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Emerald’s Note: This guest article is the work of my friend Gray Delany who recounts the history of how China drove his family’s flourishing flush valve company out of business over several decades. It’s the story of how countless small business owners in America were ruined by the suicidal trade policies of its inept politicians. With President Trump in office again, will America finally end its suicidal addiction to artificially cheap imports, and start making things again? This article forms the introduction to the book Reshore: How Tariffs Will Bring Our Jobs Home + Revive the American Dream by Spencer Morrison.
My father began working in the family business soon after he graduated from Wharton in 1971. Born twenty years later, I grew up knowing little about the company beyond the basics. My dad was quiet by nature, but I understood the last thing he wanted was for me to envision my own future in the family business. After he died, I came to understand why.
The tragedy of Coyne and Delany mirrors the story of thousands of once great American companies. The business was founded in New York City in 1879 by my great-great-great-grandfather John J. Delany and his partner Thomas Coyne. Originally known for its cast iron tubs, brass plumbers trim, wooden flush tanks and fittings, it was one of many small businesses started in the Northeast by the wave of Irish immigrants who arrived to America escaping the potato famine.
After Thomas Coyne died in 1910 with no male heirs, John Delany bought out his share of the business, and the company came fully under Delany family ownership, and changed its name.
In 1927, Delany achieved a major innovation with the creation of a more powerful and reliable flush valve called the Flushboy. The Flushboy produced a more forceful flush, reducing clogging and allowing for greater quantities of waste to be moved more efficiently to sewage treatment facilities. But the Great Depression started two years later.
The period was tough for Delany, as it was also for many companies, but it survived, and then expanded dramatically during World War II, thanks to contracts from military bases. It grew from a regional Northeast business to an international business, but continued to operate from the same mid-sized factory in Brooklyn it had used since its inception, and with the same small but skilled workforce.
Delany at the same time was one of an estimated 37,000 small-to-medium-sized, predominantly family-owned manufacturers in the New York metropolitan area. Manufacturing then employed more than a million people in the region, and generated an additional several hundred thousand jobs in Northern New Jersey and Connecticut, running to nearly thirty percent of the working population.
From left to right: Jack Delany, John J. “Doc” Delany, Graham Delany and A.B. Delany on the land of Delany’s proposed new plant in Brooklyn, early 1960s.
During and immediately after the war, CEO John J. “Doc” Delany patented a number of breakthroughs including the first ever rubber sleeve Vacuum Breaker in 1943, and the Regulating Screw in 1948, which improved functionality and ease of maintenance — long a defining feature of all Delany valves. In 1956, Doc patented yet another innovative trademark: the Rubberflex handle, which still today remains the only non-spring-loaded handle on the market.
By the 1970s, like many small companies in the Northeast, Delany was declining. By 1975, manufacturing employment in New York was half of what it had been two decades earlier. Andrew Battle, in his dissertation, Runaway: A History of Postwar New York in Four Factories, describes how this exodus was the result of misguided – and ethically questionable – municipal policies in the 1940s and 1950s. City officials were:
Seduced by academics who dangled ‘monumental public buildings and splendid plazas to replace the small-scale manufacturing they assured civic leaders was passé.’ (But it is also true) that industrial New York was not merely permitted to die but actively ‘assassinated’ by a coalition of planners, bankers, and real estate interests who conspired to purge the city of factories in order to increase the value of their real estate holdings and create opportunities for further speculation.
There was another critical factor to industry’s flight from the Northeast: pressure from foreign competition, often underwritten by foreign governments.
The new international economic order that emerged (post-WWII) underpinned a resurgence of both international trade and foreign investment. The stability of the system was underwritten by the economic power of the United States, whose currency served as an international reserve pegged to gold. Moreover, the US actively pursued the rehabilitation of the European and Japanese economies via loans, direct aid, the transfer of technology, and the suppression of militant, left-wing trade unionism. This aid to the capitalist classes of their respective countries was undertaken not out of charity but as a matter of both economic and political strategy. Japanese firms, which flooded the United States with manufactured goods beginning in the 1950s, helped to jeopardize manufacturing profits in a cascading series of industries. During the ensuing decades, the US doubled down on this strategy by accepting an uneven playing field, tolerating protectionism, state support for and coordination of industry, and the consistent undervaluing of currencies on the part of its (foreign) rivals while eschewing these strategies for the US economy. In this way, writes Robert Brenner in the most comprehensive economic history of the period, the US government “helped to create the conditions for the secular decline of competitiveness of US domestic manufacturing.”
