Teledyne, Inc.

views updated May 18 2018

Teledyne, Inc.

1901 Avenue of the Stars
Los Angeles, California 90067
U.S.A.
(213)277-3311

Public Company
Incorporated: 1960
Employees: 47,200
Sales: $3.241 billion
Market Value: $3.902 billion
Stock Index: New York

It is fitting that Teledyne has located its corporate headquarter’s on Avenue of the Stars. During the early 1960’s, the company rose out of nowhere to achieve success in the semiconductor business. In five years the company reached Fortune 500 proportions, and was recognized as the fastest growing high-technological conglomerate in the United States. However, as Teledyne diversified into other areas it began to lose some of the success it garnered during its early years.

Ever since he was a boy Henry A. Singleton wanted to build a large corporation, “a company like GM, AT&T, Dupont—I want to build a company like that.” In 1960, after earning three degrees from MIT and rising to vicepresident and general manager of Litton, Singleton decided the time was right. He quite his $35,000 a year job in order to establish his own company. He convinced his assistant and old friend, George Kozmetsky, who had earned a doctor of commercial science from Harvard, to join him in a new business venture.

Singleton, who in five years had increased Litton’s electronics equipment division to $80 million in sales, decided that success lay in the semiconductor business. Despite an already crowded market, he nevertheless believed that producing semiconductors, the “basic building block of electronics,” would lead to other high technological and high growth inventions.

Singleton and Kozmetsky, using the money they earned from their Litton stock options, each invested $225,000 to start their business. Singleton became chairman and president of the company they named Teledyne, and Kozmetsky became executive vice-president. Their hightechnological background and innovative ideas quickly paid off. The company achieved first year sales of $4.5 million and employed nearly 450 people. Second year sales of $10.5 million confirmed their success.

Sales continued on an upward trend when the company embarked on a series of acquisitions, first in electronics and then in geophysics, to increase the company’s strength in businesses related to semiconductors. In 1966 Teledyne bought Vasco Metals Corporation, which started a third wave of acquisitions, specialty metals. Vasco, with sales of $43 million, specialized in titanium, molybdenum, beryllium, and vanadium alloys.

By the end of that year Teledyne, with sales three times that of the previous year, broke into the Fortune 500 ranking. Teledyne’s sales of over $256 million ranked it 293.

In 1967 Teledyne seemed headed for even more success. Teledyne’s 16,000 employees were busily making microelectronic integrated circuits, microwave tubes, aircraft instruments, miniature television camera transmitters, hydraulic systems, computers, seismic measuring devices, specialty alloys, and a large variety of other sophisticated products. Singleton’s and Kozmetsky’s personal worth had prospered along with the company, reaching $30 million.

More good news arrived when the company bested IBM and Texas Instruments in a government contract contest and became the prime contractor for the development of the Integrated Helicopter Avionics System (IHAS). The IHAS was a helicopter control system that used computers to provide the “precise navigation, formation flight, terrain following, and fire control” in virtually any kind of weather. Also that year, in a move Business Week magazine called a “coup,” Teledyne purchased the Wah Chang Corporation, a leading producer of tungsten and columbkum, and the world’s producer of hafnium, zirconium, and other exotic metals.

To increase the company’s assets and provide it with leverage if management decided to look for new capital to buy more companies, Teledyne moved into the insurance business by purchasing 21% of United Insurance Company for $40 a share.

In 1969 Teledyne’s sales surpassed the billion dollar mark. The company subsequently stopped its aggressive acquisition program and paid off its short term debts. Wall Street analysts predicted that the acquisition phase was over and that Singleton was turning Teledyne into an operating company. Generally, however, Teledyne’s financial condition was quite strong. For the ten years previous to 1971, the company led the Fortune 500 ranking in earnings and earnings per share growth. And in the early 1970’s, while many conglomerates were experiencing financial difficulties, Teledyne’s weathered the recession. Sales increased somewhat with inflation, but net profits remained near $60 million.

In 1972, Argonaut, one of Teledyne’s six financial companies, decided to expand from the worker’s compensation field into the medical malpractice insurance business. At the same time, the frequency and size of malpractice claims were growing, but premiums didn’t keep pace. By 1974 Argonaut took a $104 million pretax writeoff, resulting in a $31.2 million net loss in insurance operations and a reduction of Teledyne’s net profit for the year to $31.5 million. Nine of Argonauts 11 top officers were fired, and Singleton began running the operations from headquarters in Los Angeles. Argonaut, one of the last large companies in the malpractice market, discontinued underwriting individual policies for the 20,000 physicians it covered. It continued to offer coverage to the 25% of the nation’s hospitals it covered, but at higher rates and covering fewer risks. In the meantime, the company collected $170 million in reserves against malpractice cases.

