 by selling a swimming club membership and using the reserve cash established for his oldest son's college.
As the President of Cragmet Raufer had the same pay, $20,000, and benefits as his two Vice Presidents. Cragnolin, an Italian Catholic, had deep ties to Utica and refused to move to Rancocas. In the spring of 1968 Raufer was nervous as we flew to Utica to tell Cragnolin he was fired. It turned out to be a pleasant meeting as Cragnolin was relieved when his investment was doubled. Raufer had to borrow $7,500 for the Provident Bank with the newly purchased stock as the security.
Raufer hired Marie Raup, a very liberal Catholic, as the companies secretary and the Mamma of Cragmet. He hired, Ted, the first and only black man on Indel Avenue at the suggestion of Marie. Ted was a want to be musician with considerable talents. For a celebration of the hiring Marie arranged for his band to perform at the Pirates Inn for the group.
Raufer arranged a weekend retreat at Saint Francis Loretto Seminary during the fall of 1968 for the purpose of having his conservative Catholic friends from the Youngstown area meet his liberal Catholic friends from South Jersey. This Seminary was the teaching college for the new priests for the Johnstown, Pennsylvania area and was led by Father Picard.
Two of the Catholic men Raufer selected for the retreat were Ajax Magnethermic salesmen he had recently hired. Don Songhurst had some experience in selling vacuum melting equipment in a project he and Joe Lona handled for Ajax in 1964. John Fellnor had experience in the foundry area where Cragmet wanted to expand the business.
Raufer also selected, Gene Schroch, the first member of Cragmet's engineering staff and his Vice President James Metcalf. Schroch at that time was completing the new office and manufacturing building at 65 Indel Avenue for Cragmet on the Inductotherm property in Rancocas, New Jersey.
The reason for selecting Metcalf was to show off his partner and because he was a mix between a liberal and conservative and a confirmed Southern Baptist agnostic.
When the time came for communion on Sunday morning there was a discussion on what to do with the non-Catholic in the group. At Raufer's suggestion Father Picard took a cup from the kitchen to serve the communion to all. Raufer still has this cup in his office.
Raufer and I sold some stock to Fellnor, Songhurst and a new employee, Horn, we hired from Stokes. Our largest sale of stock was to Joe Lona who joined us in late 1968. We used a price that was based on ten times the projected earnings because Rowan was planning on making Inductotherm a public company in the near future. All these new employees except Lona were short timers and lost no money on the stock. Lona hung on to his stock and his job until the merger with Consarc in 1978. I paid him much more than book value that included reasonable interest on his investment. I did not ask Raufer to help me with this purchase.
In 1970 Raufer played a big part in the sale and design of the Aerojet. He did all the calculations for the induction coil required matching our new miniseptor. The following year he presented a technical paper on this subject to the American Vacuum Society.
Raufer was probably very upset with me in May 1971 when he learned that we were merging with Cheston and his new title would be Vice President in charge of engineering of our future induction heating company. Making Dick Hill the president of the new company did not change the fact that the three of us were shareholders and controlling directors of the company with equal pay.
In late 1971 I led the effort to purchase the control division of the Pelton Water Wheel Company. This event gave Raufer additional business and engineering responsibilities. After the vacuum melting job for the Russians was finally closed in August 1973 I asked the board to appoint me as chairman of the board because I saw some friction between Raufer and Hill.
The vast possibilities of dealing with a central purchasing agency in Moscow purchasing for an entire country and a young lady I met in June 1973 kept me busy traveling to Moscow for almost one year.
I was working on one very good potential order in July 1974 that included an isopress for compacting tool steel powder into ingots. Crucible was supplying the technology and Autoclave Engineering was quoting the isopress. The business was awarded to ASEA in Sweden. I had come to the conclusion that quoting was an expensive proposition.
When I returned to the US Raufer told me he has accepted Rowan's offer to manage his operation in Brazil. On the 14th of July 1974 a paid Raufer $20,600.53 for his class B stock. I was upset with Rowan when he hired Raufer against strict agreements that we would not hire each other's people without mutual agreement. Rowan allowed Raufer to swap his Cragmet stock for Inductotherm stock. I also made it very clear to Rowan that while I had not rights to Raufer's founding stock the right to own 20% of the shares by the minority and control of the board would not change.
The Fire Within records the event as follows: "This wasn't the way we were used to doing business, so I flew to Brazil to take a firsthand look at the situation. The first matter of business was to sever connections with our Brazilian partner; if he could spend $350,000 before we'd built a single furnace, how much could he spend once we got into production?
With the money gone, and with a work force to train and production deadlines to meet, Larry Pringle offered me his candid assessment of the situation: he was in over his head. He wanted to go home.
I consented, and told him that as soon as I returned to Rancocas, I would replace him with Hank Raufer. Raufer was now a 15-year veteran of our company, and if Inductotherm, Brazil, was a challenge, well, that's what he'd joined us for."
Factually Raufer worked for Inductotherm about four years in the late 50's and early 60's.
The PE license was a plus but it was the induction equipment experience and education that made the difference. I remember only one time where Raufer used his stamp and that was on a sewer we installed at 65 Indel Avenue in late 1968 while Raufer was President of Gragmet.
Now he was CEO of Inductotherm, Brazil with a huge debt and a ton of obligations. He was wise enough to limit his company's new offerings to smaller, simpler equipment that could be produced cost effectively; thus he decided to offer nothing bigger than 500 kW or 5,000-pound Mark 11 solid-state inverters and TRI-LINES. Before his work force wound a single coil, however, Raufer was determined to teach his men the Inductotherm way of working. He shocked the Brazilians by showing up in work clothes instead of pinstripes. He persuaded them that by meeting Inductotherm's standards, they were making their own jobs secure. He also introduced an incentive plan and an annual bonus plan. But Inductotherm, Brazil wasn't just going to make furnaces better than anyone else in South America; the new company was going to service them better, too. Raufer gave his service manager full authority to hire the qualified people needed to maintain the equipment in the field.
The Rancocas-grown formula of hard work and perseverance made Inductotherm, Brazil the most successful furnace maker in the country. Within two years of setting up shop, Raufer's company had gained close to 65% of the market."
Raufer was enjoying the work in Brazil but was about to lose some members of his large family if he did not return to New Jersey. For the second time he quit Inductotherm and Rowan was not pleased but allowed him to accept a sales engineer job with Consarc working for John Haubenstein, vice president of sales at Consarc. Rowan would not allow Raufer to keep his Inductotherm stock but allowed him to swap it for Consarc stock. He became to first stockholder of Consarc since the departure of Wooding. Stan Meyers, president of Consarc, was planning a stock option for himself and other key people and limited Raufer's number of shares so he had to sell a portion for cash.
After the job in Kramatorsk was finally finished Rowan and I agreed to split Cheston and move the induction-heating portion to Inductoheat and merge the vacuum melting portion into Consarc. To make that possible he purchased most of the Consarc land and then declared a dividend. Raufer was the first and perhaps last person to pay tax on a dividend at the Inductotherm Group.
Myers fought me tooth and nail on the method to share ownership but in the end it all worked and the merger took place in 1978.
Raufer continued in sales with me doing my thing on selected projects until Haubenstein resigned in 1984. He then became Vice President of sales with me in Scotland doing my thing.
Raufer retired from Consarc sometime after I resigned from the company in July 1987. He remained an active consultant to Consarc for several years and now as of 2004 was living in southern New Jersey. While we did not agree on each and every action there was never any break in a long lasting friendship with my Catholic friend.