Post on 16-Aug-2020
Michael Sol Collection
BUSINESSSTATE OF BUSINESS
Summer Strike?Dave McDonald, the Steelworkers'
handsome chief, put on his best sco\"llastweek as he posed for a TV film, andessayed some rolling perorations in theinimitable manner of the master, John L.Lewis. McDonald cried that in the currentnegotiations the steel industry had madean "about-face" on 20 years of collectivebargaining, and given his union an "ultimatum" to accept a "substandard contract." After four weeks of negotiatingbetween McDonald and U.S. Steel's JohnStephens. the industry's chief spokesman,the differences boiled down to I) a uniondemand for a 28.3¢ an hour "package"deal v. a management offer of I4-I5¢,2) management's demand for a five-yearcontract instead of the usual two-yearpact.
There were signs, however, that neitherside had spoken the final word hefore thisweek's strike deadline: while letters fromBethlehem and Republic Steel to theiremployees emphasized that they stoodfirm on the five-year pact. the letter fromU.S. Steel, the industry leader. failed noticeably to take such an adamant position.Union Leader McDonald indicated thathe too would welcome a compromise "ifit is a reasonable agreement we can livewith." Some seasoned observers even discerned the possible shape of compromise:a three-year pact, a package increase of20¢ an hour.
Both sides made the usual last-minutethreatening gestures: the union dispatchedstrike rules to the locals ("There must notbe any drinking on the picket lines; noelaborate meals shall be served"). andthe steel companies announced that they
Associated PressNEGOTIATORS McDONALD & STEPHEKS
No one seemed very worried.
66
would begin tapering off production andbanking their furnaces by midweek ifthere was no sign of progress.
No one, however, seemed very worried.It was summer, and the prospect of a twoor three week walkout from the mill heatduring July held few terrors for most steelworkers. The industry was also headinginto the midsummer slack; steel production, currently scheduled at 95.7% of capacity, would probably drop to 80% before the expected snapback late in thethird quarter.
Businessmen generally were concernedwith the whole state of the economyrather than with the steel segment. Generally, the news was encouraging. Thebottom of the Detroit slump seemed tohave been reached and passed. Both Fordand G.M. were .rehiring, and Ford announced it had found it necessary to increase production schedules for July.
The Commerce Department raised itsestimate of total construction spendingthis year, forecast a new high of $44.5 billion, $1.5 billion higher than in '55. Pacedby aircraft and motor issues, the stockmarket also continued to edge up; theDow-Jones industrial average ended theweek at 487.95, nearly 20 points abovethe low of the ileitis break.
RAILROADSWelcome Aboard
Chicago's genial J. (for Joseph) PatrickLannan has parlayed a genteel raidingtechnique into a corporate empire withinterests ranging from nickel vending machines to high-priced dredging operations.Last week Pat Lannan and Arthur \;Virtz,ice-show and boxing promoter and realestate owner, informed directors of theChicago, Milwaukee, St. Paul & PacificRailroad that they had control of theIo.640-mile road, fourth largest in the U.S.
Lannan said that more than 20 unnamed friends of his had gradually boughtmore than 3°0,000 of the Milwaukeeroad's widely scattered 2.123,210 outstanding shares (present market price:20i per share). He thought this slicelarge enough for effective control. Directors promised Lannan and vVirtz, who ownqlmost 30,000 shares apiece v. 8.500 sharesheld by all other directors combined, seatson the board. Said Lannan's good friendand Milwaukee Board Chairman LeoCrowley: "We're happy to have a fellowlike Pat on the board."
None of the lVIilwaukee's managementseemed worried by the possibility thatLannan's group might take over. One ofthe busiest buyers and sellers of companies in the U.S., Pat Lannan, 51, specializes in buying into slow-rolling but potentially good companies and stepping uptheir lagging profits.
Lannan's formula is to reorganize, modernize, diversify. The Milwaukee road,weakest of the so-called "transcontinentar' lines '(because' its li'ghtly traveled
Arthur SiegelRAIDER J. PATRICK LANNAN
No one seemed to be worrying.
track traverses largely underpopulatedareas), is tailor-made for his touch. Extending from Chicago west to Omaha andnorthwest to Puget Sound, it is twelfth onthe list of moneymakers; its 1955 net was$9,532,282. But Lannan is betting on aNorthwest boom to boom the Milwaukee.
Much of the Milwaukee's track overlaps the Chicago & North Western Railway, which runs from Chicago to Lander,Wyo. The big hope for both lines is theirlong-discussed consolidation. Merger talksfaltered this year when control of NorthWestern fell to Chicago Lawyer BenHeineman (TIME, Feb. 20). Heinemanwants to strengthen his road before bargaining \"ith its leading competitor. Sincebecoming North vVestern's boss, Heineman has cut costs and deadwood, streamlined maintenance, figures to have NorthWestern steamed up enough to start negotiations in three years. But Lannan alsoplans to do a lot with the Milwaukee bythat time.
COMMODITIESOdorous Onions
On the Chicago Mercantile Exchange,the giddy fluctuations in onion pricesseemed very suspicious to the CommodityExchange Authority. Beginning at $2.75per 50-lb. bag last August, the priceskidded to IO¢ by mid-March. Last weekthe Commodity Exchange Authority formally charged that it had sniffed out-as it suspected-a price manipulationplot.
