Gold-painted Midas mufflers have long rejuvenated the aging exhaust systems of millions of American autos. Even so, there is something new: after 20 years of steady but unspectacular growth, the sales and profits of Midas-International Corp. have suddenly taken off on a heady flight. Last December Midas, which franchises independent muffler installers, opened in Phoenix its 900th muffler shop. The company has also been diversifying to become a force in the burgeoning market for recreational vehicles—campers, trailers and motor homes. Last year Midas reported $225 million in sales, a 39% increase, to its corporate parent, IC Industries, Inc., the company that owns the Illinois Central Gulf Railroad. Midas' earnings are not reported separately, but analysts guess they may be about $23 million annually, pretax. Midas President Ralph Weiger, 52, will not confirm that, but he does say dollar earnings in 1976 were five times as large as two years earlier.
Founded by Chicago Entrepreneur Nate Sherman, Midas long thrived as the number of its franchised dealers increased steadily over the years. But after Nate's son Gordon took over in 1967, a father-son conflict arose. Gordon was a University of Chicago intellectual and partial to Elizabethan English and the raising of orchids and hummingbirds. He favored a relaxed style of management that did not sit well with dad. Several dealers quit, and the internal strife began to show up in leaner profits. After a proxy fight, Sherman Sr. in 1972 sold his controlling interest to IC Industries. When IC bought Signal-Stat, a New Jersey auto-accessories maker, it assigned Signal-Stat's president Weiger to bolster Midas.
The new chief executive, a former Purdue University football star, began an aggressive program of international expansion. When he assumed command, Midas' only operation outside the U.S. consisted of a handful of muffler outlets in Canada. Now Midas has shops in eight foreign countries, and Weiger expects up to 25% of its muffler outlets to be overseas by 1985. In order to service the increasing number of foreign cars coming to the U.S., Weiger plunked down $2.5 million for a new, more efficient plant outside Chicago. There, original mufflers and tail pipes from American and foreign cars are redesigned by Midas engineers to find the fewest possible shapes necessary for a good replacement fit. Midas backs up such technical finickiness by requiring franchise holders to attend its own M.I.T. (Muffler Institute of Technology) at Palatine, Ill. The franchise holder also must maintain a large supply of parts. Each Midas shop stocks an inventory of mufflers that will fit all American-make cars of the past ten model years.