ITT Corporation
| ITT Corporation | |
|---|---|
| Type | Public (NYSE: ITT) |
| Founded | 1995[1] |
| Headquarters | White Plains, NY |
| Industry | Defense |
| Website | www.itt.com |
ITT Corporation, NYSE: ITT is a large American manufacturing company with 2006 revenues of $7.8 billion. ITT is a leading U.S. defense contractor and the world's largest supplier of equipment to move and treat water and wastewater.
The "mother company" was founded in 1920 as International Telephone & Telegraph. During the 1960s and 1970s, under the leadership of then-CEO Harold Geneen the company rose to prominence as the archetypal conglomerate, deriving its growth from hundreds of acquisitions in diversified industries. ITT divested its telecommunications assets in 1986, and in 1995 spun-off its non-manufacturing divisions, later to be purchased by Starwood Hotels & Resorts Worldwide.
Between 1996 and 2006, the current company was known as ITT Industries, Inc.
History
ITT was formed in 1920, as the Puerto Rico Telephone Company by Sosthenes Behn.[2] Its first major expansion was in 1923 when it consolidated the Spanish Telecoms market into what is now Telefónica.[3] From 1922 to 1925 it purchased a number of European telephone companies. In 1925 it purchased Bell Telephone Manufacturing company in Belgium, which was formerly affiliated with AT&T. In the 1930s, ITT grew through purchasing German electronic companies Standard Elektrizitaetsgesellschaft and Mix & Genest, both of which were internationally active companies.
Nazi involvement
According to Anthony Sampson's book "The Sovereign State of ITT," one of the first American businessmen Hitler received after taking power in 1933 was Sosthenes Behn, then the CEO of ITT and his German representative, Henry Mann. Antony C. Sutton, in his book "Wall Street and the Rise of Hitler", makes the claim that ITT subsidiaries made cash payments to S.S. leader Heinrich Himmler.
ITT, through its subsidiary The Lorenz Company, owned 25% of Focke-Wulf, the German aircraft manufacturer, builder of some of the most successful Luftwaffe fighter aircraft. In addition, Sutton’s book uncovers that ITT owned Huth and Company, G.m.b.H. of Berlin, which made radio and radar parts that were used in equipment going to the German Armed Forces.
Post-war
In 1951, ITT purchased Philo Farnsworth's television company to break into the market. At that time Farnsworth was also developing the Fusor. Also in 1951, ITT bought a majority interest in the
International telecommunications
International telecommunications manufacturing subsidiaries included STC in Britain, SEL in Germany, BTM in Belgium, and CGCT and LMT in France. Alec Reeves discovered Pulse-code modulation (PCM), upon which all future digital voice communication was based. These companies manufactured equipment according to ITT designs including the (1960s) Pentaconta crossbar switch and (1970s) Metaconta D, L and 10c Stored Program Control exchanges, mostly for sale to their respective national telephone administrations. This equipment was also produced under license in Poznan (Poland), in Yugoslavia, and elsewhere. ITT was the largest owner of the LM Ericsson company in Sweden but sold out in 1960.
Harold Geneen appointment
In 1959 Harold Geneen was elected as CEO. Using leveraged buyouts, he turned the minor building of the 1950s into a major force during the 1960s. In 1963, ITT attempted to purchase the television network ABC for $700 million. The deal was halted by federal antitrust regulators who feared ITT was growing too large. In order to continue growing while not running afoul of antitrust legislation, it moved to acquire companies outside of the telecommunications industry. Under Geneen, ITT bought over 300 companies in the 1960s, including some hostile takeovers. The deals included well-known businesses like the Sheraton Hotel chain, Wonder Bread maker Continental Baking, The Hartford insurance company, and Avis Rent-a-Car. ITT also absorbed smaller operations in auto parts, energy, books, semiconductors and cosmetics. In 1966, ITT acquired Educational Services, Inc., an operator of for-profit schools, which became ITT/ESI.
ITT's sales grew from about $700 million in 1960 to about $8 billion in 1970, and its profit from $29 million to $550 million. However, when the higher interest rates started eating away at profits in the late 1960s, ITT's growth slowed considerably.
In the late 1960s, the British electronics manufacturer Kolster-Brandes, KB for short, had run into trouble with its color television manufacturing, and turned to ITT for help; ITT bought out the company, and for a while, U.K. products were badged "ITT KB" then eventually just ITT. By the late 1970s, ITT had a good presence on the U.K. domestic electrical market in television, audio and portable radio products.
In 1970 ITT owned of 70% of Chitelco, the Chilean Telephone Company and funded El Mercurio, a Chilean right-wing newspaper. Declassified documents released by the CIA in 2000 suggest that ITT financially helped opponents of Salvador Allende's government prepare a military coup (National Security Archives). On September 28, 1973, ITT's headquarters in New York City, New York, was bombed by protesters for alleged involvement in the overthrow of the democratically elected and emerging socialist government in Chile.
