Purposeful Hodgepodge

At first glance it seems a monument to absent-mindedness--a potpourri of unrelated products from bread-bagging machines to rocket launchers, all stuffed improbably under the wing of one of the nation's most anonymous corporate giants. But FMC Corp. of San Jose, Calif., is no happenstance hodgepodge. It is a carefully laid industrial mosaic that since 1950 has run up an enviable record of twelve consecutive yearly increases in both sales and profits. Last year sales of FMC's 14 divisions soared to $415 million; in the first half of this year they climbed another 32%. The investor who owned FMC stock worth $4 a share in 1932 would find it worth $644 today.

Some Can't Keep Up. The enviable fortunes of FMC have been shaped almost singlehanded by one man: leathery, indefatigable Chairman Paul Lewis Davies. 63, who keeps the company and its officers moving at such a frenetic pace that one Davies aide resigned after two years to take a less prestigious job, complaining wearily, 'I didn't think I could stand it another minute." Paul Davies was only 28. but already vice president of a San Francisco bank, when he signed on in 1928 as financial boss of his father-in-law's John Bean Manufacturing Co., a small producer of agricultural spray pumps and prune-drying equipment. Almost immediately, he launched the company--which in 1929 was rechristened Food Machinery Corp.* on a course of pell-mell expansion, which he is fond of calling "aggressive diversification.'' One after another. Davies added new lines of farm machinery, food processing and packaging equipment and agricultural chemicals. In 1948, branching out still farther, he acquired New York's Westvaco Chemical Corp.. which with other acquisitions has since grown into an industrial chemicals business that last year accounted for $120 million of FMC's sales.

Each new venture seemed to have an uncanny way of opening the door to yet another. The high transportation costs of the coking coal needed by FMC's Idaho phosphorus furnaces, for example, led to joint experiments with U.S. Steel Corp. to produce coke from low-grade local coal. The ersatz coke has been proven in FMC's phosphorus furnaces, and is now being tested in steel blast furnaces. If successful there, says Davies, it could mean a revolution in the world steel industry. Similarly, an ingenious FMC device to detect blood spots on eggs during automatic packaging led to a $4,000.000 Government contract to develop an automated post office, where letters would be scanned and sorted by machine. Eying the potential profits, Davies muses happily, "There are 10,000 post offices to be automated."

With equal success Davies has admonished his machinery and military divisions to stick to specialties where the volume is not large enough to attract competition from the giants in the field, or where profit margins are good. Thus FMC has steered clear of big farm equipment such as heavy tractors, instead makes such items as potato harvesters. While the major defense firms chased glamorous missile contracts. FMC went after, and got. contracts for ground support equipment.

Still on the Trail. Since FMC must now cope with a bewildering array of over 5,000 products manufactured in 69 plants in the U.S. and abroad, autonomy for divisions has become an article of faith with Davies. "Our division heads are practically the heads of their own businesses." he says. "If you give them authority, they grow." In keeping with his philosophy, Davies is transferring more of his own authority to FMC President James M. Hait. 56, a laconic mechanical engineer who was one of the prime assets FMC acquired along with the Peerless Pump Co. in 1933. Designer of World War II's famed Water Buffalo amphibious tracked vehicle and the moving spirit behind FMC's military business. Jim Hait is gradually taking control of the chemical divisions as well.

But it seems highly likely that Davies, who pointedly declines to commit himself to retirement at 65, will continue to dominate FMC for a long time to come. Beaten out by New York's Stauffer Chemical

Co. in a recent attempt to acquire American Viscose Corp., Davies is already hot on the trail of a drug manufacturer to add to FMC's chemical business. "Barring acquisitions," predicts Davies, "we should continue to grow at 10% to 15% a year." Outsiders' estimates tend to run much higher, for Davies has never been a man to bar acquisitions.

* Shortened to FMC Corp. last year after Davies decided that the food machinery label no longer covered enough of the company's business.

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