HISTORY

History of Wellco Enterprises, Inc.

The Company presently known as Wellco Enterprises, Inc. began operations in Waynesville, NC in 1941 under its original name, Wellco Shoe Corporation.

By way of background, the history of Wellco goes back to the nineteenth century when the grandfather of the founding partners started the family's first shoe factory in Germany.  In the early 1930's, the Gerrman company developed the first practical method for molding and attaching a rubber sole to a shoe upper in a single vulcanizing operation.  The German company had the foresight to patent this technology worldwide.

With the advent of Adolf Hitler's Nazi regime, the German Jewish prinicpals of Wellco's ancestor company were literally dispossessed of virtually all their assets and fled to Belgium.  There, they founded a partnership, known as Ro-Ka, which set about the business of licensing and disseminating above-mentioned technology around the world.  In 1939 or 1940 the partnership determined to delegate one of its members, Heinz Rollman, to the USA, to explore the potential for their manufacturing methods in this country.  With the clouds of World War II rapidly spreading across Europe, Heinz soon determined that the time had come to find a new home for the partnership's endeavors on this side of the Atlantic, instead of following their previous practice of licensing their know-how to an existing local manufacturer.

Patented know-how was Heinz Rollman's principal asset when he came to the USA; money was not!  Consequently, he determined to seek an association with an established manufacturer of rubber products to supply the rubber compounds needed to manufacture footwear under the patented technology at his command, in order to limit the amount of capital needed to start a new shoe factory.  In his search, he contacted Dayton Tire and Rubber Company, then headed by the legendary Mr. A. L. Freedlander.  Dayton happened to have plans at that time to start a plant in the South for the principal purpose of supplying mechanical rubber goods to the textile industry.  Thus, Mr. Freedlander invited Heinz Rollman to join him on an exploratory visit to Charlotte, NC, where Dayton had a property.  They reportedly found this property unsuitable, because of the lack of a suitable source of cooling water for the rubber mills.  A member of the Belk family who had a home at Lake Junaluska directed Messrs. Freedlander and Rollman to Haywood County, where ample free-flowing streams would suitably cool the mills.  Soon thereafter, Messrs. Freelander and Rollman arrived in Waynesville and made contact with local leaders, including Jonathan Woody, President of First National Bank (which later became part of First Union and today Wachovia Bank).  This resulted in the acquisition by Dayton Rubber of the property now known as the Dayco site and the construction of the plant, which included a wing on Hyatt Creek Road that became known as the "Wellco Wing" and was intended from the start for lease to Mr. Rollman's proposed shoe plant.  Thus, Wellco Shoe Corporation began operations at that site in 1941, after a period of training employees at a Frog Leevel location and, during Summer vacation, in the vocational building at Waynesville Township High School.

It should be mentioned that, despite the opportunity to leases space and purchase compounded rubber from Dayton Tire and Rubber Co., Heinz Rollman still needed additional capital to fund his venture.  Consequently, he entered into agreements with other investors that included Leo Weill, a resident of Waynesville, and Otto Festmann, a resident of Asheville at the time.  Both of these individuals were active in the original management of Wellco; Mr. Weill was, in fact, the Company's first President.  He resided in Waynesville until his death and was a member of Waynesville Rotary Club.

Although not 100% owners of Wellco, the partnership represented by Heinz Rollman was the controlling shareholder, and, over the period of the next five years after 1941, the remaining partners were all able to relocate their families in Haywood County, in some cases after surviving the rigors of Nazi occupation in France by hiding out under assumed identity.  The four partners were two sets of brothers, who were first cousins to one another.  In addition to Heinz Rollman, who was the "first among equals," despite the fact that he was the youngest of the four, they included Ernest Rollman and Walter and Curt Kaufman.  Three generations of descendants of Walter Kaufman continue to reside in Haywood County, and descendants of Heinz Rollman reside presently in Buncombe County and Upstate South Carolina.

Early on, the principals of Wellco founded another company, known as Ro-Search Inc., which specialized in licensing the partners' patented technology to other manufacturers around the world and in manufacturing the specialized molds and presses required for the use of their processes.  Ro-Search still survives today in Waynesville as a subsidiary of Wellco, which eventually changed its name to Wellco-Ro-Search Industries, Inc.  A further name change took place in the early 1960's to the present designation, Wellco Enterprises, Inc.