Teledyne’s problems were compounded in 1973 when the consumer products division lost $1.8 million, mostly because of its Packard-Bell television production unit which had failed to capture a large enough share of the west cost television market. Teledyne reduced production and narrowed the loss to half a million the next year.

With the insurance unit and consumer unit problems solved, Teledyne’s outlook had improved markedly. Net income soared to $101.7 million on sales of $1.71 billion. The largest share of profit came from industrial products such as diesel and gasoline engines and machine tools. Insurance operations had improved and were contributing $19 million. The consumer products division showed a healthy profit of $13.1 million because of Water Pik, which had sold a million shower heads at $25 to $40 each. The closing of the Packard Bell television unit had little effect on earnings since it was accomplished so successfully that no final writedown was taken.

In 1976 the company attempted, for the sixth time since 1972, to buy back its in stock in order to eliminate the possibility of a takeover attempt by someone eager for the cash reserves the company had accumulated. Altogether, the company spent $450 million buying back its stock, leaving $12 million outstanding, compared to $37.4 million at the close of 1972. With many of the company’s divisions showing stronger results and fewer shares outstanding, Teledyne’s stock increased from a low of $9.50 the year before to $45, becoming the largest gainer on the New York Stock Exchange and overcoming its traditional unpopularity with investors since Singleton refused to pay a cash dividend (instead he offered a 3% stock dividend). Singleton wasn’t content to buy back his own stock though. That same year Teledyne purchased 12% of Litton’s stock, becoming the company’s largest shareholder.

By 1978 Singleton’s strategy of bringing in new management to replace underachievers appeared to be working. Only one of the 130 profit centers into which the company was divided was losing money. Without a single acquisition, company sales had soared to $2.2 billion, the result of internal growth at annual rate of 7%. Nearly all of Teledyne’s units were reporting continued growth and strong positioning in the market place. Sales from the company’s offshore drilling rig had grown to $80 million from $10 million in 1966. Water Pik’s sales reached $130 million, up from eight million in 1966. Teledyne had also become an important producer of specialty metal. Allvac, which vacuum-melts metals, had surpassed $40 million in sales compared with $1.5 million in 1964. Even tiny Merla Manufacturing, purchased for only $80,000 with monthly sales of $30,000 had grown to $7 million. Chang had grown from near bankruptcy in 1967 to over $100 million in 1977. And Packard Bell’s business was greater than when it sold televisions.

In the meantime, over a two year period, Singleton took advantage of the company’s regained financial strength and used $400 million of the company’s earnings to purchase surprisingly large stakes in 11 companies. By 1978, through Teledyne, Singleton had gained effective control of six companies, owning 22% of Litton’s common stock, 28.5% of Curtiss-Wright, nearly 20% of Walter Kidde, 22% of Brockway Glass, and 20% of Reichhold Chemicals. In addition, he purchased 8% of GAP, 5.5% of Rexnord, 7% of Federal Paper Board, 5% of Colt Industries, and 8% of Eltra.

Most of money for the purchases was funneled through Unicoa and Argonaut. Almost all insurance companies keep some of their assets in stock, but most have stock holdings less than their net worth. Argonaut, on the other hand, had accumulated seven times its net worth in stock holdings, which is very unusual in the insurance business. Singleton’s action quickly caught the attention of the business press and of the management of the companies whose stock he purchased. Rumors abounded about his possible intentions, some of which speculated that he wanted to merge the companies into Teledyne, particularly his former employer, Litton.

In the end, the merger attempts never materialized. However, it was soon apparent that what Singleton had actually purchased were a number of difficulties. As earnings were being channeled into the stock market, Teledyne was putting only 1.5% of manufacturing sales back into research and development and plant and equipment maintainance, more than 25% below the average industry investment. Manufacturing operations, cut off from corporate resources, started to lose competitiveness. As a result, Teledyne’s divisions lost market shares, contracts, and technological advantages.

One of the worst problems the company was confronted with occurred in 1980. Until then, its Continental Motors division in Muskegon, Michigan supplied diesel engines to all U.S. military tanks, an important contributor to Teledyne’s earnings. When the turbine-powered Ml was introduced that year, however, Continental was relegated to the replacement-engine market for existing tanks.

