Remembering ITT
Tom Farley back again, writing here. IT&T tried being the world-wide equivalent to AT&T. In some ways they succeeded. Little exists about IT&T on the web but you'll find many good books about them in any large library. They had two eras, the first, founding and development, led by the Behn brothers, and the second, a rebirth and expansion, led by Harold Geneen. How did they start?
In 1925 Western Electric sold its overseas manufacturing plants to a small company with a big name and even bigger ideas: International Telephone and Telegraph. A controversial decision within the Bell System. AT&T sold factories in 11 countries, fearing a United States anti-trust lawsuit. Western kept one foreign company: Canadian Northern Electric, holding it until 1957. AT&T would not return officially to the international market until 1977.
ITT's owners, the curious, conspiratorial Behn brothers, Sosthenes and Hernand, bought Western Electric International for 30 million dollars and renamed it International Standard Electric. Their purchase, backed by J.P. Morgan's bank, included Western's large British manufacturer, renamed Standard Telephones and Cable. The Behns agreed not to compete in America against Western Electric, and to be the export agent for AT&T products abroad. AT&T agreed in return not to compete internationally against the Behns. Now equipped with a large manufacturing arm, IT&T spread across the globe, buying and influencing telephone companies (and their governments) on nearly every continent.
IT&T reorganized and moved into new industries in the late1950s after Sosthenes Behn died. Harold Geneen, an obsessive and ruthless man, at times criminal, took charge. Don Kimberlin relates,
"Harold Geneen's arrival put accountants clearly in charge. During my own time there, the engineers were still reeling from the way in which Geneen trashed all their technology heritage, both figuratively and literally. If it didn't make money in the current accounting cycle, it wasn't worth having around."
"I have my own perfect example, having been the project engineer who found a revolutionary way to improve telegraphy on the then worldwide Telex network. My technique was highly successful, and increased the capacity of an analog voice channel from at first 24 TTY's, then 46, then 92, and ultimately 184 as the serial data modems that supported it increased in capacity from 2400 to 4800 and then 9600 bps."
"That project impressed Park Avenue enough that they featured that 'ITT World's First' on the cover of the annual report....then forgot about it. Geneen was the sort who'd say, 'OK, so what did you do for me this year?' He wouldn't invest in people whose creativity didn't match the accounting cycle. I left ITT to utlimately work for a developer who had me take the new technology to Africa and the Mid-East."
"In that regard, we had to solve a number of marketing problems. One of them was Saddam Hussein, who wanted our Time Division Multiplexing technique because we'd proved and sold it to the Saudis. However, Iraq had alrady embargoed American goods."
"Cable and Wireless stepped into the transaction to broker it and sanitize the deal. At the time, it was interesting because the Iraqis actually came to us, even visiting our company and factory run by American Jews, but then they backed off to have C&W make the purchase and install the goods. No small part of it was the Arab embargo on components from 'corporate supporters of Zionism.' That included most of our semiconductor suppliers -- Fairchild, Motorola and such. The Iraqis sent people from their embassy to our plant, negotiating the price and having us paint out all offending parts ID's in the product, the drawings and the parts lists, to make a special product for them. They paid dearly for us to make our products acceptable to their inspectors -- and C&W benefited from the increased cash flow in the deal."
privateline.comm reader Ron McKinney had a personal encounter with Geenen: "In the winter of 1971, I was an out of work carpenter. Granite Construction Company was building a sewage treatment plant in Homestead, FL. Having previously worked for the company in San Francisco, I drove out to the site, but learned that they had all of the carpenters they needed. So I picked up the Miami Herald and spotted an ad placed by the manager of the Key Biscayne Hotel and Tennis Club. I was hired to remodel a suite of rooms for the owner, Harold Geneen. It wasn't uncommon to see numerous Secret Service agents around the place, as President Richard M. Nixon and his friend Beebe Rebozo were frequent guests. At the time, Nixon's home on Key Biscayne was being remodeled. You may recall that this was a time when Nixon's aides, were busy covering up the Administration's connection with the Plumbers' break-in at the Watergate and their other illegal activities, such as wire tapping Nixon's 'enemies.'"