E.W. Howell Co., Inc. | Luxury Residential Market CollapseDuring the 1930s
Luxury Residential Market Collapse
During the 1930s
As the luxury residential market collapsed during the mid-1930s, the result of the Great Depression set off by the stock market crash, E.W. Howell was forced to shift its focus. With the founder well into his 70s, the second generation took greater control and moved the firm away from residential to commercial construction, opening a second office, located at 101 Park Avenue in Manhattan, in 1935. Given that it had built the homes of many of the country's greatest industrialists, E.W. Howell was well positioned to take on the commercial needs of many of these same individuals. The economy picked up with the advent of World War II, spurred by defense spending. Then during the postwar boom housing developments sprouted up throughout Long Island, as the parents of the baby boom generation fled the New York City boroughs for the new suburbs. Although E.W. Howell elected not to become involved in the construction of housing developments, limiting its residential work to the luxury market, it did take advantage of Long Island's expansion to take on the construction of other projects made necessary by the growing population: schools, hospitals, commercial buildings, and industrial space.
In 1947 several younger family members were named partners: Ralph D. Howell, Jr., Rogers Howell, Elmer B. Howell, Oliver B. Howell, and Louis E. Lee. In February 1954 Elmer B. Howell died, followed several months later by his father and founder of the firm, E.W. Howell, at the age of 94. Over the next 30 years other members of the Howell family sold their share of the business to outsiders, so that by 1984 only Ralph D. Howell, Jr., remained. When he retired in November of that year, he left the firm in the hands of five nonfamily partners.
The Howell name lived on with the firm, which continued to reap the benefits of its reputation for building quality homes. During the 1980s the firm took on a number of renovation projects on older buildings and, in some cases, the restoration of historic buildings. In 1981, for instance, E.W. Howell restored a pair of landmark Manhattan townhouses to create offices for U.S. Trust Co., work for which the firm received the New York Landmarks Conservancy's 1981 Chairman's Award, and in 1985 it restored the Rhinelander mansion on Long Island, allowing the structure to be converted to a retail store. E.W. Howell was able to draw on older workers as well as the offspring of some of the firm's employees who had worked on some of the Gold Coast mansions to provide some forgotten skills needed in these restoration projects. But the firm still had difficulty finding enough skilled workers, since younger people in the construction trade had been trained to work with steel, concrete, and sheetrock. As a result, E.W. Howell began pouring over old work rosters and looking up the progeny to see if little-used skills had been passed on from father to son. The firm also turned to preservation societies and architectural experts to compile a list of craftsmen, which were then compiled into a computer database for future reference.
In January 1986 Norway's largest civil engineering and construction company, Selmer-Sande A/S, acquired an 80 percent interest in E.W. Howell. At the time, the firm ranked 180th among the largest 400 construction firms in the United States, generating annual sales of $120 million. In addition to its Long Island headquarters, E.W. Howell maintained offices in Manhattan; Cherry Hill, New Jersey; Valhalla, New York; and Denver. Less than three years later, however, the Norwegians sold the company to Obayashi for $7 million.
Obayashi possessed a history as deep as E.W. Howell. Its founder, Yoshigoro Obayashi, founded a construction company in Oskaka, Japan, in 1892, a year after Howell and Brown launched their business. Obayashi's first major break came in 1901 when the firm won an important contract to design and build the grounds for the fifth National Industry Fair held in Osaka three years later. In 1920 some of its executives traveled to the United States to study modern construction techniques, which the firm applied to the construction of major projects in Japan, including the Mainichi Newspaper Office, the Sumitomo Building in Osaka, and the Merchant Marine Building in Kobe, Japan. Expertise gained in earthquake-resistant and fireproof construction techniques were then put to use following the Great Kanto Earthquake of 1923 that virtually destroyed Tokyo. After Japan's defeat in World War II, Obayashi spent a decade recovering, not winning its first major postwar contracts until 1956, when it built the Tokyo railroad station annex. Other projects from this era include work for the Japan Broadcasting Corporation and the firm's first hydroelectric power dam. In the mid-1960s Obayashi branched out further, building its first highway.
In the early 1980s the firm anglicized its name, becoming Obayashi Corporation, and began to expand internationally. It began doing work on mainland Asia, such as renovation work on the Shanghai International Airport in the People's Republic of China. In 1985 Obayashi entered the U.S. market, as did other Japanese construction firms around this time. In the beginning the Japanese came to serve as construction managers in the construction of manufacturing plants for Japanese high-tech companies, but it soon became apparent to their American general contractors that they planned to stay and start looking for building work. Obayashi opened a San Francisco office, where it won a contract to install a major sewer system. To expand its range of job opportunities, the firm in 1986 became a member of the U.S. Civil Engineering Society. It was then awarded a $62 million contract by the Army Corps of Engineers to build a dam on Elk Creek in Oregon, an ill-fated project that would be shut down a year later by the federal government because of environmental concerns. Nevertheless, Obayashi had established a presence in the U.S. market, one that was strengthened in 1988 by forging an alliance with the U.S. construction firm of Fluor Daniel Inc. to combine their efforts in building plants and research facilities in both countries.
Obayashi's acquisition of E.W. Howell was part of an effort to expand beyond the West Coast to take on projects in the Midwest and the eastern parts of the United States. Under Japanese ownership, E.W. Howell opened offices in Atlanta and Chicago, but the company remained very much a New York metropolitan-oriented construction firm. Obayashi took a hands-off approach to the management of E.W. Howell, allowing American managers to serve the market they knew extremely well, while the company expanded its operations to Europe and took on more work in Asia. E.W. Howell's current president, Howard Rowland, was well familiar with the firm and the market, having come to the firm in 1983 as a project manager, at a time when it was still run by the Howell family. He held a number of positions before ascending to the presidency in February 1997.