A.O. Smith, a world leader in water technology, which reported record sales in 2023 of $3.9 billion and employs 12,000 people throughout North America, Europe, India and China and operates sales offices in 60 countries, can trace its origins back to one day 150 years ago when Charles Jeremiah “C.J” Smith almost took a sick day.

C.J. emigrated from England in the 1850s and met his wife-to-be, Mercy, on the ship over to America. Mercy convinced C.J. to settle in Milwaukee where he plied his trade as a blacksmith for many years before going to work in a machine shop for the Milwaukee Railroad.

When he left work the day before, however, he’d left behind an expensive product on a lathe, and he didn’t want to leave the work up to an inexperienced machinist to complete. Even though he was sick, he reported for work after all, only to be turned away by the guard at the gate who wouldn’t let him since the workday had already begun.

“So he went home and told Mercy that he didn’t think he could continue working for a place that didn’t respect his craftsmanship,” says David Chisolm, vice president and general manager of APCOM and Water Systems.

And with that commitment, C.J. opened C.J. Smith Machinist in 1874, and started out making parts for baby carriages. Later, C.J. turned his attention to wheels of a different sort when his company figured out how to take sheet metal and form it into steel tube to make bicycle frames. By 1895, the company, then known as C.J. Smith & Sons, was the largest bicycle parts maker not just in the U.S., but the world.

Around the same time, C.J.’s son, Arthur O. Smith, began tinkering with how to improve a product that was the bicycle’s likely replacement – the automobile. After a couple of years of R&D, A.O. developed the world’s first pressed steel automobile frame, a lighter yet stronger and more cost-effective alternative to the iron frames of the day.

Word spread about the innovation, and soon none other than Henry Ford, himself, came calling in 1906 and wanted to know if the company could produce 10,000 frames in four months for his Model N vehicles.

“As the story goes, the company was making just 10 frames a day at the time and A.O. had no idea how to make that many in that amount of time,” Chisolm adds. “But he still told Ford, ‘That’s what we’re here for.’ ”

In order to fill the Ford order, the company (by the way, A.O. incorporated the business in 1904, hence, the name we all know today) had to increase its production without adding time-robbing plant expansions and untrained employees. As a result, A.O. looked for ways to increase efficiency through technological improvements. He and his team of engineers retooled existing presses to produce two corresponding halves of an auto frame simultaneously and arranged the presses to form a continuous assembly line.

Innovation Decade After Decade

“Innovation and engineering are in our company’s DNA,” says Arthur O. Smith IV, product manager, residential heat pump water heaters and the great-great-great-great-grandson of C.J. “Our founders would look for big problems that represented great opportunities in the marketplace. And then they solve those big problems in big ways. That’s really our history and what we continue to do to this day.”

A.O.’s son Lloyd Raymond “Ray” Smith later perfected this “can-do” spirit and in 1921 opened the Mechanical Marvel. Instead of needing four months to make 10,000 frames, the new factory could make 10,000 frames a day. Both A.O. and Ray were inducted in the Automotive Hall of Fame in 1988 for their efforts, and the company remained in the automotive market for almost 100 years, commanding at one point a 60 percent share and ultimately producing more than 100 million passenger automobile frames and 50 million truck frames.

From humble beginnings as a small machine shop located in Milwaukee’s Walker’s Point neighborhood, to its growth into a global corporation, A.O. Smith was one of the first American businesses to put significant resources into research and development, constantly seeking out new technologies and their practical applications for new products and services. 

Throughout the years, the company would continue to reinvent itself and expanded and diversified into and out of many other businesses before starting up its pioneering water heater manufacturing in the 1930s and would later put 100 percent of its corporate attention into water heaters and water treatment (and hydronic heating, for that matter) by the turn of this century.

But it’s clear to see how early victories that may seem to have nothing to do with water heaters still paved the way for much of what we recognize as the company today.

For example, in tandem with its innovations in the automobile market, company engineers had developed a coated welding rod, an electrode spirally wrapped with paper, soaked in sodium silicate, and then baked. This was a breakthrough welding technology that influenced the development of arc welding as a mass-production method in 1918.

