Life with the Merger King
Dallas entrepreneur Jimmy Ling dreamed up the modern conglomerate. And then it crashed.
Before Enron and Lehman Brothers, there was Jimmy Ling, a 1960s-era Dallas businessman who founded the company LTV, and invented what he called “redeployment.” During an era when most companies made products and sold them, he saw the future of business: acquisitions and mergers.
It’s now a fact of business life. But Ling, like many pioneers, took too many risks and paid the price.
I worked for him during some of the most active days of the Ling saga. I was director of international information. I had two secretaries, a plastic plant, and a grand view of downtown Dallas from the LTV Tower. My job was to produce an up-to-date history of the accomplishments and objectives of LTV. That wasn’t an easy task, because what we’d done and what we planned to do often changed daily.
I didn’t meet Jimmy Ling until a week or so after I got the job. One afternoon, there was a scurrying about in the office, something like a swarm of bees suddenly aware of a change in the air. I walked into the outer office and found the rest of the staff already there. Someone told me Ling was on his way down. This was a new experience for me. On my last job, everyone hid when the boss was around.
Jimmy Ling had presence. He was there, in the room, and everyone knew it. Famous people like movie stars, presidents, even some striking stranger on the street have a certain bearing, and Ling had that. I liked Ling, admired him at once. He shook my hand and welcomed me to the company. When he was gone, everyone in the office felt he had come down from the heights just to see them.
That first encounter taught me a great deal about Ling’s success. Even when you were with him, he never stood still. His mind raced from one idea to the next. His presence drew others to him. When you met him, you wanted to invest in his new, brilliant project, to be a part of his success.
Scarcely anyone understood that Ling’s unshakable self-confidence, and the incredible speed of his business ventures, would be the elements that would bring him down.
Ling was a high school dropout from Hugo, Okla. He showed ambition from the start. He became a journeyman electrician, which usually takes several years, in six months. He joined the fight in World War II, and when he got out, he sold his Dallas house and set up a small electrical contracting firm. He sold shares at the Texas State Fair and raised $738,000. It’s easy to imagine he was looking for money to finance his next venture.
Ling was shrewd, and he had a mind-boggling idea for how to make a lot of money. Ling defined his business tactic as “redeployment,” which doesn’t really say much unless you were there watching Ling do it. Even then, it didn’t seem quite real, like a kid in a candy store grabbing one of these and one of that.
His idea worked so well that he turned the business world upside down and scared a lot of old-timers out of their executive chairs. Soon Time, Fortune and everyone else knew who he was: “Jim Ling, the Merger King,” “The Dazzling, Legendary Jimmy Ling,” “Jimmy Ling’s Wonderful Growth Machine ….”
In 1956, after taking his electronics firm public, he merged it with L.M. Electronics. Then, on to Altec Electronics, Ling-Altec, Ling-Temco and in 1961, after a difficult takeover battle with aircraft manufacturer Chance-Vought, Ling’s empire became Ling-Temco-Vought, eventually shortened to LTV. With that first venture, Ling’s term “redeployment” became clear for what it is: Make money to buy firms that make money to rapidly move the process along.
Ling and a couple of his contemporaries created the modern conglomerate. He would pick a certain company and offer a minority of shares to the public. As buyers drove the share price up, collateral at the bank rose, letting him look for more companies on the market.
Ling had a nearly awesome instinct for the task. His mystique, his persona kept the machine rolling. As long as people believed in him, shares went up, and Ling made money. It could never have happened if Ling hadn’t believed in himself. At one point, he held 80 percent ownership in LTV. He was betting his personal fortune on his own success.
He was often up before daylight studying markets. People followed Ling. Many had no idea what he was doing, but they felt he was onto something. Ling, in turn, understood them. Not long after he started, he sensed that public involvement created confidence and trust. People wanted to invest in Ling’s enterprises. They felt it was the right thing to do.
With his new ideas, he took his company from 204th to the 14th largest in the nation in 14 years. Ling saw how he could buy one company and turn it into three separate companies. He called it his “rule of three.”