In 1981 the insurance operations, which contributed 25% of Teledyne’s total revenue, were once again in trouble. The units, which were not performing well within their industry, lost $79.2 million before taxes.

The stock portfolio, which had been built up at the expense of the rest of the company, was also in trouble during 1982. Overall, Teledyne’s stock portfolios had dropped $380 million during the previous year. That unreported loss almost matched the company’s earnings of $412 million on sales of $4.3 billion. Part of Teledyne’s stock problems were due to its 16% investment in International Harvester, which over the previous year and a half had lost $100 million on paper.

The manufacturing plants and service companies continued to perform poorly in several important markets. Water Pik was showing a profit, but only by reducing product development, advertising and marketing expenditures drastically. And Ryan Aeronautical, formerly the premier producer of robot aircraft used for military target practice and reconnaissance, lost most of its market share. Ryan’s Firebee model controlled 75% of market in the early 1970’s. However, Teledyne’s emphasis on accumulating cash opened the field to more innovative competitors. Northrop Corporation, for instance, introduced less expensive and easier to launch alternatives that used sophisticated electronics to match the Firebee’s capabilities.

With the company financially weakened, Teledyne management appeared to adopt a more aggressive strategy in 1982 by making its first large acquisition bid in 13 years. Continental tried to purchase Chrysler’s tank division, which was the prime contractor for the M-1 tank. However, General Dynamics Corporation won the bid with a $336 million offer, exceeding Teledyne’s offer by $36 million. According to Business Week, Pentagon officials were relieved that Continental lost the bid because they considered Continental to be “stagnating.”

In 1983 Teledyne’s sales fell from $3.24 billion to $2.86 billion, while net profit fell 37% to $248.7 million. That same year, Teledyne took a $49.1 million dollar write down on its stake in GAF, and in December of 1985 Teledyne sold its 6.7% share in GAF.

Wall Street analysts have no doubts that Teledyne can survive its current problems. However, they have also made it clear that Teledyne must narrow its corporate focus. If Teledyne is to remain an important hightechnology focus, it must return to improving its primary high-technology businesses and refrain from expending its resources in accumulating a large stock portfolio.

Principal Subsidiaries

Teledyne Industries, Inc.; Argonaut Insurance Co.; Teledyne Exploration Co.; Teledyne Isotopes, Inc.; Teledyne Life Insurance Co.; Trinity Universal Insurance Co.; Unicoa Corp. (98.4%).

International Directory of Company Histories

Teledyne, Inc.

views updated May 14 2018

Teledyne, Inc.

1901 Avenue of the Stars
Los Angeles, CA 90067
U.S.A.
(310) 277-3311
Fax: (310) 551-4365

Public Company
Incorporated: 1960
Employees: 21,000
Revenues: $2.4 billion
Stock Exchange: New York
SICs: 3724 Aircraft Engines and Engine Parts; 3812 Search, Detection, Navigation, Guidance, Aeronautical, and Nautical Systems and Instruments

Teledyne is a diversified manufacturing corporation with 21 operating companies focused in four business sectors, including aviation and electronics, specialty metals, industrial manufacturing, and consumer products. Within these four areas, the company’s product lines range from electronic warfare systems to commercial uses of zirconium, and from machine tools to Water Pik shower massages. Unfortunately for Teledyne, however, from the late 1980s onward the company has been at the center of a legal maelstrom and burdened with shareholder lawsuits, whistle-blowing revelations in its defense business, and allegations that it has cheated on government contracts.

Ever since he was a boy Henry A. Singleton wanted to build a large corporation: “A company like GM, AT&T, Dupont—I want to build a company like that,” he would say. In 1960, after earning three degrees from MIT and rising to vice-president and general manager of Litton, Singleton decided the time was right. He quit his $35,000 a year job and convinced his assistant and old friend, George Kozmetsky, who had earned a doctor of commercial science from Harvard, to join him in a new business venture.

Singleton, who in five years had helped raise Litton Industries Incorporated’s electronics equipment division to $80 million in sales, decided that success lay in the semiconductor business. Despite an already crowded market, he nevertheless believed that producing semiconductors, the “basic building block of electronics,” would lead to other high-technology and high-growth inventions.

