LING, JAMES 1922-

CONGLOMERATE ORGANIZER; FOUNDER OF
LING-TEMCO-VOUGHT

Growth Stock of the Go-Go Sixties

James Ling built one of the most exciting, widely diversified conglomerates of the 1960s—Ling-Temco-Vought (LTV). In 1965 Fortune magazine hailed LTV the fastest-growing company in the United States from 1955 to 1965. Three years later it was the country's fourteenth largest industrial concern with sales of $2.8 billion. Ling's assault on the business world and LTVs meteoric rise were nothing short of amazing.

Business Beginnings

A high-school dropout from a working-class background, Ling held a spate of odd jobs before becoming an electrician in Dallas, Texas. After serving in the navy, where he studied electrical engineering, Ling returned to Dallas in 1946. He then sold his house and used the proceeds to set up Ling Electric Company. The small firm originally specialized in residential wiring but soon expanded into larger commercial projects. By 1955 the company was earning __BODY__.5 million annually, and Ling chose to incorporate. However, he soon realized that electronics had greater growth potential than the electrical business, and the following year he bought a small electronics firm that manufactured testing equipment for the aerospace industry. In 1958 he merged the two companies forming Ling Electronics and created a holding company, Ling Industries. During these transactions Ling learned a valuable lesson—the increasing value of his company's stock covered the indebtedness created by purchasing other businesses.

Creating LTV

After acquiring several more small electronics concerns, Ling obtained two other firms—Temco Electronics, an electronic-reconnaissance equipment maker, and Chance Vought, an aircraft manufacturer. The companies were combined, creating LTV. In 1964 Ling "redeployed" his holdings into three subsidiaries, and each issued its own shares of stock. The sale of securities provided capital for further acquisitions. In 1965 Ling began the great expansion with the purchase of Okonite Company, a cable manufacturer, and two years later he purchased Wilson and Company, a meatpacking, sporting goods, and chemical firm. More capital was needed for further expansion, so Ling reconfigured Wilson into three divisions, each issuing its own stock. Two giant acquisitions then followed: Greatamerica, a banking and insurance company which also held Braniff Airways and National Car Rental; and Jones and Laughlin, the sixth largest steel company in the country. By repeatedly reorganizing his companies and issuing various securities, James Ling not only built a mammoth conglomerate, he became a multimillionaire.

Collapse

After 1968, however, things began to fall apart. The Justice Department brought suit against LTV, demanding it spin off the steel firm or other holdings. Rising interest rates and the economic downturn hurt company profits and made its heavy debt load difficult to service. By 1970 LTVs stock had fallen from a high of 169 in 1967 to 7, and Ling was forced to step down as CEO. Although he continued to own a substantial amount of LTV stock and pursued other business interests, Ling's high-flying days were over. LTV struggled over the next decade, selling off subsidiaries to pay down the debt. By 1985, however, when it became clear that the company's fortunes could not be turned around, LTV filed for bankruptcy.