The Salem News - March 26, 2007

Beverly's 'Shoe' once the country's largest factory with happiest employees
The Salem News

Over the past century and a quarter, the southern part of Essex County has served as an incubator for a number of world-renowned, multinational corporations, including General Electric, Sylvania and, in Beverly, the company that came to be known by the locals only as "The Shoe."
That firm, founded as the United Shoe Machinery Company in 1899, was the product of a merger of three separate companies, each of which brought something special to the table.

The McKay Shoe Machinery Co. was owned by Col. Gordon McKay, who had been manufacturing shoe-making machines since the Civil War era and had helped advance the use of modern equipment and methods in the shoe industry. Sadly, the colonel did not live long enough to see "The Shoe" begin production in 1906.

According to Daniel Hoisington, writing in "Made in Beverly," the new company was the brainchild of Sidney Winslow of Lynn, who was an officer of the Consolidated Hand Lasting Machine Co. which made the popular lasting machine invented by Jan Matzeliger. The third partner, the Goodyear Machinery Company, was valued for its new mechanized and cost-efficient method of attaching soles and uppers.

The merger brought to an end years of fighting and lawsuits among the three companies over various patents and licenses.

The United Shoe Machinery Corp. (it was incorporated and renamed in 1905) burst on the American industrial stage in a way that no other company of its time had. Within a decade, "The Shoe" had established itself as one of the nation's first multinational corporations, with operations in Europe, Asia, and Canada. It was also one of the first to have its own research facility. The Beverly plant was said to be the largest factory in the world and boasted a work force of more than 4,000 men and women.

Innovation was a key to the company's success. The firm followed the business model developed decades earlier by Gordon McKay; equipment was leased rather than sold to shoe manufacturers and came with unlimited access to USM Corp. servicemen. The company also started and ran a vocational school to train mechanics for the future and acquired businesses that provided raw materials and components needed to make its machines.

The firm also understood that happy employees were productive employees, and was in the vanguard of worker benefits. Its workers were believed to be the highest paid in the world, and the factory was bright, clean, safe and in close proximity to a hospital. "The Shoe" boasted a yacht club, a country club with a golf course and multiuse clubhouse (now the Beverly Golf and Tennis Club), and an athletic association whose membership was open to the public. USM Corp. also provided 2,500 tilled garden plots for employees.

By 1907, noted reporter Tom Clark in the Centennial Edition of The Salem Evening News said "The Shoe" was regarded as the "most enlightened and benevolent employer in America."

The company's impact on the city of Beverly was stunning. "The Shoe" instantly became the community's largest single employer and taxpayer and spawned new neighborhoods on its western boundaries. Within a few years after "The Shoe" opened, the population of Beverly grew by nearly 4,000. Entire families, and multiple generations of families, many of them related to Italian stone workers who had migrated to Beverly to help build the Elliott Street plant, found employment at "The Shoe."

But in 1911, after just a half-decade of operation, the company was hit with an antitrust suit based on its dominance of the shoe machine industry and its leasing practices. That suit would eventually be responsible for "The Shoe's" demise. But in the decades before its final resolution, the company made a substantial fortune manufacturing shoe-making machinery and, beginning in the 1950s, unrelated products like rubber, plastics and electronic assembly system components.

During the diversification-driven decades of the 1950s and 1960s, "The Shoe" acquired more than 40 other companies. Non-shoe activity and revenue growth eventually came to dominate the company, and in 1968 the decision was made to change its name to simply USM Corp.

By 1971, as a result of the ruling in the government's long-running antitrust suit against the company, USM Corp. began divesting many of its assets and laying off many of its employees. By 1976, the once proud firm was in disarray and was absorbed by the Connecticut-based Emhart Corp. Just more than a decade later, the company that had developed more than 9,000 patented products and manufacturing methods closed its doors forever.