[Boatanchors] [Milsurplus] [BoatAnchors] Mackay Marine Mystery

[Jbrannig at verizon.net]

A good read from that period

"Welcome to Our Conglomerate--You're Fired! "

by Isadore Barmash

He covers ITT, LTV and Collins radio

Jim

-----Original Message----- 
From: Robert Nickels
Sent: Monday, January 12, 2015 11:00 AM
To: boatanchors at mailman.qth.net
Subject: Re: [Boatanchors] [Milsurplus] [BoatAnchors] Mackay Marine Mystery

On 1/12/2015 12:17 AM, Richard Knoppow wrote:
> mergers on the philosophy that you must diversify or die.
That was the in-vogue operating practice for the movers and shakers of
the 1950s.  A former boss loved telling stories of his mentor, Jim Ling,
who turned his Dallas electrical contracting business into America's
largest conglomerate -  Ling-Temco-Vought  (LTV) - whose holdings
included Altec, Vought Aircraft, Branniff Airlines, Wilson (sporting
goods and meat),  and National Car Rental.   As long as the target
company's earnings exceeded the interest on the loan or the company's
price/earnings ratio was less than that of LTV's stock, the conglomerate
became more profitable overall.   Market analysis wasn't as
sophisticated back then, and there seemed to be no limit to growth -
until investors realize the companies weren't growing any faster than
they would have on their own.  After divesting major chunks, LTV wound
up operations as a steel company in bankruptcy court in 2000.

My old boss's fall from the heights of Park Avenue took only a year or
two, after he merged the company he'd started above the Woolworths
dimestore,  Dale Electronics, with the Lionel Toy and Train Corp. of
NYC.   He was fired as President after a year and a year after that the
stock he'd been paid with was basically worthless.   But he started
over, and his legacy company is still a leader in resistor manufacturing
and became the cornerstone acquisition of the Vishay passive component
empire.

Conglomerates still exist and perform well, but for many entrepreneurs
the advice "stick to your knitting" has been good advice.

73, Bob W9RAN
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