Using the money they earned from their Litton stock options, Singleton and Kozmetsky each invested $225,000 to start their business. Singleton became chairman and president of the company they named Teledyne, and Kozmetsky became executive vice-president. Their backgrounds in high-technology and innovative ideas quickly paid off. The company achieved first year sales of $4.5 million and employed nearly 450 people. Second year sales of $10.5 million confirmed their success. Sales continued on an upward trend when the company embarked on a series of acquisitions, first in electronics and then in geophysics, to increase the company’s strength in businesses related to semiconductors. In 1966 Teledyne bought Vasco Metals Corporation, which started a third wave of acquisitions, in specialty metals. Vasco, with sales of $43 million, specialized in titanium, molybdenum, beryllium, and vanadium alloys.

Later that year Kozmetsky, whose 130,000 shares of Teledyne were by then worth well over $20 million, retired from the company to become dean of the College of Business Administration at the University of Texas. George A. Roberts, formerly president of Vasco, replaced him as president of Teledyne. Singleton continued on as chairman and chief executive officer. By the end of 1966 Teledyne broke into the 293rd spot on the Fortune 500 ranking with sales of more than $256 million— nearly triple the total of just one year before.

In 1967 Teledyne continued its impressive growth. The company’s 16,000 employees were busily making microelectronic integrated circuits, microwave tubes, aircraft instruments, miniature television camera transmitters, hydraulic systems, computers, seismic measuring devices, specialty alloys, and a large variety of other sophisticated products. More good news arrived when the company bettered IBM and Texas Instruments in a government defense contract contest and became the prime contractor for the development of the Integrated Helicopter Avionics System (IHAS). The IHAS was a helicopter control system that used computers to provide the “precise navigation, formation flight, terrain following, and fire control” in virtually any kind of weather. Also that year, in a move Business Week magazine called a “coup,” Teledyne purchased the Wah Chang Corporation, a leading producer of tungsten and columbium, and the world’s top producer of hafnium, zirconium, and other exotic metals. And, to increase the company’s assets and provide it with more leverage for future acquisitions, Teledyne moved into the insurance business by purchasing 21 percent of United Insurance Company for $40 a share.

In 1969 Teledyne’s sales surpassed the $1 billion mark. The company subsequently stopped its aggressive acquisition program and paid off its short term debts. Wall Street analysts predicted that the acquisition phase was over and that Singleton was turning Teledyne into an operating company. Teledyne’s financial condition was quite strong. For the ten years previous to 1971, the company led the Fortune 500 ranking in earnings and earnings per share growth. And in the early 1970’s, while many conglomerates were experiencing financial difficulties, Teledyne weathered the recession well. Sales increased somewhat with inflation, but net profits remained near $60 million.

In 1972, Argonaut, one of Teledyne’s six financial companies, decided to expand from the worker’s compensation field into the medical malpractice insurance business. At the same time, the frequency and size of malpractice claims were growing— but premiums didn’t keep pace. By 1974 Argonaut took a $104 million pretax writeoff, resulting in a $31.2 million net loss in insurance operations and a reduction of Teledyne’s net profit for the year to $31.5 million. Nine of Argonaut’s 11 top officers were fired, and Singleton began running the operations from headquarters in Los Angeles. Argonaut, one of the last large companies in the malpractice market, discontinued underwriting individual policies for the 20,000 physicians it covered. It continued to offer coverage to the 25 percent of the nation’s hospitals it covered, but at higher rates and covering fewer risks. In the meantime, the company collected $170 million in reserves against malpractice cases.

Teledyne’s problems were compounded in 1973 when the consumer products division lost $1.8 million, mostly because of its Packard-Bell television production unit’s failure to capture a large enough share of the West Coast television market. Tele-dyne reduced production and narrowed the loss to $500,000 the next year.

With the insurance unit and consumer unit problems solved, Teledyne’s outlook had improved markedly. Net income soared to $101.7 million on sales of $1.71 billion in 1974. The largest share of profit came from industrial products such as diesel and gasoline engines and machine tools. Insurance operations had improved and were contributing $19 million. The consumer products division showed a healthy profit of $13.1 million because of Water Pik, which had sold a million shower heads at $25 to $40 each. The closing of the Packard Bell television unit had little effect on earnings; it was accomplished so successfully that no final writedown was taken.

