Fifth Generation and Still Going Strong

Thomas C. Dolan

April 2006

"As far as I know, there is no other business in the industry that’s been in the same family for 117 years,” says fifth gen­eration president/CEO, Thomas D. Jacobson, Jacobson & Company, Inc., Elizabeth, N.J. "We started 117 years ago.”

In fact, the date of the founding, March 4, 1889, is the official date only. The actual start of the business goes back even earlier. Exactly when? No one knows In fact, the date of the founding, March 4, 1889, is the official date only. The actual start of the business goes back even earlier. Exactly when? No one knows for sure. Jacobson’s great great grandmother, Johanna Jacobson, ran a picture framing business for 10 years or so before selling it to her son, Gustave, in 1889. Johanna didn’t like New York City, where her business was located, and wanted to go back to Germany. Gustave wanted to get married, but needed to become a "man of affairs.” The acquisition of the business solved that.

Though the business started as a picture framing shop, Gustave took it into carved wood paneling. When plaster tech­nology came into vogue in the 1920s, the company made plaster molds from the wood carvings, put out catalogs, and sent the plastic molded products all over the world. Some of the work still stands, for instance, in the Metropolitan Museum of Art, the Hearst Castle in California, and some palaces in Cuba.

Great grandfather Gustave ran the business until 1926, when he passed it on to grandfather Victor, who took over until 1959. An employee, Martin Brennan, ran it until 1970. That’s when the current owner’s father, John D. took over until 1981. In 1981, second cousin Neal picked up the reins until he retired in 1993.

It was in 1993 that the current owner, Thomas D. Jacobson, took over. "Most of the others have been president of the business 10 or 11 years,” Jacobson says. "I’ve done it for 14 years now, the third longest.”

"In the 1930s, acoustical ceilings were invented, and we got in on the ground floor of those,” Jacobson says. The Great Depression dwindled the demand for ornate and ornamental plaster, and the company’s last big plaster jobs were at New York’s World Fair, the Trilon and Persiphere.

"All the ornate and ornamental plaster that had been so popular went completely out of style, in favor of smooth clean lines, which is what the architects desired,” Jacobson says. During the Depression, the company couldn’t afford to store the molds, so they dumped them into the East River and stayed with acoustical ceilings.

When World War II hit, the company became the sole supplier of portable acoustical airplane engine testing booths to all of the allied forces. For its war efforts, the company was four times awarded the Army/Navy E (for Excellence) Award, the highest honor Congress bestowed on companies who supported the country during the war.

"When our war work concluded, we went back to acoustical ceilings, which we continue to do successfully through today,” Jacobson says. "My grandfather, Victor, actually invented the very first exposed grid ceiling, a 6-inch wide beam member he called Acoustiline.” Jacobson adds that Victor was never able to successfully patent the idea, so other, larger companies picked up on the idea and refined it.

It’s Easy to Cross State Lines

When the current owner took over, the company was predominantly an acoustical ceiling contractor in New York City. "In 1995, we successfully entered the drywall business,” Jacobson says. "Had we not, we probably wouldn’t be in business today. The market was changing, and people wanted to buy both acoustical ceilings and drywall from the same source.” The company started its drywall venture doing small tenant fit-outs, which has evolved to its building two 1-million square-foot structures in New York City, including the two 50-foot towers of Ernst & Young, 5 Times Square and CIBC at 300 Madison Avenue.

In 1998, Jacobson began putting more resources into New Jersey. Its Elizabeth facility is its sole facility, but it is only 15 miles from Manhattan.

"The reason we’ve been able to stay in business for 117 years is that we’ve always been able to respond to and deliver what the marketplace needs and wants,” Jacobson says, "whether it be picture framing, wood paneling, plaster, acoustical ceilings or drywall, whether on a small or large scale.”

Yet the company has always been narrowly focused, and even now offers only acoustical ceilings and drywall. Many if not most wall and ceiling contractors may start out with a narrow focus, but gradually expand over the years. When asked about this, Jacobson responds that New York City unions tend to separate the different trades, plastering, fireproofing and so on, so there is less a tendency to offer multiple services as is often the case in other parts of the country.

