Corporations: New Life in an Old Giant

Any company that makes both reactors for nuclear submarines and $1.25 magnets for extracting wire and nails from cows’ stomachs has some claim to diversity-and Westinghouse Electric claims to be the world’s most diversified company. The oldest electronics firm and the second biggest producer of electrical equipment (after General Electric) in the U.S., Westinghouse makes 8,000 different products in 300,000 variations. The company’s 59 divisions, with their 64 plants spread through 20 states, daily confront almost every American with some Westinghouse product, from 6,000 types of light bulbs to the output of five TV and seven radio stations.

Such diversity usually pays off in today’s kaleidoscopic economy, but Westinghouse’s sales in recent years have been stagnant and its profits falling. Like the dinosaur, the company became too big, too contented and too slow-moving to change with changing conditions. It badly needed a prod-and it got a powerful one in Donald Clemens Burnham, who took over as president 15 months ago after six years as manufacturing vice president. Even Burnham, 49, professes surprise at what he has been able to do. Sales rose 6.2% and profits 30% in this year’s first nine months, and this week Burnham presents even better news to his board of directors: 1964 sales should hit a record of more than $2.2 billion and profits climb 60% to $75 million.

No Long Memos. Burnham is a rangy, mild-mannered mechanical engineer who seriously insists to his employees that he wants “work to be fun” -and sets something of an example by putting in an 8:30-to-6 day, rarely taking work home at night or on weekends. But he knows how to wield both the ax and the scepter-and he has found enough time in ordinary work days to wield both so well that the once-slumbering Westinghouse has leaped to life. When he took over after the resignation of the late Mark Cresap, says Burnham, “I didn’t have to think long about what I was going to do.”

Without hiring any outside talent-not even a management consultant to advise him-Burnham got to work on Westinghouse’s fat and dust-covered corporate structure. He reshuffled ten top executives into new jobs, split up the centralized chain of command to give everyone more responsibilities, created a president’s council in which he and his lieutenants can make decisions without indulging in the long delays and lengthy memos that once characterized Westinghouse. He slashed costs by more than $20 million by getting rid of 3,825 white-collar employees, shaved inventories by $8,000,000 with a telecomputer center outside Westinghouse’s Pittsburgh headquarters that flashes orders to far-flung warehouses and reminds them to restock.

To Mars & Venus. Westinghouse produces salt-water-conversion plants that can make 50 million gallons of fresh water a day and bacteria-killing bulbs that give no light the human eye can see, is also working on a nuclear engine that may some day power spaceships to Mars and Venus. Under Burnham, its money-losing heavy-electrical-equipment division is again profitable (thanks in part to price boosts), and its long-neglected consumer division will finish 1964 in the black (“but not by very much,” says Burnham) for the first time in several years. Westinghouse has developed dozens of new consumer products, including push-bar radios, a self-starting can opener, and an electric toothbrush for kids that is shaped like a rocket and sits on a launching pad.

There are still some skeptics who feel that Westinghouse has a fair way to go before it becomes as sharp and profitable as it should be; Burnham himself admits that the company is “just making a first step.” Wall Street’s revived interest in the firm has sent its stock from 29¼ to 43 since June, and two sophisticated investment companies, Lehman Corp. and the One William Street Fund, have just bought $9,800,000 worth of Westinghouse stock. For all that, Don Burnham will probably get no better testimonial than the one offered last week by former Chairman Gwilym A. Price, 69, who retired in

April and was not replaced. Said Price: “Don Burnham is realistic and down-to-earth, and he did a few simple things that made a wonderful world of difference. The company now has “a spirit of confidence and loyalty to a degree that didn’t exist before.”