Out from under Strömberg and into the great depression
KONE produced five elevators in 1919, of which only one had a KONE hoisting machine. Many people doubted KONE’s ability to produce a quality Finnish elevator, but the first deliveries convinced the local construction industry that KONE elevators were at least as good as the foreign competition.
With post-war elevator demand unable to sustain the company, KONE turned to producing consumer products such as carbide lamps, coffee mills and blades for ice hockey skates. By 1924, however, the economy was recovering, and KONE was selling and installing 100 elevators a year. Its parent company, Strömberg, on the other hand, was facing bankruptcy. Strömberg had borrowed heavily for post-war expansion but neglected R&D, enabling foreign competitors employing new technologies to win over many of its customers.
The bank appointed a businessman, Harald Herlin, to settle the matter. He noticed that Strömberg’s KONE subsidiary was profitable and worth slightly more than its parent company’s debt. His surprise offer to buy KONE was accepted, enabling Strömberg to repay its loan, and KONE became an independent company with Harald Herlin as its chairman and principle owner.
Badly needing to enlarge its production facilities, the company moved into a former margarine factory on Haapaniemi Street in 1927, enabling production to jump that year to 200 elevators and 320 in 1928. That same year Harald Herlin’s son, Heikki, joined KONE’s board. After studying and working in Finland, Germany and the United States, the 31-year-old engineer became KONE’s managing director in 1932. By then, the Great Depression had cut sales back to levels not seen since Harald Herlin bought the company in 1924. His son was going to have to learn the business the hard way.