Word: goodrich
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...month struggle by Chicago's Northwest Industries to take over the B.F. Goodrich Co. has long since won wide recognition as a classic display of corporate attack and counterattack. The aftermath of Northwest's unsuccessful campaign, which ended last summer, is becoming a textbook case in its own right. Keenly sensitive to Northwest's charges of poor management performance, the Akron rubber company has undergone an extensive purge in its white-collar ranks (TIME, Dec. 26). Now Northwest is beginning to show some managerial fissures...
After unsuccessful passes at Swift & Co. and Home Insurance, the ambitious Newman persuaded Heineman to assault Goodrich. The adventure turned out to be costly as well as unavailing. Since it reached a high of 61 last year, Northwest stock has fallen to 13, a drop of 79%. The plunge has cost Newman a personal paper loss of $6.6 million. Why leave, with so much at stake in Northwest? Newman said that he wanted to take advantage of some "tantalizing situations" outside Northwest, but insiders say that he was simply "not having much fun" at the company after things turned sour...
Paper Losses. Northwest's current situation is more agonizing than tantalizing. The company still has its 16% interest in Goodrich, but all it has to show so far for that is a sizable paper loss. Legal fees and other campaign costs drained away another $3 million. A strike at Northwest's Lone Star Steel Co. and continuing problems-short hauls, frustrated merger plans-at its Chicago & North Western Railway have also helped to cripple profits. In the first nine months of the year, pretax earnings fell to $11.6 million-a 72% decline...
That Uncertain Feeling. One way that Goodrich management found to improve performance was to thin out the 18,000 executive, professional and other white-collar personnel by attrition, early retirement and outright firings in Akron. Robert Sausaman, 48, an equipment buyer, recalls that, after 17 years with the company, he was given two weeks' notice and "my bare entitlement" by way of a pension. Robert L. Coon, 56, a staff photographer for 25 years, was given the option of $10,000 in severance pay or a $100-a-month pension. He picked the pension. One executive was offered...
...Goodrich made no announcement of the firings and Akron's Beacon Journal neglected to report the biggest potential story in town. The company secrecy was deliberate policy, and so was the uncertainty created among those who stayed. "I hope some of them will look into their performance and realize they could do better," says J. Wade Miller, vice president for personnel and organization. But there could be less favorable results for Goodrich, and not only in the loss of local good will in a community that backed the company in its struggle with Northwest. One group of white-collar...