Common knowledge?

[bigsteel15]

I've seen and participated in a lot of discussion here about the BORG and Ryobi/Ridgid relationship but nobody has ever mentioned the ownership of TTI.
Is it common knowledge here that HD owns Ridgid? I am assuming this would mean they own TTI and would therefore include Ryobi.
In that case, I can see why nobody at Ryobi would really know what's going on with OUR saw.
I was talking to a guy at Windsor Plywood today. He said that HD has owned Ridgid for over a year now and that he was reading in a trade mag that Ridgid sales went up 25% but their profit was down 10%. This would be typical of HD pushing them to make things cheaper, as in more profit for the store.
The Freud guy was at the HD when I was there and he said "Oh, well your saw comes with a Freud blade".
Wasn't he surprised when I shoed him the display model with the chinese blade.

[mschrank]

Yeah, something happened recently with TTI and Ridgid.

The TTI Website does not list Ridgid as one of its brands.

I searched high and low, but could find nothing about Home Depot acquiring Ridgid. If they did, seems strange that it's not publicized. They don't seem too shy about listing their acquistions.

EDIT: Maybe y'all already know this, and I don't know why I care...but I guess I was under the impression that TTI owned both Ryobi and RIDGID. No so. Here's what I've been able to put together:

RIDGID is owned by Emerson Electric. Power tools supplied (manufactured) by One World Technologies, which is owned by TTI

Ryobi is Owned by TTI

Both RIDGID and Ryobi are exclusively sold by Home Depot.

I've always thought that eventually, there will only be a few companies (or one? ) that own EVERYTHING!

[Tequila]

The HD 2005 Annual report describes the relationship this way:

... we have formed strategic alliances and exclusive relationships with selected suppliers to market products under a variety of well-recognized brand
names. During fiscal 2005, we offered a number of proprietary and exclusive brands across a wide range of departments including, but not limited to, Behr Premium Plus paint, Charmglow gas grills, Hampton Bay lighting, Mills Pride cabinets, Vigoro lawn care products, Husky hand tools, RIDGID and Ryobi power tools, Pegasus faucets, Traffic Master carpet, Glacier Bay bath
fixtures and Veranda decking products.

TTI and HD seem to be completely independent companies.

[JR]

According the Ridgid web site the company is owned by Emerson Electric of St. Louis, MO, which is publicly traded company (ticker = emr). Their principle ownership is listed here:
http://finance.yahoo.com/q/mh?s=EMR

Home Depot is also a publicly traded company (ticker = hd). Their ownership is listed here"
http://finance.yahoo.com/q/mh?s=HD

I notice that Legg Mason and Mellon are investors in common, as are a few mutual funds due largely their membership in the S&P 500 and other indexes, but those organizations have small fractions of the ownership.

They have no executives in common, but I wasn't able to find the composition of their boards.

Bottom line = the relationship between these two organizations is arm's length with no material common ownerhsip.

JR

[bigsteel15]

OK, so I guess it's just as stated and the report he saw was after Ridgid made the exclusivity deal with HD.
'Probably the same thing for Behr paint. Windsor Plywood said they can't buy Behr products anymore. They bought a large supply of Behr Poly on the last buy they were allowed. It's on for $32/gallon.

[cwsmith]

Ridgid and Ridge Tool are owned by Emerson Electric. Ryobi and One World Technologies (OWT) are owned by TTI. Milwaukie was recently purchased by TTI (TechTronics International). TTI is headquartered in Hongkong, China and is a global company, which now manufactures "Ridgid" brand power tools under a license agreement with Ridgid and Emerson Electric. Here is the press announcement: http://www.ridgid.com/news/RidgidBrandRel.pdf

TTI has an agreement with HomeDepot for the exclusive marketing and sales of their power tool products under the Ryobi and Ridgid brands. However, as I understand it, TTI also markets these brands in other countries and is not bound by the HomeDepot agreement in such instances.

Ryobi/TTI also makes many tools which wear the Craftsman brand which is sold at Sears and K-Mart. TTI owned Milwauki and Homelite products can be found in stores other than HomeDepot, as I believe can Ryobi garden tools.

While many of TTI products are made in China, some are made in Taipai, Germany (Ridgid-branded angle grinder, 1/2-inch impact drill, and jig saw are, for the moment, made by Metabo). Milwaukie's are still primarily made in U.S. and Ryobi Routers are made in the U.S. However, TTI is a fast growing company and it's manufacturing (country of origin) and acquisitions are hard to keep pace with.

TTI is NOT owned by Home Depot, or at least there is no record of such ownership that I can find.

Ridgid plumbing and shop vac products are still made here in the U.S.A. by Ridge Tool and Emerson Electric and are not part of the TTI licensing agreement or TTI's exclusive retail agreement with HomeDepot.

Oh, I should add that the "Orange Aprons" are generally so ill-informed (not their fault), that you'll hear almost anything.

Hope this helps,

CWS

[JR]

Lemme see if I got this right.

• OWT/TTI manufactures Ridgid woodworking tools for Ridge/Emerson. Those tools are sold in the USA exclusively through Home Depot.
• TTI has a similar distribution arrangement with Home Depot for their Ryobi brand tools.
• These three organization have no common ownership.