Through further R&D, the company developed new ways of welding metal, including a process that led to an economical and more productive method of fabricating pipe and high-pressure vessels. These advancements nurtured the growth of the country’s original oil and natural gas industries.

“A lot of people don’t know that we were the largest consumer of steel in the U.S. in the 1920s and 1930s,” Chisolm adds.

Endless conveyors transport water heater component parts through the vast Kankakee works. Here, six assembly lines have produced more glass-lined water heaters than all other.makers combined- more than 3,500,000 to date. No manufacturer has matched these extraordinary facilities, or duplicated Smith 's unparalleled experience in fusing glass to steel.

Beer Saves The Day

By the 1930s, the Great Depression put the company’s automobile market and the rest of the U.S. economy in neutral. But one bright spot of those desperate times, particularly considering Milwaukee’s beer brewing heritage, was the repeal of Prohibition. Taking what they had learned to fabricate large tanks, engineers expanded on earlier research in the process of fusing glass to steel. And in 1933, A.O. Smith introduced the first single-piece glass-lined brewery tank. Over the next 32 years, the company produced more than 11,000 glass-lined brewery tanks.

“The glass lining made the tanks more durable, eliminating any corrosion on the inside of the tanks that would affect the taste of the beer,” Chisolm explains. “And from there, it was a short pivot to using the same patented glass-lining process to manufacturing residential water heaters.”

Residential water heaters did exist at the time, but until the company patented the process of glass-lining a water heater tank in 1936, most units were cumbersome, custom-built and expensive equipment made with little if any uniformity from various metals that corroded easily and weren’t built to last.

“It was very much a niche market and not very accessible to the broader public,” Smith adds. “The innovation of glass-lined tanks significantly improved the lifespan and reliability of water heaters and helped make hot water an affordable convenience for almost any American family.”

The company quickly set about mass producing water heaters in 1939, and the rest is water heater history until, well, world history got in the way as the country entered WWII.

Like many other American manufacturers of the time, A.O. Smith put its routine production on hold and retooled to help fight the war. By 1945, it had built 4.5 million bombs; 16,750 sets of landing gear; and 46,700 propeller blades.

After the war, the company built a 400,000-square-foot residential water heater plant in 1947 in Kankakee, Illinois, with most of these first water heaters sold by Sears under its Kenmore brand. Volume at the plant doubled twice before 1950. Monthly production approached 50,000 units by the mid-1950s.

A.O. Smith also entered the commercial water heater market in 1948 through the acquisition of Toledo, Ohio-based Burkay Co., leading to the first glass-lined commercial water heater, the Burkay B-65, which is still manufactured at the company’s South Carolina plant.

Growth Through Acquisitions

While the company continued to diversify into other industries, A.O. Smith also expanded its water heater business. In the early-1960s, for example, the company opened a commercial water heater plant in Ontario, Canada, its first water heater factory outside the U.S. In 1972, the company opened its first European operation in the Netherlands. Originally a sales office, the location eventually expanded to include assembly and manufacturing. And in the 1990s, A.O. Smith entered the residential water heater market in China.

By the late-1990s and into the 2000s, the company was winding down its legendary automotive operations as well as its electric motors business, that powered everything from air conditioners, refrigerators, furnaces, garage door openers, swimming pools and hot tubs, and at one point, accounted for two-thirds of company revenue.

Proceeds from the sale of these operations, set the stage for much bigger things to come for its water heater business.

The company made one of its biggest moves in 2001, for example, acquiring State Water Heaters, doubling the size of the company’s water heater business and expanding its product lines. The deal also included APCOM, a subsidiary that manufactures elements, thermostats and drain valves enabling the company to enter the water heater component business for the first time.

Five years later, the company made its biggest acquisition in its long history by purchasing Canadian water heater and building products manufacturer, GSW/American Water Co. The addition of the American; Whirlpool; GSW and John Wood brands made A.O. Smith the industry leader in water heaters in North America. 