CEA said that the market-rigging hadbeen directed by a New York onion grower, Vincent W. Kosuga, and a Chicagoproduce distributor. Sam S. Siegel, in adeal \"ith 13 onion gro\"ers. But partway
TIME, JULY 2, 1956
BUSINESSSTATE OF BUSINESS
Summer Strike?Dave McDonald, the Steelworkers'
handsome chief, put on his best sco\"llastweek as he posed for a TV film, andessayed some rolling perorations in theinimitable manner of the master, John L.Lewis. McDonald cried that in the currentnegotiations the steel industry had madean "about-face" on 20 years of collectivebargaining, and given his union an "ultimatum" to accept a "substandard contract." After four weeks of negotiatingbetween McDonald and U.S. Steel's JohnStephens. the industry's chief spokesman,the differences boiled down to I) a uniondemand for a 28.3¢ an hour "package"deal v. a management offer of I4-I5¢,2) management's demand for a five-yearcontract instead of the usual two-yearpact.
There were signs, however, that neitherside had spoken the final word hefore thisweek's strike deadline: while letters fromBethlehem and Republic Steel to theiremployees emphasized that they stoodfirm on the five-year pact. the letter fromU.S. Steel, the industry leader. failed noticeably to take such an adamant position.Union Leader McDonald indicated thathe too would welcome a compromise "ifit is a reasonable agreement we can livewith." Some seasoned observers even discerned the possible shape of compromise:a three-year pact, a package increase of20¢ an hour.
Both sides made the usual last-minutethreatening gestures: the union dispatchedstrike rules to the locals ("There must notbe any drinking on the picket lines; noelaborate meals shall be served"). andthe steel companies announced that they
Associated PressNEGOTIATORS McDONALD & STEPHEKS
No one seemed very worried.
66
would begin tapering off production andbanking their furnaces by midweek ifthere was no sign of progress.
No one, however, seemed very worried.It was summer, and the prospect of a twoor three week walkout from the mill heatduring July held few terrors for most steelworkers. The industry was also headinginto the midsummer slack; steel production, currently scheduled at 95.7% of capacity, would probably drop to 80% before the expected snapback late in thethird quarter.
Businessmen generally were concernedwith the whole state of the economyrather than with the steel segment. Generally, the news was encouraging. Thebottom of the Detroit slump seemed tohave been reached and passed. Both Fordand G.M. were .rehiring, and Ford announced it had found it necessary to increase production schedules for July.
The Commerce Department raised itsestimate of total construction spendingthis year, forecast a new high of $44.5 billion, $1.5 billion higher than in '55. Pacedby aircraft and motor issues, the stockmarket also continued to edge up; theDow-Jones industrial average ended theweek at 487.95, nearly 20 points abovethe low of the ileitis break.
RAILROADSWelcome Aboard
Chicago's genial J. (for Joseph) PatrickLannan has parlayed a genteel raidingtechnique into a corporate empire withinterests ranging from nickel vending machines to high-priced dredging operations.Last week Pat Lannan and Arthur \;Virtz,ice-show and boxing promoter and realestate owner, informed directors of theChicago, Milwaukee, St. Paul & PacificRailroad that they had control of theIo.640-mile road, fourth largest in the U.S.
Lannan said that more than 20 unnamed friends of his had gradually boughtmore than 3°0,000 of the Milwaukeeroad's widely scattered 2.123,210 outstanding shares (present market price:20i per share). He thought this slicelarge enough for effective control. Directors promised Lannan and vVirtz, who ownqlmost 30,000 shares apiece v. 8.500 sharesheld by all other directors combined, seatson the board. Said Lannan's good friendand Milwaukee Board Chairman LeoCrowley: "We're happy to have a fellowlike Pat on the board."
None of the lVIilwaukee's managementseemed worried by the possibility thatLannan's group might take over. One ofthe busiest buyers and sellers of companies in the U.S., Pat Lannan, 51, specializes in buying into slow-rolling but potentially good companies and stepping uptheir lagging profits.
Lannan's formula is to reorganize, modernize, diversify. The Milwaukee road,weakest of the so-called "transcontinentar' lines '(because' its li'ghtly traveled
Arthur SiegelRAIDER J. PATRICK LANNAN
No one seemed to be worrying.
track traverses largely underpopulatedareas), is tailor-made for his touch. Extending from Chicago west to Omaha andnorthwest to Puget Sound, it is twelfth onthe list of moneymakers; its 1955 net was$9,532,282. But Lannan is betting on aNorthwest boom to boom the Milwaukee.
Much of the Milwaukee's track overlaps the Chicago & North Western Railway, which runs from Chicago to Lander,Wyo. The big hope for both lines is theirlong-discussed consolidation. Merger talksfaltered this year when control of NorthWestern fell to Chicago Lawyer BenHeineman (TIME, Feb. 20). Heinemanwants to strengthen his road before bargaining \"ith its leading competitor. Sincebecoming North vVestern's boss, Heineman has cut costs and deadwood, streamlined maintenance, figures to have NorthWestern steamed up enough to start negotiations in three years. But Lannan alsoplans to do a lot with the Milwaukee bythat time.
COMMODITIESOdorous Onions
On the Chicago Mercantile Exchange,the giddy fluctuations in onion pricesseemed very suspicious to the CommodityExchange Authority. Beginning at $2.75per 50-lb. bag last August, the priceskidded to IO¢ by mid-March. Last weekthe Commodity Exchange Authority formally charged that it had sniffed out-as it suspected-a price manipulationplot.
CEA said that the market-rigging hadbeen directed by a New York onion grower, Vincent W. Kosuga, and a Chicagoproduce distributor. Sam S. Siegel, in adeal \"ith 13 onion gro\"ers. But partway
TIME, JULY 2, 1956