When Wellco began manufacturing, it specialized in light-weight slippers and casual footwear with sponge rubber soles.  Except for a brief time, during World War II when the use of rubber was restricted to defense purposes, Wellco continued to manufacture and market such footwear, trademarked Wellco Foamtreads, until approximately 1985.  Wellco had as many as thrity exclusive salesmen calling on independent retailers and department stores around the country and established a network of several thousand customers, who touted the merits and comfort of Wellco slippers and casuals for children and adults.  In addition, however, Heinz Rollman was convinced of the merits of Ro-Search's patented technology for the manufacture of heavy duty footwear, such as military boots, and he began in the early 1950's to call this technology to the attention of US Army Natick Laboratories in Massachusetts.  In 1965, as a result of unsatisfactory performance of previous Army combat footwear in the jungles of Viet Nam, the Army adopted Wellco-Ro-Search technology for the manufacture of its hot-weather boots, and this product thus became known as the "Viet Nam Boot."  Later the technology used to manufacture the Viet Nam Boot ws adopted for all Army combat footwear.  Wellco became a prominent supplier of such footwear to the US Military in 1965, and the remainder of the Army's needs were supplied for a number of years by three other companies, all of them using Ro-Search-supplied molds and presses, as well as technical advice.  To this day, the technology used to manufacture military combat boots, although significantly modified and no longer covered by current patents, retains prominent features of the original "Viet Nam Boot."

By the mid 1950's Wellco had grown to more than five hundred employees at its original location in the Dayton Rubber complex and at an additional location in Hazelwood.  Eventually, the csompany relocated all operations to the present site at Westwood Circle and Georgia Avenue in the Hazelwood community of Waynesville.  Parenthetically, the association between Wellco and Dayco did not quite end with the relocation of the shoe factory.  In the late 1960's Messrs Freedlander and Heinz Rollman, by then both retired but still active as consultants and on the Boards of Directors of their respective Companies, conceived of a plan for Dayco to acquire Wellco Enterprises.  That plan did not survive the due diligence of Dayco accountants and others, who mistakenly concluded that Wellco could not long survive in the event it lost its military business.  It is ironic that Wellco has thus retained its autonomy and has long outlived Dayco in Haywood County.

As early as 1956, Wellco founded its manufacturing subsidiary in Aguadilla, Puerto Rico under the original name of Moda Shoe Corporation.  The US Commonwealth of Puerto Rico had just initiated its Operation Bootstrap at the time, offering some very desirable tax and cost incentives.  In 1963 a second Puerto Rican subsidiary was founded under the name of Kaufman Shoe Company.  The two were later merged as Mo-Ka Shoe Corporation, which today is Wellco's primary manufacturing entity.  For a brief time, in the late 50's and early 60's, Wellco also operated a plant in the Caribbean nation of Jamaica.

In March 1964, a disastrous fire gutted the old rock apple warehouse that served as Wellco's main manufacturing and office facility in Hazelwood.  (Fortunately, the finished goods warehouse and the Ro-Search building were saved).  Production in Puerto Rico was immediately ramped up to seven days a week, and Haywood County operations resumed within days in trailers and other makeshift quarters, while a new building was erected in record time on the site of the destruction.  Dedication of the new office and manufacturing facilities took place less than four months after the fire.  For many weeks before that event, employees were already manufacturing shoes in parts of the new building, while walls were still being erected around them.

True to its heritage as a developer of footwear manufacturing technology, Wellco's subsidiary Ro-Search Inc., perfected and patented in 1957 a new technique for molding and attaching a rubber sole to a welted upper.  This was known as "Process 82," to indicate that it was considered to be twenty five years ahead of its time.  In addition to licensing Process 82 worldwide, Wellco co-founded in 1963 a company known as Hi-Pals Footwear Inc. in Darien, Georgia, dedicated to manufacturing rugged Process 82 footwear for children and youth, and, subsequently also men's work shoes.  The Darien factory was sold several years later, but Wellco continued to manufacture Hi Pals boots in Waynesville until the mid 1980's.

