The Growth of a Giant: A Brief History of ITT
The International Telephone and Telegraph Company (ITT) began operations in 1920 as a New York-based holding company. Its founder was the Danish-Frenchman Sosthenes Behn, whose first two...
...MOVE...
...According to columnist Jack Anderson, a confidential ITT memo (the 'Dita Beard' memo) linked the settling of the deal with a pledge by ITT of up to $400,000 for the Republican National Convention in San Diego, California...
...HURRY-UP-HAL" GENEEN Lapel buttons recently distributed to ITT executives at a management meeting provide us with insight into what the conglomerate concept is all about: "Dig for facts...
...ITT's international operations were threatened during World War II and Behn was forced to quickly negotiate the sale of some foreign holdings to avoid having them confiscated...
...Levitt & Sons...
...Makes Wonder Bread (6 million loaves a day...
...This policy was continued until 1959, when a change in ITT management (the arrival of Harold S. Geneen), began the process of rapid diversification into other industries, and centralized control of ITT's vast corporate empire...
...ITT control to 331 (not counting the 700 companies controlled in turn by these subsidiaries), raised revenues and sales from $930-million in 1961 to over $7-billion in 1971, and has upped the market value of the giant to an amazing $11billion...
...the fire protection division of the Grinnell Corp...
...Offering money to the GOP convention was a way of guaranteeing it...
...By 1970, 47% of ITT's assets and sales were located abroad and 59% of its profits flowed from foreign operations...
...A suit to stop the merger was dropped by the Justice Department in favor of an out-of-court settlement...
...Avis Rent-A-Car...
...ITT complained that'this was a "bad deal", but upon closer examination of the facts, it becomes apparent that the settlement was favorable and profitable for ITT...
...This incredible expansion is due chiefly to ITT's frenzied rate of diversification: the acquisition and merging with companies in completely different lines of business...
...Operators of 220 hotels in 22 nations, including openings in Iran, Buenos Aires and Portugal, in 1972...
...In his eleven years at the helm of the eighth largest corporation in the United States, Geneen has brought the number of companies under...
...After arriving from the Raytheon Corporation in 1959, Geneen wasted little time in putting his expansionist ideas into practice...
...Reap profits...
...Hostess Cupcakes, Twinkies, etc...
...Legal work for Continental is handled by Mudge, Rbse, Guthrie, Alexander & Mitchell, the law firm that'President Nixon worked for from 1963-68, and the firm that Attorney-General John Mitchell recently rejoined...
...After World War II, ITT continued its international expansion, primarily in Canada, Western Europe and Latin America...
...Copyright c 1972 by the North American Congress on Latin America, Inc...
...Geneen believes that diversification "is an insurance policy for orderly future growth," because if one company loses money, there are others that are not affected...
...WHY DIVERSIFICATION...
...ANTI-TRUST MEANS PROFIT The acquisition of the Hartford Fire Insurance Company by ITT reveals that there are very few obstacles in the wayof the expanding conglomerates...
...ITT moved into telecommunications manufacturing in 1925 by purchasing American Telephone and Telegraph's (A.T.& T.) International Western Electric Company which produced telephone equipment in eleven countries...
...Address all mail Box 57, Cathedral Station, New York NY 10025 or Box 226, Berkeley, California 94701...
...Developers of whole communities, such as Levittown, Pennsylvania...
...At the same time, the development of the telecommunications industry within the United States became a priority...
...the ITT Life Insurance Co...
...ITT gave up its facilities in China, Czechoslovakia, East Germany, Hungary, Poland, Rumania and Yugoslavia...
...Second only to Hertz, NACLA'S LATIN AMERICA & EMPIRE REPORT (formerly NACLA NEWSLETTER) Published monthly, except May-June and July-August, when it is published bi-monthly at 160 Claremont Avenue, New York NY 10027...
...It accounts for 26% of ITT income...
...ITT wanted this merger at any price...
...Avis...
...VI, No...
...the controversial merger of this giant Connecticutbased insurance firm was the biggest in history...
...Levitt & Sons...
...The agreement stated that in order fr Hartford to become part of the ITT empire, ITT must sell six subsidiaries within three years: Canteen Corp...
...Continental Baking...
...12 per year for institutions ($22 for two years...
...a food and vending servicing company...
...Make decisions...
...Since Geneen took command, ITT acquisitions have covered everything from hotels and insurance, to real estate development and foods...
...Largest apartment and home builders in the world...
...Sheraton Hotels...
...and the Hamilton Life Insurance Co...
...4 / April 1972- 3 - this firm operates at 1,336 airports around the world and in the U.S...
...The author of these military-like directives was "Hurry-Up-Hal" Geneen, ITT Chairman and President since 1959...
...As a result of increasing anti-trust rulings against mergers between suppliers and customers (vertical mergers) and between competitors (horizontal mergers), many multinational corporations have embarked upon the strategy of diversification, to insure profit and to increase their economic control over many industries...
...This means that Hartford's earnings are a full three times the earnings of the six corporations...
...The six corporations that ITT must unload accounted for $33 million of ITT income in 1971, while Hartford accounted for $105 million...
...1 By 1971, there were 398,000 workers in 70 countries with revenues at $7.3 billion...
...Between 1960 and 1968, ITT acquired over 110 new corporations, half within the United States and half in other countries...
...Second class postage paid at New York NY...
...According to the 1971 Annual Report, ITT receives only 23% of its earnings from telecommunications equipment and operations, the business in which the company was originally engaged...
...In its first year of operation, ITT employed 1,400 workers and had total revenues of $3.9 million...
...The following is a brief list of corporations controlled by ITT: -- Hartford Fire Insurance Company...
...SUBSCRIPTIONS: $6 per year for year for individuals ($11 for two years...
...Its founder was the Danish-Frenchman Sosthenes Behn, whose first two acquisitions were indicative of ITT's future expansionist policy: the Puerto Rican Telephone Company and the Cuban Telephone Company...
...Recently, letters from ITT personnel were found which indicated that even though ITT had protested about the terms of the settlement, the corporation had actually proposed almost the same deal privately to the Justice Department...
...ITT expects to sell these corporations at a "considerable profit" as well...
...Vol...
...In addition, Hartford's earnings increased by 28% in the year 1970-71, indicating that far from hurting ITT, the settlement will mean a huge boost in profit for the corporation...
Vol. 6 • April 1972 • No. 4
