Away from Whimsy

In 1956, when Robert S. Ingersoll succeeded his aging father as president of Borg-Warner Corp., one of the U.S.'s biggest producers of auto parts, he found a company beset by crises. Not the least of his troubles was that Ford had just announced it would build its own automatic transmissions, lopping a neat $100 million off BW's volume. Beyond that, the organization chart was in dangerous disarray. The four companies that had merged in 1928 to form Borg-Warner continued to compete with one another headon; their four top executives rarely condescended to drop in on the headquarters building in Chicago. And new acquisitions followed the same separatist line. Earnings, which had hit a record $41 million in 1955, plunged to nearly half that by 1958.

The tall, rail-thin and prematurely bald new president saw that his company was desperately in need of an overhaul, no matter how costly or time-consuming it might be. First, Ingersoll consolidated his divisions, cutting the number of the men who reported directly to the president from 37 to eight. Even as he strengthened the company's historically dominant auto-parts sector, Ingersoll sought to rebuild the other product lines, easing the company away from the cyclical and whimsical swings of Detroit.

Pint-Size Plastics. The company's industrial-products division, which already included Morse Chain and Pesco pumps, was expanded with the acquisition of Byron Jackson Pump Co.; the division now claims 22% of sales. BW's builders-and-consumers division--with its well-established Norge line of household appliances--went out and added York Corp., manufacturers of air conditioners. This division now has gathered 30% of company sales.

In 1935, Borg-Warner had acquired two steel companies and a pint-size plastics company now called Marbon Chemical; that collection formed a chemicals division. While steels have progressed gradually, representing some 4% of total sales, Marbon chemists have developed a plastic named Cycolac, which is now used for everything from football helmets to Western Electric-built telephones. As a result of this discovery, chemicals became BW's fastest-growing division. Sales boomed from $36.4 million in 1962 to $99 million last year--giving the division 10% of the company's turnover.

For all the diversification, Borg-Warner's auto-parts division has hung onto a big, 34% chunk of sales, even though last year's so-so Detroit performance contributed to BW's 8.4% fall-off in earnings, down from $47 million the previous year, on record sales of $952 million.

But while the U.S. picture was disappointing, Borg-Warner auto parts were finding new markets abroad, where sales increased by 16%, to $45 million. Operating in twelve countries, B-W has "commonized" such parts as clutches and axles to fit most foreign cars. Traffic jams from London to Tokyo are giving foreign drivers a yen for autos with shiftless transmissions, but only 10% of the cars in Europe have them. The Borg-Warner-built "automatic stick shift," optional this year in Volkswagens, should become a trend setter. In Japan, where 91% of the cars use manual shift, automakers are eager to acquire BW's tightly patented know-how. So far, however, Government restrictions against foreign investment; have stymied all efforts to organize a company, which Borg-Warner resolutely insists it must control before allowing production.

In any event, with some 30 acquisitions to his credit at home and abroad in a brief eleven years, Robert Ingersoll, 54, has moved his once-ailing auto supplier deep into the prosperous conglomerate area. That strenuous task accomplished, he now plans to confine his personal role to ''looking to the future of the corporation." Taking over some of his more hectic activities will be James F. Bere, 45, a graduate of the auto-parts division who last week was named president.

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