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After taking over from Geneen in 1980, Chairman Rand Araskog tentatively began to shed some of the conglomerate's less profitable divisions; last week he announced that ITT was going on the corporate equivalent of a crash diet. In the coming months, it plans to sell more than a dozen subsidiaries with assets of $1.7 billion. That will be a 12% slash in the company's current assets of $14.1 billion. Officials disclosed only a partial list of the units for sale. They include Eason Oil, the Bobbs-Merrill publishing house and O.M. Scott & Sons, which makes Turf Builder lawn...
...ITT's divestiture plan is the most dramatic evidence so far that the golden days of corporate empire building are fading. Several other conglomerates are pursuing similar slim-down programs. Since 1983, Gulf & Western Industries has unloaded 46 companies, including its sugar and hotel businesses. In 1984, Avco got out of real estate and stopped making industrial lasers and farm equipment. R.J. Reynolds last year decided to focus once again on consumer products such as cigarettes and soft drinks and sold its shipping and energy businesses...
...ITT, in particular, is under attack by Irwin Jacobs, a Minneapolis investor whose threats to take over companies and then dismantle them have earned him the nickname "Irv the Liquidator." Jacobs has bought an estimated 2% of ITT's stock and wants to break up the company. The stock now sells for only about $32 per share, and analysts estimate that stockholders could get up to $60 per share if all the parts of ITT were sold separately. Says Jacobs: "ITT's management has created such a monster of overhead in its operations that something's got to happen...
That "monster" was largely the creation of Geneen, who became ITT's president in 1959 and chairman in 1964. He took what was basically a telecommunications company and transformed it into a vast empire that Author Anthony Sampson dubbed the Sovereign State of ITT. Says Felix Rohatyn, who as an investment banker with Lazard Freres helped put ITT together: "Under Harold Geneen, ITT was a company that essentially knew no limits. He thought anything was manageable." The result was a corporation that in 1979 had 370,000 employees in more than 100 countries. Among its multitude of ventures, ITT...
...decision to streamline ITT was a long time coming, partly because Geneen was a long time going. He turned 65 in 1975 but was reluctant to retire. Staying on as chairman, he installed an heir apparent, Lyman Hamilton, as % chief executive officer in 1978. But after Hamilton started planning a big reorganization, Geneen sacked...