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Corporations: General at General Mills

4 minute read

According to a story plot dear to makers of Army musicals, whenever a war ends the captains turn up, cap in hand, to beg the privates for civilian jobs. Four years ago at General Mills, Inc., this story was played out the other way round. When he retired after 30 years in the Air Force, four-star General Edwin William Rawlings was approached by a former World War II subordinate, Charles H. Bell, then president of General Mills and son of the founder. At Bell’s urging, Rawlings signed on as a vice president of the 34-year-old Minneapolis flour firm. And a year ago when Bell stepped up to the chairmanship. General Rawlings moved in as president and chief executive officer.

Bell’s enthusiasm for his old C.O. was well placed. During the eight years that Big Ed Rawlings ran the Air Force’s Materiel Command, he took its procurement methods from the prop age into the space age. Under Rawlings, a Harvard Business School graduate, the old military system of stockpiling millions of items regardless of cost was turned into a worldwide computerized network of controls that lets little go to waste. This was just the kind of Wheaties that General Mills needed.

One-Man Earthquake. At the time Rawlings took over the company. General Mills faced mounting troubles; in the year ending May 1962 the company’s sales dropped 5% to $546 million, and profits plummeted a sickening 20% to $10,154,000. Last week, when the results of the first six months of General Mills’ current fiscal year were announced, it was apparent that Big Ed’s methods were working. Although sales were down another 6.5%, profits rose an impressive 49% to $7,986,000—barely $2,000,000 less than General Mills earned in all of the preceding year.

To achieve this quick turnaround, Rawlings, 58, put General Mills through a harsh purge. In what some call “Rawlings’ earthquake,” he named six new division managers, seven new plant managers and four vice presidents. And he liquidated General Mills’ biggest liability —its animal-feed division, which had lost $5,500,000 on sales of $50 million because it was hopelessly behind the competition in decentralizing to get near its customers. This abolished 1,300 jobs at a crack, but, says Rawlings with a battle commander’s reasoning, “I felt we had to sacrifice the 1,300 to save the 13,000 other employees.”

Country Corn. When Rawlings took over, General Mills with its Wheaties and Cheerios ranked a distant third be hind Kellogg and Post in ready-to-eat cereals. Rawlings moved the company into “adult” cereals by introducing Country Corn Flakes (flavored with rice), Wheaties Bran with Raisin Flakes, and Total, a high-vitamin cereal. As a result, General Mills has now edged ahead of Post. Rawlings is also driving harder into convenience foods, where General Mills already has a strong bid with Betty Crocker mixes.

Nearly 80% of General Mills’ sales come from flour, consumer foods, and such specialty products as high-protein soybean meal. The rest of its sales come from a strange hodgepodge of activities: chemicals and electronic components divisions which are the remains of a long-abandoned diversification effort that once even had the company producing two-man submarines. Rawlings plans to continue these offshoots but stresses that “our greatest opportunities for profits and growth lie in the convenience food business.”

Fish at 5. Rawlings’ quick mind and near-photographic memory are hidden by a deceptively casual manner. During office hours, he is as likely as not to be found in a staff member’s office, feet propped on the desk, puffing his ever present pipe, and talking about the 5-lb. bass he caught that morning near his Lake Minnetonka home between 5 a.m., when he arises, and 7:30, when he gets to work. Rawlings hates committees, delegates work to individual staff members and expects results. “He doesn’t expect people to come to him with questions, but rather with answers—or at least recommenda tions,” says one of his top men.

The man who is happiest and perhaps least surprised by Ed Rawlings’ swift transition from military to civilian business is Chairman Bell. Says he: “I’ve known and respected Ed for such a long period of time that nothing he does surprises me. This is what I hoped and believed would show up.”

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