But a more important reason, Jacobson says, "is we’ve not been successful by saying, we want to be in this business, so here’s what we can do for you.” In fact, when Jacobson took over, he did try tentatively to venture into different fields, but pulled back. "Rather than telling them what we can do for them, I’m always more sensitive to what the customers actually want,” he says. "Then I try to be flexible and deliver what they want.”

"We work to simplify what we do. We are known for old-fash­ion quality and superior service, and that’s what brings us the challenging high profile jobs,” he says.

The company does much of its work for Fortune 500 companies, such as American Express, Verizon and RJR Nabisco, especially the chairman’s offices for these clients. Jacobson & Company has worked on such landmarks as Penn Station and Grand Central Station. The company was part of the effort to reactivate the Exchange Place and construct the World Trade Center Temporary Path Center, two stations destroyed by the September 11 attacks. Recent completions have been the Nokia Theater and Rockefeller Center Observation Deck.

About 80 percent of the work is done in New York City, and 20 percent in New Jersey. "In New York City, the jobs are very close, the buildings tend to be much taller, and it costs a lot more to build there,” Jacobson says. "In New Jersey we cover a larger geographical area, the jobs tend to be smaller, and buildings are more spread out, built horizontally rather than going high.” Jacobson reports that commercial building has been booming in New Jersey, has been lagging about a year behind in New York City, but sees that boom coming. Meanwhile residential buildings have been booming in New York City, and, because he was asked to, he recently was awarded his first large scale apartment building.

About the Company

Jacobson & Company has approximately 30 employees in the office and 150 to 250 in the field. "We wouldn’t be where we are today without the wonderful people we have, with all their hard work, dedication and talent,” Jacobson says. "Many have been here their entire careers, and they make my job much easier.”

The company believes in bestowing recognition on its good employees, such as through its annual Foreman’s Meeting, the highlight of the year for them, when they receive monetary awards and prizes. Recognition is also provided through the Jacobson Hall of Fame into which special employees are inducted, and not necessarily every year.

"I’ve structured the company so that everybody is responsible and empowered to do their job,” Jacobson says. "Essentially, my job is to make sure they do their job, but I do it without looking over their shoulder or having them line up at my office with questions. This leaves me free to get involved in any special problems or opportunities.

About the Family

Often in family businesses there is tension when the older generation resists giving up the reins to the younger one. But Jacobson has not experienced this. "My father took over from his father, so he knew what it was like to take over, so when his watch ended, he let me take over without interference.” Jacobson’s brother, John Victor, works for the company in the field.

Is he a workaholic? "Not at all,” Jacobson says. "My philosophy is to do what the job requires. For instance, last Friday I was here until 7:30 p.m., but I generally work a 35- to 40-hour week. Again, the way I’ve structured the company is that the responsibility is shared, so I don’t have to try to do all the work myself.”

He describes himself as "very much a family man.” His wife, Marybeth, acts in regional theater. At age 43, he enjoys golf, biking and running.

Then there is his nine-year-old son, Steven, a brown belt in karate. Jacobson says his son "likes to write books and send them to publishing houses—he’s got half a dozen rejection letters. Steven is our sixth generation prospect.”

About the Industry

In terms of industry outlook, Jacobson says, "This is a very cyclical industry. The cycle has been down and now it’s starting to move up. But in the wake of Katrina and the booming business in India and China, there is the expec­tation that drywall may become unavailable. I’m worried about the short-term effect this may have on the industry.

Jacobson was president of the Ceilings & Interior Systems Construction Association in 2001 and 2002, and has been a member of the Association of the Wall and Ceiling Industry since 1997. "I think it’s wonderful that the two organizations are returning to a joint convention,” he says. "This is the best thing that can happen to our industry. It’s a credit to both organizations and their leaders that they have been able to put aside their differences and make this happen. It’s made a lot of people very happy.”

In terms of his own future, Jacobson says, "I’m pretty optimistic about the future markets in New York City and New Jersey. I plan to run the company for as long as I can, and I’m always looking for that next big indication from the market to add on another product to what we offer.”