For example, Ling gained control of Wilson & Co. in early January 1967. Wilson sold meat, but it was clear to Ling there was more to this organization than sausage and steak. The company produced byproducts such as leather for footballs and pharmaceuticals from animal organs. Soon there were three companies: Wilson & Co., Wilson Sporting Goods and Wilson Pharmaceuticals. Not long after the three companies went public, LTV’s piece of the action added up to a great deal more than its initial investment.
One afternoon after the Wilson acquisition, I got a company car and drove to the airport to pick up a shipment. By the time I was done, the trunk and the backseat were crammed with boxes of golf balls. It was no big surprise that each ball was imprinted with the name Jimmy Ling.
Ling liked people, and people liked him. His employees were loyal. I recall an old “been through the mill” PR guy who, at the end of a business trip in Ling’s plane, received a nicely wrapped box containing a set of “I Flew With Jim” crystal glasses. It wasn’t an uncommon gesture.
Ling was a paradox. Polite and soft-spoken, he was also a man with an office that took up the entire 34th floor of the building, a space so vast you had to learn where to find his desk. He was a good old boy who happened to own a Louis XV-style castle in Dallas.
I thought I was getting the feel of things until Ling asked me to go out to a building between Dallas and Fort Worth. He said I’d see “some interesting stuff” I could use in the publication I was putting together about the company’s projects.
I hadn’t dreamed Ling was into anything like this. A scientist in a proper robe gave me a wooden tongue depressor, turned on a laser and burned a hole right through the thing. Then he turned on a hologram, a picture floating in midair. You could walk around it and see it from every angle. I had never heard of a laser or a hologram. I’m not sure anyone else had, either. My science friend said he was also working on a near-invisible device that would send information through little bits of crystal. No wires, no nothing.
No one else in the office had heard about all this. I wondered, later, when things weren’t going so well, if “weird science” wasn’t one of Ling’s projects that he flung into the ether to fly by itself. Maybe he intended to do something about it and other matters got in the way. That was Ling. He often plowed ahead on his own, never checking to see if his board, associates or friends were lagging behind.
Once Ling decided he wanted a company, he would risk everything to get it. In 1961, he went after aircraft maker Chance-Vought, but only got it after a fight that included civil and federal anti-trust suits against his company. With this takeover, Ling’s conglomerate was so huge it was pushing the boundaries of the law. It was one step in his career that would haunt him in the end. But Chance-Vought added the “V” to LTV.
The reign of the conglomerates continued into the 1960s. By 1970 a bad economy, coupled with increasing interest by the Justice Department, began to have serious consequences for LTV. It was clear to everyone in the building that things weren’t going well, but only a few well-placed people knew what was going on. That was the way things were at LTV. We believed in Jimmy, and if you saw him, you’d never guess he had a worry in his head. Ling simply raced on.
In 1968 he gained a controlling interest in Jones & Laughlin Steel. To Ling it seemed a done deal. On March 22, 1969, he was playing cards at his country club when he got a call from the office. An antitrust suit had been filed to divest LTV of J&L. Ling could scarcely believe it. His own journal says it all: “My God, every time we get our head up, somebody tries to knock it off.”
The J&L deal would be the one that took Ling down. An historical perspective offers a clear idea of what went wrong. Conglomerate kings are jugglers. Ling was a good investor, but it’s hard to judge and manage companies that have nothing in common. The people at the top often lack the expertise to manage the companies they control. Eventually, LTV got too big and collapsed.
At the end, during the fight for J&L Steel, I had little time to work on my project. Everyone in the office was writing press releases fighting the Justice Department’s assault on LTV. Sometimes we’d send out two or three releases an hour. Then one day in 1968, my boss came in and told me to just leave everything on my desk and go home.
I was as shocked as Enron employees would be decades later. I had believed in Ling. No one believed in Ling more than Ling himself, but that wasn’t enough to keep LTV flying. The J&L crisis was his last round. The board forced him to resign in 1970. He surfaced in a few years with new ideas that failed. Still, he kept at it to the end of his days. He died at 81 in 2004. In 2005, the board of directors of Empire Energy, the company that once was called LTV, noted Ling’s “unending dedication to the Company.”
Read the New York Times obituary for Ling.
Neal Barrett Jr. has published over 50 novels, including The Hereafter Gang, as well as several short story collections. Last May, he was named Author Emeritus by The Science Fiction Writers of America for “Lifetime Achievement.”