Sale of the Century

Employee Ownership

With President Albert Salt
As Graybar’s first president in 1925, Salt was a publicity mastermind and wasted no time in making Graybar a household name.
leading the newly formed Graybar, the company continued to prosper. But Western Electric faced the challenge of finding a buyer that would maintain the generous pension, health and other benefits that employees enjoyed under Western Electric.

When no outside buyers were found, the employees offered to purchase the company for $9 million. Initially, the employees paid $3 million, and Western accepted $6 million of Graybar non-voting preferred stock for the balance. When the sale closed
1929 On January 1, Graybar employees buy their company from Western Electric for $3 million cash and $6 million of Graybar preferred stock.
on January 1, 1929, Graybar became the largest employee-owned company in the nation.

Just nine months after this momentous purchase, the stock market crashed. By 1932, Graybar sales had dropped 67 percent from 1929 and the company was losing money for the first time in its brief history. In spite of the incredibly difficult economic conditions, Graybar management led the company through the Great Depression with optimism. The company continued to expand geographically and even added 14 new offices in the 1930s.

Even during the Great Depression, Graybar continued to make consistent dividend payments and maintain benefits for employees and retirees.

Graybar’s appliances
The company not only sold electrical and telephone equipment but also inherited the household appliance business of Western Electric. Western Electric sewing machines, vacuum cleaners and other consumer products were rebranded with the Graybar name.
— encompassing washing machines, vacuum cleaners and other products inherited from Western Electric — underwent dramatic change in the late 1920s and early 1930s before succumbing to the lethal effects of the Depression. For nearly a decade from 1926 through 1934, Graybar was a well-known consumer brand.

Continue to the next chapter: Soaring to New Heights