In 1928 brothers Ben and Ted Grob founded Grob Brothers in their 20 x 20 garage. In 1951 Ted left the business to pursue a different venture, and in 1954 or '55 Grob Brothers was reorganized as Grob, Inc. The company is best known for their line of industrial metal cutting band saws. They also developed technology for cold-rolling gears and splines; they sell the gears and splines and not the machinery for producing them.

      "The petitioner is a partnership, consisting of Benjamin Grob and Theodore Grob, general partners, and Anna Grob, Mavis Grob, and Robert P. Zaun, trustee, limited or special partners, organized under the partnership laws of the State of Wisconsin, with principal offices in the village of Grafton, Ozaukee County, Wisconsin.

      It is engaged in the manufacture, sale, design, invention, and distribution of machine tools, accessories, and allied lines, and in the owning, operating, and managing of real estate. On or about May 31, 1944, the Undersecretary of War of the War Department of the United States made a unilateral determination that $70,000 of the profits realized by the petitioner during its fiscal year ended December 31, 1942, under its contracts and subcontracts subject to renegotiation pursuant to the provisions of section 403 of the Sixth Supplemental National Defense Appropriation Act of 1942 (the Renegotiation Act) were excessive.

The product of the petitioner consists chiefly of metal-cutting hand saws, butt-welders and continuous band filing machines. Such products are primarily used in machine shops and tool and die shops. The products manufactured by the petitioner are the same now as they were at the time of the inception of its business in 1929 and the same in 1942 as they were in 1929.

The petitioner began business in 1928 in West Allis, Wisconsin, and moved to its present site at Grafton, Wisconsin, in 1936. During the period from 1936 to 1942, inclusive, its business was managed and controlled by the same individuals.

      Benjamine Grob completed his work in an engineering school in Switzerland in 1923, when he came to the United States and was employed as a designer by the Allis-Chalmers Manufacturing Co. and A. O. Smith, from that year until 1928. He designed for the Allis-Chalmers Manufacturing Co. special machinery on which patents were obtained.

When Grob started the petitioner's business, the firm made tools and dies for others. He then discovered the need for a continuous motion filing machine, which he designed. In 1930 he developed the open-end band saw and improved it in 1939. He also designed and patented a briquetting machine, a butt-welder, and other special machinery. He designed a machine to file the gas turbine wheel used in the Pontiac Torpedo Plant. The work on one wheel was done by his machine in 27 minutes, whereas it had formerly required 40 hours of skilled labor.

He also designed special tools for use in the petitioner's operations, such as an automatic milling machine, a cut-off machine for filing chains, a sand blast machine, hardening jigs, etc. No other engineering services were hired, or required, by the petitioner except those of Benjamin Grob and his brother, who assisted in all operations.

During the period of inventing, developing, and improving the petitioner's machines it made radical changes therein, resulting in the saving of material and man-hours. Examples of such changes were the substitution of pressed steel for cast iron frames and the use of concrete to fill machine bases instead of cast iron in order to give them weight, reinforcement, and rigidity. In 1942 the petitioner's plant was first set up for, and adapted to, mass production. The average life of the petitioner's band saws and filing machines was over 25 years, since the parts that wear out are quickly replaceable.

      The petitioner services the machines itself. Its machines are designed to accelerate the work of the tool maker.

      In 1936 the petitioner erected its first factory building in Grafton at a cost of about $14,000. Benjamin Grob supervised the work, erected the steel work, and did much of the labor thereon. A second building was constructed in 1931, a third in 1940, and a fourth in 1941. The plant was erected on approximately 4 acres of land and contained over 30,000 feet of floor space. Its value on September 1, 1942, was $150,000. No Government aid was asked or required for the construction of the building, or for any other purpose.

      The partners of the firm left in the business all the money not needed for taxes and living expenses.

      The prices for the petitioner's products were not changed materially during 1942. They were lower than those of the petitioner's nearest competitor, the Do-All Co., of Minneapolis. The competitor's machine was a dual purpose machine which necessitated a mechanical change-over for separate filing and sawing operations, while the petitioner's machines were single purpose machines." (Excerpts from the Reports of the United States Tax Court, Volume 9, pgs. 495-499)

Information Sources

• More information on the history of Grob Inc. can be found on the company's web site.
• Reports of the United States Tax Court, Volume 9, 30 Sept., 1947, pgs. 495-499