Ling-Temco-Vought

In 1947, entrepreneur James Ling founded an electrical contracting business, Ling Electric Company, in Dallas, Texas. He lived in the rear of the shop. After incorporating and taking the company public in 1955, Ling found innovative ways to market the stock, including selling door-to-door and from a booth at the State Fair of Texas.[1]

In 1956 Ling bought L.M. Electronics, and in 1959 added Altec Electronics, a maker of stereo systems and speakers. In 1960 Ling merged the company with Temco Aircraft, best known for its missile work. In 1961, using additional funding from insurance businessman Troy Post and Texas oil baron David Harold Byrd they acquired Chance Vought aerospace in a hostile takeover.[1] The new company became Ling-Temco-Vought.

With low interest rates allowing the company to borrow huge sums, Ling built one of the major 1960s conglomerates. As long as the target company's earnings exceeded the interest on the loan (or corporate bond), or the company's price/earnings ratio was less than that of Ling-Temco-Vought's stock, the conglomerate became more profitable overall. Given the fairly unsophisticated stock research of the era, the company appeared to be growing without bound, and its share price rose.

In 1964 Ling turned Ling-Temco-Vought into a holding company and established three public companies as subsidiaries, LTV Aerospace, LTV Ling Altec, and LTV Electrosystems. LTV Aerospace received assets for Vought and a large part of Temco Aircraft. LTV Ling Altec contained Altec Electronics and other properties and the rest went to LTV Electrosystems. The intention was to make the sum of the parts appear to be worth more than the whole. Ling used this technique to raise capital and buy more companies.[1] Portions of LTV Electrosystems would later spin off to E-Systems, then part of Raytheon IIS, and since 2002 part of L-3 Communications-Integrated Systems (L-3/IS).

In 1965, Ling added the wire and cable company Okonite. In 1967, they took over Wilson and Company, a company twice the size of Ling Temco Vought. Wilson was a diverse company involved in meat packing, sporting goods, and pharmaceuticals.[2] Wilson's president Roscoe Haynie was not aware of the takeover scheme until two weeks before the takeover was complete.[3] Ling later split Wilson into three parts (meat packing, sporting goods (Wilson Sporting Goods), and pharmaceuticals (Wilson Pharmaceutical and Chemical)), and spun them off into separate companies traded on the American Stock Exchange.

In 1968, Ling-Temco-Vought added Greatamerica Corporation, Troy Post's holding company for Braniff International Airways and National Car Rental,[2] and J & L Steel. In addition, he acquired resorts in Acapulco, Guerrero, Mexico, and Steamboat Springs, Colorado. By 1969, LTV had purchased 33 companies, employed 29,000 workers, and offered 15,000 separate products and services, and was one of the 40 biggest industrial corporations.

Ling-Temco-Vought had a combined sales of $3.6 billion in 1969 ($25.1 billion today),[3] but investors found that the conglomerates were not growing any faster than the individual companies had before they were bought out. Share prices plummeted, sparking a bear market, and there was a general feeling that the conglomerates were to blame for the market woes. An antitrust lawsuit was filed that year.

Eventually the board of directors demoted James Ling in 1970 and he left the company, to be replaced by former Ling-Temco-Vought executive, Paul Thayer.

As part of a 1971 antitrust settlement, the company sold its Braniff and Okonite components,[2] and Thayer changed the company name from Ling-Temco-Vought to LTV Corporation. Thayer was succeeded by former Xerox executive Raymond Hay.

In July 1986, LTV Corporation filed for Chapter 11 bankruptcy protection. With $6.14 billion ($14.3 billion today) in total assets and $4.59 billion in debt. It was the largest bankruptcy in US history to that point.[4]

The company went into a series of divestitures, most notably the entire LTV Aerospace division; the aerospace component retained the legacy Vought name as the independent Vought Corporation, while the missile component later became part of Loral Corporation[5] and later became the Lockheed Martin Missiles and Fire Control division. After the 1984 merger of the Jones and Laughlin Steel Company subsidiary with Republic Steel Corporation, the company continued to exist primarily as a steel producer, renaming itself LTV Steel, and moved its headquarters to Cleveland, Ohio in 1993.

LTV did not leave Chapter 11 bankruptcy protection until June 28, 1993 in what was described in 1999 as one of the longest and most complicated bankruptcies in US history.[3]

In 1999, LTV acquired Pittsburgh-based Copperweld Corporation from Imétal S.A. of France.[6]

LTV Steel filed again for Chapter 11 bankruptcy protection, on December 29, 2000.[7] The company subsequently dissolved on December 18, 2001.

International Steel Group

The assets were acquired in February 2002 by Wilbur Ross and merged with Weirton Steel to form the International Steel Group.[2][8]

Railroad subsidiaries

Some of the railroad subsidiaries – Chicago Short Line Railway, Cuyahoga Valley Railway, and River Terminal Railway – went to ISG, while the Ohio Central Railroad System acquired Aliquippa and Southern Railroad and Mahoning Valley Railway. The former Monongahela Connecting Railroad is now operated by the Allegheny Valley Railroad.

Steel

In 2002, Lombard Metals Corp located in Bala Cynwyd, Pennsylvania, purchased all the outside inventory totaling 224,000,000 lbs of steel from 58 locations throughout the country.

• Sobel, Robert (2000). The Money Manias: The Eras of Great Speculation in America, 1770–1970. Beard Books. ISBN 1-58798-028-2.

• Brown, Stanley H. (1972). Ling: The Rise and Fall of a Texas Titan. New York. – for more detail about the founder and company during the conglomerate era.

• Hickam, Jr., Homer H. (1998). Rocket Boys. 1540 Broadway, New York, New York 10036: Delacorte Press.CS1 maint: location (link)