In 1972 newspaper columnist Jack Anderson disclosed a memo of ITT's Washington lobbyist, Dita Beard, which revealed a relationship between ITT's providing funds for the Republican National Convention and a Justice Department settlement of an antitrust suit favorable to ITT.[4]
Geneen remained CEO of ITT until 1977 while many conglomerates had removed their CEOs due to lack of profits. His successor, Rand Araskog, dismantled much of ITT, selling most of its holdings, including the last of ITT's telecommunications businesses.
The business historian Robert Sobel published ITT: The Management of Opportunity in 1982.
The song "International Thief Thief" by Fela Kuti documents the alleged corruption and meddling of the company in Nigerian politics.
Breakup
In 1989, ITT sold all international telecommunications products business to Alcatel, now Alcatel-Lucent. ITT Kellogg was also part of the 1989 sale to Alcatel. The company was then sold to
private investors in the U.S. and went by the name Cortelco Kellogg. Today the company is known as
In 1995, ITT Corporation split into 3 separate public companies:
- ITT Corp. — In 1997, ITT Corp. completed a merger with
Starwood Hotels & Resorts Worldwide , selling off its non-hotel and resorts business. By 1999, ITT completely divested from ITT/ESI; however, the schools still operate as ITT Technical Institute using the ITT name under license.[1] Also in 1999, ITT Corp. dropped the ITT name in favor of Starwood.[2] - ITT Hartford (insurance) — Today ITT Hartford is still a major insurance company although it has dropped the ITT from its name altogether. The company is now known as The Hartford Financial Services Group, Inc.
- ITT Industries — ITT operated under this name until 2006 and is a major manufacturing and defense contractor businesses.
Criminal prosecution
In March of 2007, ITT Corporation became the first major defense contractor to be convicted
for criminal violation of the Arms Export
Control Act. The fines resulted from ITT's outsourcing program, in which they
transferred night vision goggles and
In its investigation and subsequent ruling the DOJ found that the corporation went to significant lengths to circumvent rules regarding the exports including setting up a front corporation. According to U.S. Attorney John Brownlee the company fought the investigation in order "to essentially run out the clock on the statute of limitations." [7]
Purchase of EDO
An agreement was reached September 18 2007 with the EDO Corporation. ITT will buy EDO for $1.7 billion.[8]
Headquarters
- 1330 Avenue of the Americas in New York City, New York which was ITT's corporate headquarters prior to its merger with Starwood Hotels & Resorts was originally owned by the ABC Television Network which ITT attempted to acquire in 1963. After a financial downturn, ABC moved out of the building traditionally known as "Brown Rock" and sold it to a Japanese conglomerate which then in turn leased a good portion out to ITT Corporation.
Further reading
- Sobel, Robert (1982). ITT: The Management of Opportunity. New York: Times Books. ISBN 99925-2-968-7.
- Sobel, Robert (1999). The Rise and Fall of the Conglomerate Kings. New York: Beard Books. ISBN 1-89312-247-6.
- Sampson, Anthony (1972). The Sovereign State—The Secret History of ITT. London: Hodder and Stoughton. ISBN 0-340-17195-2.
- Sutton, Anthony (1996). Wall Street & the Rise of Hitler. New York: Buccaneer Books. ISBN 1-56849-726-1.
- Araskog, Rand (2000). The ITT Wars: An Insider's View of Hostile Takeovers. New York: Beard Books. ISBN 1-89312-238-7.
External links
- ITT Corporation
- Cortelco
- Antony C. Sutton book Wall Street and the Rise of Hitler Chapter 5
- Nazi Involvement
Notes
- ^ The company currently named ITT Corporation incorporated in Indiana
in 1995 as ITT Industries, Inc., a spinoff of ITT Corporation, which was first incorporated in 1920
as International Telephone & Telegraph, and in 1983 changed its name to ITT Corporation, later purchased by
Starwood Hotels and Resorts . In 2006, ITT Industries, Inc. changed its name to ITT Corporation. - ^ Puerto Rico Telephone Company
- ^ Sampson,Anthony:The Sovereign State of ITT, Hodder and Stoughton, 1973
- ^ http://www.trivia-library.com/a/united-states-and-american-history-1972.htm
- ^ http://biz.yahoo.com/ap/070327/itt_fine.html?.v=3 "ITT Fined $100M for Illegal Tech Exports" Tuesday March 27, 8:44 pm ET; Sue Lindsey, Associated Press Writer
- ^ http://www.theregister.co.uk/2007/03/27/itt_fined_for_illegal_exports/ "ITT Fined for Illegal Exports" Tuesday March 27, The Register; Drew Cullen
- ^ http://money.cnn.com/2007/03/27/news/international/itt_export/index.htm?postversion=2007032713
- ^ http://www.defenseindustrydaily.com/itt-corp-acquires-edo-in-17b-deal-03817/
This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)