In 1976 the company attempted, for the sixth time since 1972, to buy back its stock in order to eliminate the possibility of a takeover attempt by someone eager for the cash reserves the company had accumulated. Altogether, Teledyne spent $450 million buying back its stock, leaving $12 million outstanding, compared to $37.4 million at the close of 1972. With many of the company’s divisions showing stronger results and fewer shares outstanding, Teledyne’s stock increased from a low of $9.50 per share to $45 per share, becoming the largest gainer on the New York Stock Exchange. Singleton wasn’t content to buy back his own stock, however. Teledyne then purchased 12 percent of Litton’s stock, becoming that company’s largest shareholder.

By 1978 Singleton’s strategy of bringing in new management to replace underachievers appeared to be working. Only one of the 130 profit centers into which the company was divided was losing money. Without a single acquisition, company sales had soared to $2.2 billion, the result of internal growth at an annual rate of 7 percent. Nearly all of Teledyne’s units were reporting continued growth and strong positioning in the marketplace. Sales from the company’s offshore drilling rig had grown to $80 million from $10 million in 1966. Water Pik’s sales reached $130 million, up from $8 million in 1966. Teledyne had also become an important producer of specialty metal. All vac, which vacuum-melts metals, had surpassed $40 million in sales compared with $1.5 million in 1964. And Merla Manufacturing, purchased for only $80,000 with monthly sales of $30,000, had grown to $7 million in sales. Chang had grown from near bankruptcy in 1967 to over $100 million in sales in 1977. And Packard Bell’s business was greater than when it sold televisions.

In the meantime, over a two-year period, Singleton took advantage of the company’s regained financial strength and used $400 million of the company’s earnings to purchase surprisingly large stakes in 11 companies. By 1978, through Teledyne, Singleton had gained effective control of six companies, owning 22 percent of Litton’s common stock, 28.5 percent of Curtiss-Wright, nearly 20 percent of Walter Kidde, 22 percent of Brockway Glass, and 20 percent of Reichhold Chemicals. In addition, he purchased eight percent of GAP, 5.5 percent of Rexnord, seven percent of Federal Paper Board, five percent of Colt Industries, and eight percent of Eltra.

Most of the money for these purchases was funneled through Unicoa and Argonaut. Almost all insurance companies keep some of their assets in stock, but most have stock holdings less than their net worth. Argonaut, on the other hand, had accumulated seven times its net worth in stock holdings, which is very unusual in the insurance business. Singleton’s action quickly caught the attention of the business press and of the management of the companies whose stock he purchased. Rumors abounded about his possible intentions, some of which speculated that he wanted to merge the companies into Teledyne, particularly his former employer, Litton.

In the end, the merger attempts never materialized. What soon became apparent was that Singleton had actually purchased a number of difficulties. As earnings were being channeled into the stock market, Teledyne was putting only 1.5 percent of manufacturing sales back into research and development and plant and equipment maintenance, more than 25 percent below the average industry investment. Manufacturing operations, cut off from corporate resources, started to lose competitiveness. As a result, Teledyne’s divisions lost market shares, contracts, and technological advantages.

One of the worst problems the company was confronted with occurred in 1980. Until then, its Continental Motors division in Muskegon, Michigan, supplied diesel engines to all U.S. military tanks, an important contributor to Teledyne’s earnings. When the turbine-powered Ml was introduced that year, however, Continental was relegated to the replacement-engine market for existing tanks.

In addition, Wah Chang, which had once enjoyed a virtual monopoly on the free-world production of zirconium, a crucial metal in building nuclear reactors, had lost a large portion of its market share to French companies, which controlled 40 percent of the market. And Westinghouse Electric Corporation’s completion of a new plant threatened to reduce Chang’s market share to less than half of the $150 million free-world output. In 1981 the insurance operations, which contributed 25 percent of Teledyne’s total revenue, were once again in trouble. These companies, which were not performing well within their industry, lost $79.2 million before taxes.

The stock portfolio, which had been built up at the expense of the rest of the company, was also in trouble during 1982. Overall, Teledyne’s stock portfolios had dropped $380 million during the previous year. That unreported loss almost matched the company’s earnings of $412 million on sales of $4.3 billion. Part of Teledyne’s stock problems were due to its 16 percent investment in International Harvester, which over the previous year and a half had lost $100 million on paper.

The manufacturing plants and service companies continued to perform poorly in several important markets. Water Pik was showing a profit, but only by reducing product development, advertising, and marketing expenditures drastically. And Ryan Aeronautical, formerly the premier producer of robot aircraft used for military target practice and reconnaissance, lost most of its market share. Ryan’s Firebee model controlled 75 percent of the market in the early 1970’s, but Teledyne’s emphasis on accumulating cash opened the field to more innovative competitors. Northrop Corporation, for instance, introduced less expensive and easier to launch alternatives that used sophisticated electronics to match the Firebee’s capabilities.

