Well, one chief executive said to me that the chief executive does not like to lose his manhood. When his company is taken over, he's no longer the prominent man in his industry. He no longer calls the shots, and that's a terrible blow to people who have called the shots.
−James J. Ling
In a retrospective moment last fall, Dallas Entrepreneur James Ling was recalling a trying period in 1961 when he had temporarily been shunted aside as chief executive of his Ling-Temco-Vought, Inc. Conservative bankers had mistrusted the fast-moving Ling and chosen an older man. But Ling wasted little time in winning the bankers over and taking back his job. Last week one of the biggest and certainly the most daring of the conglomerate builders took the terrible blow again−from much the same source. At a four-hour emergency board meeting, called at the insistence of LTV's nervous bankers, Ling stepped down as chairman and chief executive in favor of Robert Stewart III, a corporate rescue expert who is chairman of the First National Bank in Dallas. Ling replaced Clyde Skeen as president of cash-strapped LTV, which had sales last year of $3.75 billion, and the company announced that Ling and Stewart will "share policymaking responsibilities." They are going to need all the policymaking skill they can muster, for rarely has so large a corporation been so close to financial disaster.
The Squeeze Worsens. Jim Ling, to be sure, has been gambling on vast success−or flamboyant failure−ever since 1946, when he began building a tiny electrical-contracting business into a huge conglomerate. He took his greatest risk in 1968 with the purchase of Jones & Laughlin Steel Corp., the sixth largest steel producer in the U.S. Using borrowed money, he paid too much for the company. He bought control for $85 a share, and since then J & L stock has plummeted to $12.75. There was little that Ling could do to stop the slide. A federal antitrust suit barred him from exercising his command.
To meet LTV's heavy interest charges on its $862 million debt, Ling was forced to sell off National Car Rental, Staco, Inc., Wilson Sporting Goods, Allied Radio and Whitehall Electronics, as well as most of the conglomerate's holdings in Computer Technology and some of its stock in Braniff Airways. Last week the cash squeeze got worse when Jones & Laughlin directors voted to omit the quarterly dividend−cutting off $4.2 million in income that LTV could have applied to its debts.