By 2010, A.O. Smith and Takagi Industrial Co. entered into an agreement under which A.O. Smith would acquire Takagi’s North American operations as part of a joint venture to market and make tankless water heaters in North America.

The acquisition of Giant Water Heaters followed in 2021.

During this time, the company also first entered the water purification industry with acquisitions in China, India and the U.S. (While our story mostly features water heaters, the company rounded out its “water technology” philosophy by acquiring hydronic heating manufacturer Lochinvar Corp. in 2011.)

A decade after launching its strategy to become a global water technology company, A.O. Smith was included in the Harvard Business Review’s “Top 20 Business Transformations of the Last Decade.”

A Look Ahead

In recent years, A.O. Smith has shifted its focus again to water heating technology that supports the nation-wide push for decarbonization. With this shift, the company has invested heavily in developing heat pump water heaters, but still brings along a long history of energy efficiency earned well before everyone made “electrification” a catch phrase.

“One of the major milestones for us on the commercial water heater side was bringing out our Cyclone product family,” Chisolm adds, “and being an industry leader on high-efficiency gas water heaters.”

The Cyclone line was launched in 1996 and the line was one of the first commercial water heaters to earn the ENERGY STAR certification from the EPA. For the past six years, in fact, A.O. Smith has been recognized as an ENERGY STAR Partner of the Year.

Since a 2026 DOE ruling will eliminate the manufacturing of all non-condensing gas water heater products, A.O. Smith has expanded the manufacturing capability at its South Carolina plant to turn out more Cyclone products. 

While fossil-fueled condensing products can still play a needed role to decarbonization plans, the company has also pushed ahead with a number of new heat pump products ever since launching its first heat pump water heater 14 years ago.

“I started in this role in 2015,” Smith says, “But in the past three years we’ve really focused on the electric side since there’s a great opportunity for A.O. Smith to continue to innovate like it always has.”

While heat pumps water heaters, themselves, are not new, Smith says it’s new technology for many plumbing contractors.

“So we certainly try to make them feel confident to install one through training and support,” Smith adds. “And we also look to make our products very easy to install, too. Our latest heat pump water heater features a simple 12-volt plug to provide electric power.”

That would be the Voltex family that provides that hassle-free transition from gas to electric water heaters. The Voltex 120V model can be plugged directly into a shared circuit wall outlet, ensuring a simplified installation process. In related news, the Voltex line also includes the MAX, a residential heat pump model that the company says provides 40% percent more hot water that more closely matches the performance of a traditional gas water heater, as well as the AL, an industry first heat pump water heater that incorporates leak detection.

“Heat pump water heaters are one of the best kept secrets in the water heater game,” Smith says. “While they may cost more upfront than a standard electric water heater, the annual cost for running a heat pump water heater will be hundreds of dollars less.”

We’ll close with a closer look at the new Adapt, since it’s a great representation of a product created with A.O. Smith’s water technology thinking.

The Adapt is the first tankless water heater designed and manufactured entirely by A.O. Smith. To enhance installation flexibility, the Adapt line offers 2- and 3-inch dual pipe venting, ½- and ¾-inch gas line options and universal indoor/outdoor installation. A.O. Smith designed the units so they can be converted from natural gas to liquid propane in the field with an included kit. Plumbers now have a unit that conforms on the spot to fit their exact needs, no matter the install location, fuel type or existing venting.

But inside, the Adapt features patented integrated scale prevention technology that’s a big advantage for the homeowner. The technology inhibits scale build-up and corrosion to extend the life of the unit up to three times longer.

“A majority of the U.S. has hard water,” Chisolm explains. “Hard water and tankless units do not get along well. If you don’t maintain a tankless water heater, there will be scale buildup on the coils inside and at some point the water heater will stop working.”

So thanks to the company’s expertise in water heating and water treatment, “we were able to build a tankless water heater from the ground up integrating all the features that our trade partners want with integrated scale protection that is designed for the U.S market,” Chisolm adds. “No one else in the industry is equipped to do that because our knowledge around water treatment and water heating gives us a unique position to develop this product.”