Eberhard Faber IV (center) meeting with the board in 1971 (© Fortune).
This wasn’t the first time Eberhard Faber Inc. had experienced difficulty. Leading up to 1971, the company had lost money for three consecutive years and had experienced a twelve-week strike. The board hired a labor consultant to effect a solution with the workforce, but rather than the company having a labor problem the consultant discovered instead that there was a management problem.
From 1960-69 Eberhard Faber IV, grandson of Lothar Washington Faber and great-grandson of Johann Eberhard Faber, worked for the company in varying capacities: as an assistant secretary, an assistant treasurer, treasurer of the corporation, and by 1966 he became a company director. But by 1969 he decided to leave: the company was doing well, he was bored with his duties, and he wanted to pursue a writing career. He moved with his wife and two children to Belle Mead, New Jersey, just outside of Princeton. At the same time however, the company began showing signs of trouble.
The labor consultant recommended that Eberhard Faber IV be brought in as president of the company, and the board agreed. Faber began by reducing inventory and cutting the operating budget, allowing for the company to pay off their bank loan. Together, with the help of everyone at the plant, Eberhard Faber Inc. worked its way back to profitability.
Eberhard Faber IV addresses company employees in 1971 (© Fortune).
From 1971 to 1983 the company remained profitable, but the industry was due for consolidation: there were 17 pencil companies sharing a market of approximately 125 million dollars in the United States.
Despite successes in the commercial art market, including their Design brand of markers, 1983-85 were difficult years for the company. The move to Mexico of their packaging and assembly operations in 1986 was fraught with difficulties, and the specter of chains like Staples was looming on the horizon. Quietly, negotiations were begun with Dixon to purchase Eberhard Faber Inc., the result of which would be a combined company. Dixon, however, was driving a hard bargain—so much so that contact was eventually made with Faber-Castell U.S.A.
The German branch of Eberhard Faber Inc. was sold to Staedtler in 1978, so the sale would exclude any terms for Europe. Faber-Castell, having recently lost out in an attempt to acquire the Empire Pencil Company, offered generous terms for remaining stock, manufacturing equipment, and Eberhard Faber’s brand rights, including such iconic pencils as the Mongol and the Blackwing.
Faber-Castell 1989 catalog.
On October 5th, 1987, a purchase agreement was signed between Eberhard Faber Inc. and the Faber-Castell Corporation. After 138 years, Eberhard Faber would no longer be making pencils in America.
Sources for this series of posts include the article “What Happened When I Gave Up The Good Life And Became President” from Fortune Magazine, as well as conversations with those directly involved in the sale of the company.
Thanks to A.W. Faber-Castell for scans of the 1989-90 catalog.