Baby

Sale

Carefully worded "merger" announcements befogged and nearly obscured the real news: Cleveland's famed William S. Jack and Ralph M. Heintz had sold out their wildly unorthodox war baby.

On a $100,000 investment, Jack & Heintz, Inc., piled up wartime profits of $6 million (after taxes) by making high-quality plane parts for the Army & Navy. It also piled up heaps of news clips by jubilantly giving "associates" (i.e., employes) huge bonuses, free lunches, soft music, Turkish baths, Florida vacations. But the end of the war and the dry-up of the U.S. Government's golden flood was almost the end of Jahco.

When blatant, sport-shirted President Bill Jack and quiet Vice President Ralph Heintz picked up the pieces, they found that Jahco's prime remaining asset was its ballyhooed name. What to do? Announcement No. 1 gave the first step: Jahco had "merged" with "Precision Products Corp." to form Jack & Heintz Precision Industries, Inc. Bill Jack, keeping a straight face behind the impressive whiskers of the new company's board chairmanship, labeled this "the first step in a postwar expansion program."

Answer Man. Announcement No. 2 came out last week: Jack & Heintz Precision Industries would soon merge with Eisemann Corp., Brooklyn magneto makers. But it was only half the story. The rest was told by a man named Benjamin Charles Milner, Jr. a Manhattan engineer turned financier.

Whey-faced "B.C." Milner, 55, headed an eastern investment syndicate which had set up Precision Products Corp. It was a paper organization setup for one purpose: to buy out Jahco as quickly as possible. Through the "merger" device, the syndicate kept the valuable Jack & Heintz name intact--and also managed to convey the general impression that Bill Jack and Ralph Heintz were still very much in charge.

Actually the two Clevelanders, sole owners of Jahco's common stock, had sold it all to the new company for $8 million ($5 million in cash, $3 million in preferred stock), no longer had any voting control in Jack & Heintz. Despite the chairmanship title given to Bill Jack, and the $40,000-a-year lifetime jobs promised to him and Heintz, his boss was now President B. C. Milner.

Milner had big plans for the new Jack & Heintz. First objective was completion of the merger--a real one this time--with Eisemann Corp., once the No. 1 U.S. magneto maker. Eisemann's ready-made distribution organization of 700 outlets would come in mighty handy once Jack & Heintz started rolling out such products as motors, engine parts, gages, ball bearings, for which, said Milner, $18 million worth of orders were already on hand.

The new owners, readying a new public stock issue, planned no wholesale changes in the unique personnel policies instituted by Bill Jack. But they definitely planned to put Jack himself under wraps, go conventional on public relations. Rasped B.C.: "One of the most unfortunate things in Jahco was its having Bill Jack as public relations man." Nothing was said of the fact that this "unfortunate thing" was one big element in making the Jahco baby so good a buy for Milner and friends, a nice sale for partners Jack & Heintz.

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