Between 1969 and 1973, manufacturing profitability in the United States collapsed, falling by 40%. As Spencer Morrison points out in his own book, Reshore: How Tariffs Will Bring Our Jobs Home and Revive the American Dream, this collapse coincided with the beginning of America’s chronic trade deficit, which further undermined workers, causing mass unemployment and lower wages. 1973 was the peak of the median wage in real terms. For American workers, it has been downhill for half of a century.
Manufacturers became desperate in the face of their declining financial position. Workforces were cut, pay was cut, and working conditions declined, as did investment in maintenance and quality assurance. Accordingly, union power in the Northern manufacturing states steadily grew.
In the case of Delany, the Teamsters Union, having failed to generate sufficient pro-union sentiment among the company’s cadre of workers, shifted strategy to disrupting shipment of its goods. In response, Delany looked to relocate to the South, with its friendlier labor climate and lower production costs. A local Teamster boss publicly boasted to company president Jack Delany that he wouldn’t “get even one paper clip out of this building,” and posted toughs outside the factory to enforce the threat. But in a legendary exploit, Delany managed to get its heavy machinery through underground tunnels, before hiring a Roanoke, Virginia-based shipping company (because union control of the area was so ironclad) to move the equipment out in the middle of the night. The destination: Charlottesville, Virginia.
“If only he knew that I had the last box of paper clips in my jacket pocket that day,” Jack later recalled. At the time, Teamster President Jimmy Hoffa was serving a thirteen-year prison sentence for jury tampering and wire fraud at the Lewisburg, Pennsylvania Federal Penitentiary, a facility with Delany valves. The office joke became that: “Hoffa had to stare at a Delany valve every time he took a piss.”
A few months ago, I reached out to Mike Farrish, one of Delany’s longest tenured employees, to learn the history that my dad never taught me. We met for lunch at the iconic Charlottesville establishment, El Puerto. A self-proclaimed country boy from Buckingham County, Farrish began his career with Delany Flush Valves in 1974 in the tool room, at $2.50 an hour. The pay wasn’t much even then, but the company offered him something far more important: a chance to climb the ladder and make it a career he could be proud of.
The company invested in his future by paying for his metal trade certification. By then, Delany’s Charlottesville plant was employing 50 workers, and producing about 400 flush valves a day. When, two decades later, Delany developed the first 1.6-gallon-per-flush valve that included an adjustable regulator (enabling the contractor to adjust the water flow on site and the first battery-operated sensor valve), business increased even more. By the mid-90’s the company was employing over 75 workers, and orders were beyond the plant’s capacity. The firm outsourced work to nearby companies, Shenandoah Valley-based Virginia Metalcrafters and Cerro Fabricated Products, known for manufacturing high-quality brass, iron, and other metal reproductions for historical sites, including Colonial Williamsburg.
But the boom was not to last. In the early 1990s, Zurn Plumbing entered the flush valve market. Zurn was the first company to offshore their flush valve production to China. They had the resources for their valve division to be a loss leader while the company increased market share. Zurn’s goal was to put Delany out of business. And that’s exactly what they did.
Many date the beginning of the offshoring of American manufacturing to China joining the World Trade Organization in 2001. But the trend really began in 1979 when President Carter granted China Most-Favored-Nation-Status, dramatically reducing the trade barriers and, even more importantly, the tariffs, between the United States and China. President Reagan renewed China’s most favored nation status every year of his administration. The “race to the bottom” had begun. Many other industries were already feeling the effects and it was only a matter of time before American flush valve manufacturing became a victim.
Zurn’s best-selling valve was virtually a carbon copy of Sloan’s (the market leader) bestselling valve, the Regal. Zurn priced its valve at $32, while Delany priced its hallmark valve, the Flushboy, at $65, which was Delany’s breakeven point. It didn’t matter that Delany used higher quality fittings or that Delany’s was the only valve that could be manually adjusted in the field. All that mattered was the price. As sales began dwindling, Delany was backed into a corner. In desperation, they matched Zurn’s price of $32. Farrish asked my dad how the math was possibly going to work and was told they had no choice. They hoped to make up the differe
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