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Twentieth-Century Business Archives

The LTV Corporation - Lehman Brothers Collection

The LTV Corporation

List of Deals

The LTV Corporation's roots lie in an electrical construction and engineering firm established by Jimmy Ling in 1947. In 1956 the Ling Electric Company merged with L.M. Electronics of California, and the name of the company was changed to Ling Electronics. The company's name was changed to Ling-Altec three years later, following a merger with Altec Electronics. The company merged with the Temco Electronics and Missile Company of Dallas the next year; the new company, Ling-Temco, became one of the first major defense companies to be founded after World War II. In 1961 the company merged with the Chance Vought Aircraft Company. Once again, the company's name was changed—to Ling-Temco-Vought.

Jimmy Ling's idea of what constituted a successful conglomerate was based on the notion that no division should account for more than 30 percent of the company's sales. In addition, concentration of the company's business in related fields was to be avoided at all costs. It was for that reason that the company became interested in Wilson Foods in 1966. Wilson's primary product was fresh meats, but it also operated two other businesses dependent upon animal byproducts: sporting goods and pharmaceuticals. Ling-Temco-Vought acquired Wilson Foods in 1967. At that time, Ling-Temco-Vought was listed number fourteen in the Fortune 500 ranking, with annual sales of over $1 billion. The company divided Wilson into three operating divisions: Wilson & Company (meat), Wilson Sporting Goods, and Wilson Pharmaceutical & Chemical. Shares of stock in the three divisions were sold to the public.

Ling-Temco-Vought's growth from 1965 to 1969 was impressive. In 1965 the company had total sales of $36 million. That figure had grown by more than 100 times, to $3.8 billion, in 1969. This growth was made possible through "redeployment," Ling's term for offering a minority share of a Ling-Temco-Vought division's stock to the public. Private investors would drive up the price of the stock under favorable market conditions. This provided the company with more collateral to support larger bank loans, which were, in turn, used to finance more takeovers. In 1968 the company acquired the Greatamerica Corporation, which was the parent company for Braniff Airways, National Car Rental, and a number of insurance companies. The company purchased a majority interest in the Jones & Laughlin Steel Corporation of Pittsburgh later that year. The company's numerous acquisitions led the U.S. Justice Department to initiate an antitrust investigation. The company avoided a federal lawsuit by selling Braniff and the Okonite division.

Ling-Temco-Vought's growth halted as the economy began to decline in 1969. The company was forced to divest itself of several divisions in order to generate enough cash to compensate for its growing debt. Despite such measures, at that time the company's stock was trading for $11, as opposed to its 1967 worth of $167 per share. The company gained new leadership in 1970, when it ousted Jimmy Ling from his position as chairman. The company's first goal to regain its financial footing was to dispose of its unprofitable divisions and remove all the others from public trading. Ling-Temco-Vought, which had until that time been more of an investment portfolio than a holding company, was to be converted into an operating company directly involved with its subsidiaries. In 1971 the company was renamed the LTV Corporation. Later that year, LTV acquired the remaining shares of Vought Aircraft from private investors. LTV's Vought division was subcontracted to manufacture tail sections for a number of aircraft. By the mid-1970s, however, Vought's ability to generate a consistent profit was undermined by the Pentagon when it eliminated Vought from several lucrative defense contracts.

By 1977 LTV was reduced to three principal lines of business: steel (Jones & Laughlin), meat packing (Wilson), and aerospace (Vought). All three divisions were suffering from the adverse conditions in their respective markets, and LTV lost $39 million on sales of $4.7 billion that year. At that time, the company purchased the Lykes Corporation of New Orleans. Lykes was the parent company of Continental-Emsco, a petroleum equipment supply and service company; the Lykes Brothers Steamship Company, a cargo shipping company; and Youngstown Sheet & Tube, a steel-finishing plant. The company believed that the Youngtown mill would benefit its own steel business. A new division, J&L Steel, was introduced upon completion of the merger.

In 1981 the company attempted to perform a similar expansion of its aerospace division. The takeover target was the Grumman Corporation. Grumman opposed the takeover, and the Federal Trade Commission imposed an injunction against further purchases of Grumman stock by LTV on the grounds that a merger of the two companies would be anticompetitive in the carrier-based aircraft field. Without the additional resources of Grumman, LTV's Vought division was forced to re-equip itself with new equipment in order to meet its fifteen-year $4 billion contract to produce a multiple launch rocket system for the Defense Department. It was a very costly investment and left LTV with liquidity problems at a very bad time. Also in 1981, LTV sold its Wilson subsidiary to generate cash. After selling Wilson, LTV was left with LTV Steel, LTV Aerospace & Defense, and LTV Energy Products.

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