CORPORATIONS: Shades of Diamond Jim

When Pittsburgh’s Pressed Steel Car Co., Inc. was organized in 1899, its sales manager was a man named James Buchanan Brady. People called him “Diamond Jim.” Greatest of all bigtime spenders, Diamond Jim Brady didn’t throw his enormous parties just for fun—they paid off in enormous sales.

On the start he gave it, Pressed Steel coasted onward & upward through 30 years of prosperity, during which stockholders drew $38 million in dividends. Over the years Pressed Steel grew staid and conservative, floundered badly in the Big Depression, went bankrupt in 1933, barely survived a bitter reorganization battle, still operated at a loss in 1939.

Then along came a lot of big war contracts—and a man named Ernest Murphy. He was tough and bejowled, just like Diamond Jim, but he was no party-thrower. The hard-working Mr. Murphy shook the dust and defeatism out of Pressed Steel, gave it a new kind of flash. Result: last week, after nearly half a century of making nothing but freight cars, Pressed Steel sparkled with plans to invade the home-appliance field. The first shiny electric ranges were rolling off the production lines in its Chicago plant.

Ernest Murphy, now 59, turned up in Chicago in 1940 as a representative of the British Purchasing Commission in the U.S. He was supposed to keep an eye on Pressed Steel’s production of medium tanks for the British. The plant, idle for most of a decade, had more cobwebs and rats’ nests in it than tanks.

But Murphy knew about production. British-born, he had come to the U.S. in 1909, worked since then as a traction executive in Pittsburgh, New York, Albany. He took off his coat, had M3’s clanking off the assembly lines five months later.

Soon Pressed Steel hired Murphy away from the purchasing commission, made him a vice president in charge of tank production. He worked 17 hours a day seven days a week, often slept in his office, bragged: “This outfit eats production schedules for breakfast.”

Altogether, Pressed Steel turned out 10,200 military vehicles, mostly tanks for the U.S. Army. For this, Pressed Steel got profits of $7 million and Murphy as president.

He wasn’t satisfied that Pressed Steel had again become the third largest freight car manufacturer in the U.S. (numbers 1 & 2: American Car & Foundry; Pullman, Inc.), or that it had $42 million in car orders on hand, expected soon to be producing cars at the rate of 120 a day. Said Murphy: “Selling to railroads means either feast or famine. I’d rather have 50 million potential customers than a handful.”

The way to land those millions was to make household appliances: refrigerators, kitchen cabinets, clothes driers. As they are made out of pressed steel, Murphy already had the know-how. The fact that Pressed Steel is entering a highly competitive field against several well-entrenched firms doesn’t bother Ernest Murphy. Says he: “We’ve got to be in the top bracket. I’ve no time to waste on anything else.”