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> To increase its number of shares outstanding and thus raise the total that Heineman would have to win, Goodrich made a deal with Gulf Oil Co. Last February, Goodrich issued 700,000 new shares worth about $32 million to buy up Gulf's half-interest in Goodrich-Gulf, a money-losing subsidiary. The price was steep, but the deal put 5% of Goodrich's stock into the friendly hands of Gulf's management.
> To make it even more difficult for Heineman to gain control, Goodrich persuaded shareholders to vote for the staggering of directors' terms. Thus, Northwest cannot possibly win a majority on the board until 1971.
> To erect a federal regulatory hurdle for Heineman, Goodrich in March paid about $2.7 million in stock to buy Motor Freight Corp., a Terre Haute-based trucking company that competes with Northwest on some rail routes. Goodrich then petitioned the Interstate Commerce Commission, urging it to rule that Northwest would need ICC approval for a merger.
No Soliciting. The all-out campaign paid valuable dividends for the established management. On Capitol Hill, Senator William Saxbe of Ohio rose to praise Goodrich's efforts to fend off "the predatory advance of a conglomerate." The Akron Beacon Journal likened Northwest to a "brash hussy trying to persuade our favorite uncle to elope." Forbes, a business biweekly, ran a long article that was so favorable to Goodrich that the company bought full-page newspaper space to reprint it as an ad.
The Ohio Division of Securities prohibited Northwest from soliciting shares in that state because of "indeterminate factors." Most important, the Justice Department intervened on the ground that the Northwest bid raised antitrust questions. The case promises to be a significant part of Antitrust Chief Richard McLaren's plan to challenge conglomerates (see following story).
Save Me, Save Me. The Goodrich defense has been doubly effective because U.S. securities laws commit Northwest executives to frustrating silence until their tender offer expires in June. Heineman has been able to speak out only to the extent of blaming his firm's first-quarter loss largely on a strike at its Lone Star Steel Co. and the severe weather, which hampered its rail operations. He has also talked in general terms about struggles for corporate control. "There are a lot of frightened, stodgy companies with frightened, stodgy managements," he says. "Conservative businessmen are running to the Government saying, 'Save me, save me,' and very often it is at the expense of stockholders."
Keener and his fellow managers have shown through their vigorous defense that they are anything but stodgy. Even so, they are not about to turn down the Government's help. If the trustbusters do enjoin the financial battle with Northwest Industries, Goodrich shareholders will not even get a chance to decide that they might like Heineman's offer after all.
-Others, and their profit margins: Goodyear, 5.1%; Uniroyal, 4%; Firestone, 6%.