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...whole performance has raised questions about the competence of some ITT executives, shaken the reputations of some Nixon Administration officials, and hurt the nation's political relations with certain foreign governments. In the U.S., the ITT controversy has dragged out the confirmation of Richard Kleindienst as Attorney General-because as Deputy Attorney General he approved the antitrust settlement-and handed Democrats an easy opportunity to portray the Nixon Administration as too readily swayed by giant corporations. More generally, it has reopened an old debate about whether business bigness, particularly conglomerate bigness, is bad. Business men around the U.S. complain...
...ultimate effects on ITT itself are not yet clear. The company seems as powerful a multinational force as ever. It boasts more than 200 primary divisions and subsidiaries and countless sub-subsidiaries*on every continent, which among other things operate the hot line between Washington and Moscow, manufacture telephones in Australia, Brazil and Norway, and run the Hamilton mutual funds in the U.S. A consumer who became annoyed with ITT would have a difficult time boycotting it: he could not rent an Avis car, buy a Levitt house, sleep in a Sheraton hotel, park in an APCOA garage, use Scott...
...ITT seems vulnerable in some other ways. In the past, it has grown largely by acquisition. Between 1964 and mid-1971, it absorbed no fewer than 98 companies. The antitrust settlement now effectively bars ITT from acquiring any U.S. company with annual sales of $100 million or more, and the bad publicity that has lately befallen ITT might impose further limits. ITT has made almost all its past acquisitions in exchange for stock. The recent controversies have driven down the price of its shares from an early 1972 high of $64.50 to $55.75 last week, making it less attractive...
Does this high-pressure, inbred management system work? In terms of the figures that Geneen loves, it certainly seems to work splendidly. Between 1959 and 1971, ITT's revenues multiplied almost ten times, to $7.3 billion, and operating profits 14 times. (Earnings per share showed a much smaller rise because ITT has issued so much new stock to pay for acquisitions.) But in the recent intense re-examination of ITT, financial experts are beginning to ask some probing questions to which the figures disclose no answers...
...question is how ITT will fare after the 62-year-old Geneen retires. That will happen three years from now, unless Geneen exempts himself from a general company rule specifying retirement at 65. There is no clear successor. Some former ITT executives express the heretical thought that the company is too big and complex for anyone else to manage effectively. Certainly the organization contains the potential for turning into an unwieldy bureaucracy. The system that Geneen has crafted so carefully might well need someone with his extremely rare blend of drive, decisiveness and astonishing capacity to absorb figures...