With the company financially weakened, Teledyne management appeared to adopt a more aggressive strategy in 1982 by making its first large acquisition bid in 13 years. Continental tried to purchase Chrysler’s tank division, which was the prime contractor for the M-1 tank. However, General Dynamics Corporation won the bid with a $336 million offer, exceeding Teledyne’s offer by $36 million. According to Business Week, Pentagon officials were relieved that Continental lost the bid because they considered Continental to be “stagnating.”

In 1983 Teledyne’s sales fell from $3.24 billion to $2.86 billion, while net profit fell 37 percent to $248.7 million. That same year, Teledyne took a $49.1 million loss on its stake in GAF, and in December of 1985 Teledyne sold its 6.7 percent share in GAF.

With Teledyne’s financial troubles fully apparent, discord also began to appear in management. High level executives complained increasingly that Singleton, who once claimed to have no specific business plan for the company, was only involved in management when problems developed. Due to the rumbling in management ranks, and because he was increasingly out of touch with the demands of strategic corporate planning, Singleton remained chairman but handed over the day-to-day management operations to George Roberts in 1986. Roberts, formerly the head of Vasco Metals and part of the company’s specialty metals business, jumped in as chief executive officer and attempted to right Teledyne’s financial difficulties.

Teledyne seemed to rebound almost immediately under Roberts’ leadership. In 1986 the company spun off Argonaut Insurance and began to divest some of the numerous operations it had acquired over the previous 15 years. By 1988, Teledyne was back on track when it reported a profit of $392 million on revenues of $4.5 billion—an impressive return on equity of nearly 20 percent. In 1990, the company spun off its Unitrin insurance group to shareholders and then disposed of its industrial rubber and oilfield equipment units. Even though the employee payroll had been reduced from 43,000 to 24,000, Roberts was a long way from completing the company’s restructuring. In 1991, he announced that Teledyne planned to either close or sell 24 of its facilities.

Mounting legal problems, however, began at this stage to undermine the company’s reputation, reduce profits, and interfere with its restructuring strategy. Numerous lawsuits were filed against Teledyne, including accusations of falsifying test results on missile relays, selling defective equipment, lying to cover up commissions on sales of military goods to Taiwan, and bribing both Saudi Arabian and Egyptian officials to procure contracts. Due to a U.S. government investigation into its Relays Division, the company was temporarily prohibited from bidding for any government contracts. Although Teledyne denied most of these charges, the sheer number of them indicated something was wrong with company management.

While continuing his plans to restructure the company, Roberts also began to deal straightforwardly with Teledyne’s legal woes. Since 1992, Teledyne has pleaded guilty to many accusations cited in the lawsuits brought against it, and has paid nearly $30 million to settle charges. The settlement of a federal probe into its Relays Division significantly reduced profits in 1992, but management thought this move was necessary because the U.S. government accounted for more than one-third of Teledyne’s business that year. In short, Teledyne didn’t want to take any chances of losing any future government contracts, especially with the economic upheaval in the defense industry signaled by the end of the Cold War.

In 1993, Roberts retired and was replaced by William P. Rutledge. The new chairman and chief executive officer was from FMC Corporation and had worked at Teledyne in specialty metals since 1986. Rutledge brought in Donald Rice, a former secretary of the U.S. Air Force, to serve as president and chief operating officer. Immediately, the two men set out to repair Teledyne’s damaged reputation. While Rutledge began to speed up the final phases of Teledyne’s restructuring, ice supervised the company’s internal probe of ethical compliance. Under Rutledge and Rice, Teledyne’s operations were consolidated from 65 units into 21 companies, reduced from a high of 130 in 1990. Wholesale layoffs of 1,200 executives followed, which brought the payroll down to almost 22,000.

Going into the middle 1990s, forecasts by Wall Street analysts for Teledyne’s consumer products line, commercial use of specialty metals, industrial factory systems, and aviation electronics were very positive, as were conjectures that Teledyne could survive its legal problems. They also warned that Teledyne must repair its reputation, restore its credibility, and narrow its corporate focus. If Teledyne is to remain a successful high-technology manufacturer in the post-Cold War era, especially as competition for government contracts becomes more intense, the company must overcome both the business and ethical problems of its recent past.