Business: House by Reynolds

Late last year Reynolds Metals Co., world’s biggest maker of metal foils, bought a large advance supply of aluminum for some $3,000,000 from Aluminum Co. of America. At that time no one knew precisely why the company was thus lofting its inventory more than 50%. Last spring when Reynolds Metals raised $5,000,000 through new financing (TIME, May 6), no one knew why working capital was being doubled except President Richard Samuel Reynolds who remarked laconically: “We have a number of new developments which might surpass the volume of our metallic foil business.” Last week these additions to inventory and working capital were fully explained when Reynolds Metals, having launched two new companies, plunged into the building business.

Portly, sales-minded Richard Reynolds, nephew of Winston-Salem’s late Tobacco-man Richard Joshua Reynolds, arrived at the building business by the devious route of tin foil for tobacco and the Eskimo Pie, wrappings and labels for ham, candy boxes, ginger ale bottles, other fast-selling packaged products. Few years ago he made the discovery that the foil which wraps an Eskimo Pie can also be used to insulate a house. It was really no discovery at all because the Germans had long used shiny foil for insulation because of its high reflective power. Foilman Reynolds set up a building division. When it boosted sales of aluminum insulating foil from almost nothing to $300,000 in three years, he needed no persuasion to diversify his products, march deeper into the building business.

Shrewdly Foilman Reynolds planted himself halfway between oldtime builders who upheld the traditional methods of constructing a house and prefabricators who insist that all homes should be produced like Fords. He believed in standardization and mass production of parts but not of the complete structure. Through Reynolds Corp., one of two new subsidiaries, Reynolds Metals will market the basic structural and mechanical equipment for “The House with the Silver Lining,” but will have no stock homes to sell. Through the other subsidiary, Reynolds Fiscal Corp., it will finance houses “when local financing is not available.”

Last week 25 Reynolds-system houses were being built in New York and New Jersey. Under the Reynolds system a prospective home builder outlines his ideas to an architect who sketches the plans. These are forwarded to Reynolds Corp. which draws up specifications for Reynolds fireproof framing, structural flooring, lathing, metal foil insulation, heating, airconditioning, plumbing—approximately 80%, of the mechanical and structural parts that go into a house. The rest —hardware, lighting fixtures, floor covering, wall covering, etc.—the builder buys for himself. All Reynolds equipment is sold through local dealers. The company claims that a Reynolds house, complete with airconditioning, will cost the builder only about 8%, more than a wooden frame house of the same cubic inch content. Chief advantage of the Reynolds plan is that a home builder has the coordinated services of a dozen or more structural experts, does not have to worry whether the right proportion of his building dollar is going to roofing, plumbing, frames, flooring, wall covering or fixtures.