Unfortunately, like many labor intensive industries, the shoe business became dominated by imports from low-cost producers in the Far East and elsewhere.  This process accelerated to the point where manufacturing Foamtread slippers and casuals and Hi Pals boots in Waynesvlle and in Puerto Rico was no longer competitive in the marketplace.  For this reason, Wellco had to make the decision in 1985 to discontinue manufacturing these two brands and to concentrate on its military footwear production, which, by that time, had become an important component of the Company's business.  Under US law, military apparel (including footwear) purchased by the Department of Defense must be produced under the US flag, so long as producers are available.  This gave a degree of protection from the Far East import invasion to a small group of rugged footwear manufacturers, including Wellco.  In addition to producing footwear for the US government, Wellco today produces and markets similar and related products for sale in the commercial marketplace to sportsmen, law enforcement and other uniformed personnel, etc.  It is noteworthy that the import penetration of the US commercial footwear market has today reached a level in excess of 95%, so that only an extremely limited selection of specialized items can be successfully sold by a US producer.  Thanks to its basic business for the Military, Wellco feels that it can be a viable competitor by marketing such items commercially from both domestic and foreign sources.

Initially, the uppers for Wellco's military combat boots were cut and stiched in Puerto Rico, and these uppers were then shipped to Waynesville for lasting (forming), and sole attachment.  Unfortunately, even though protected from the flood of imports, the military footwear business has become extremely competitive, to the point that Wellco could no longer successfully bid on government procurements with major components of its manufacturing in two separate locations.  Therefore, the decision had to be made in 1999 to relocate the majority of the lasting and sole attachment operations from Waynesville to an expanded location in Puerto Rico, together with the upper making.

Today, Waynesville continues to be the site of Wellco's home office, its distribution warehouses and its Ro-Search machine shop and footwear development operations, as well as some specialized footwear bottoming production, featuring a modern polyurethane direct injection process.

Just like Wellco's products and manufacturing operations, the Company's ownership and management structure have evolved over the sixty five years since its founding.  The members of the partnership which initially owned the majority of Wellco's stock had very few assets outside the Company.  Therefore, in order to achieve some financial stability for their families, they determined in 1961 to "go public," by offering the Company's shares on the stock market.  The first public offering took place in December 1961, and the first Report to Shareholders covered the period from July 1 to December 31, 1961.  Net sales during that six-month period were approximately $2.5 million.  This compares with annual net sales between $40 and $50 million today. 

Heinz Rollman and his partners, Ernest Rollman and Walter and Curt Kaufman, actively managed Wellco unitl 1968, when Heinz elected to retire and become a Consultant to the Company, soon to be followed by the other partners.  For several years prior to 1968, Horace Auberry, a native of Hayesville, NC and a WCU graduate, and Rolf Kaufman, a graduate of Waynesville Township High School and NC State, had been "groomed" as the successor management team.  At the suggestion of Heinz Rollman, the became "Joint Chief Executive Officers" upon Heinz's retirement, and their titles were decided by a flip of a coin, whereby Horace Auberry became Chariman of the Board and Rolf Kaufman became President of the Company.  This unusual management structure survived successfully until 1996, when Kaufman elected to initiate a gradual process toward retirement, while continuing to work on a part time basis.  At that point, Mr. Auberry became the sole CEO of the Company, and David Lutz, who had joined Wellco as its controller in 1974, became President and Chief Operating Officer.  Upon Horace Auberry's own retirement in 2002, Mr. Lutz was given additional responsibility as Chairman and became Chief Executive Officer.  Mr. Auberry, then Chairman Emeritus, passed away in 2005.  Mr. Kaufman, while now fully retired from active management, continues as ViceChariman of the Board and a Consultant to the Company.  In 2006, Mr. Lutz resigned from his positions as President, Chairman and CEO of the Company.  In February 2006, Mr. George Henson, an independent member of Wellco's Board of Directors, was elected Chairman.  Mr. Henson, a native of Haywood County, had retired from a lifetime management career in the paper industry, serving most recently as President and CEO of Blue Ridge Paper.  In March 2006, Mr. Lee Ferguson, a resident of Knoxville, TN, accepted the responsibility of becoming Wellco's new President and Chief Executive Officer, as well as a member of the Board of Directors.  Mr. Ferguson joined Wellco after serving a number of years in top management positions with manufacturers of apparel and other military gear under contracts with the US Department of Defense.

A great number of persons born and educated in Haywood County have served in highly responsible positions with Wellco throughout its 65 years of existence, including both past and current plant managers; Controller, Treasurer and Chief Financial Officer; supervisors of machine building operations, wawrehousing and distribution, manufacturing departments, as well as managers of sales and administrative functions.  Other prominent WNC residents associated with Wellco included Aaron Prevost, a furniture manufacturer and later Senior Vice President and County Executive for First Union National Bank, who was a member of Wellco's Board for many years.