You know I've worked in distribution before and we were always kept away from these kinds of sweetheart arrangements. We were always told we couldn't offer product to only one distributor without offering similar terms to others.

Here we have the largest home center retailer obtaining product exclusively from two different vendors, and in fact the products are actually made by one of those vendors.

This sounds awfully exclusionary to me, with the possibility of controlling prices through monopolistic practices. Why isn't it illegal?

JR

[bigsteel15]

This sounds awfully exclusionary to me, with the possibility of controlling prices through monopolistic practices. Why isn't it illegal?

JR

The way around it would be to change the brand name to look like a house branding...wait a minute, Ryobi IS a BORG house brand now isn't it?
Ridgid probably qualifies as well, except they actually are better known for their industrial tools.
Best "house brand" product I've seen other than Veritas.
Now there's a guy who got it right.

[cwsmith]

JR,

I'm not sure that I would say that, "OWT/TTI manufactures Ridgid woodworking tools for Ridge/Emerson". Ridge/Emerson doesn't market or service those tools. The entire product line is the responsibility of TTI, but I'm sure Emerson gets some cut as part of the "Licensing Agreement".

Up to about three or four years ago, Emerson/Ridgid designed and built woodworking tools, but their stuff was shop equipment like the 3650 saw, 1550 drill press, etc. It was all painted gray with orange trim. They produced no hand held power tools. I'm not sure how much of that was made here in the U.S., but at least near the end of that period, they were subcontracting to TTI and TTI was building it FOR Ridgid.

Then, as I understand it, Ridgid decided to get out of that end of the business. It sold the rights and "licensed" the Ridgid brand name to TTI. TTI took over the responsibility entirely, not only manufacturing the tools, but also coming up with new designs, introducing the hand-held power tool line, setting up the service and warranty system and chose to handle the distribution and sales through Home Depot. As such, Emerson and Ridge tool has no responsibility toward the tools other than any concerns it may have over the use of its name brand.

CWS

[JR]

CWS,

That seems to be a fair description of the relationship. It stil, in my mind, begs the question as to how they structured it so there is no anti-trust implication.

HD has a huge impact on the retail market. Not Walmart levels of impact, but Fortune 100 level anyway. With two similar lines of tools pledged to exclusivity through HD there is no hope for the consumer to buy those goods in a competitive market. Granted, there are competing brands available through other channels, but the Ryobi and Ridgid brands would seem to have their channel sewn up tight.

I'm not really complaining. They're good tools offered at fair prices in a retail outlet with a huge footprint. It may be a hassle to get service at HD, but you can get it just about anywhere if you need it. I guess it's more intellectual curiosity. How'd they do that without breaking any laws?

JR

[gmack5]

CWS,
I guess it's more intellectual curiosity. How'd they do that without breaking any laws?
JR

What makes you think they haven't broken any laws?
They justy haven't been challenged......yet.

[crokett]

HD has a huge impact on the retail market. Not Walmart levels of impact, but Fortune 100 level anyway. With two similar lines of tools pledged to exclusivity through HD there is no hope for the consumer to buy those goods in a competitive market. Granted, there are competing brands available through other channels, but the Ryobi and Ridgid brands would seem to have their channel sewn up tight.

There are plenty of other choices besides Rigid and Ryobi. I for one have 6 different brands of tools in my shop that I can remember just sitting here. The prices on the tools will be much the same as prices on similar tools from other sources.

[dwolsten]

That seems to be a fair description of the relationship. It stil, in my mind, begs the question as to how they structured it so there is no anti-trust implication.

I'm not really complaining. They're good tools offered at fair prices in a retail outlet with a huge footprint. It may be a hassle to get service at HD, but you can get it just about anywhere if you need it. I guess it's more intellectual curiosity. How'd they do that without breaking any laws?

Simple: they don't have anything close to monopoly status. If Ryobi and Ridgid had 90% marketshare in power tools, it'd be a different story. But as it is, there's plenty of competing brands, some better than others: P-C, DeWalt, Milwaukee, Delta, B&D, GMC, HF, Jet, General, Bosch, Hitachi, Makita, etc. There's so many brands, in fact, that it actually makes a lot of sense that we're seeing the consolidation going on right now.

As long as you don't control a huge share of the market, there's nothing at all illegal about exclusivity contracts.

[TheRic]

Think about Craftsman. It's only sold thru Sears (and now probally K-mart). Just because one brand is sold only one place doesn't make it a monopoly, not when you have hundreds of other choice, some cheaper, some more expensive, some good, some not good enough to even count as junk.

[LCHIEN]

CWS's posts have the correct information as I understand it.
JR, there are a couple of types of monopoly, vertical and horizontal.
Horizontal is where you control one level, either a key material or manufacture or distribution. None of these are monopolized.
Vertical monopoly is where you control the an entire process top to bottom which includes the raw material, manufacture and distribution.
Some aspects, e.g. manufacture and distribution are here, but its not a complete monopoly and not illegal if there are others in the market and able to compete.