A Ford in Its Future

Many of the autos parked outside the Philadelphia headquarters of Philco Corp. these days are new Fords. Ever since Ford Motor Co. took over Philco 15 months ago, Philco's workers, as new members of the Ford family, have happily taken advantage of Ford's employee discount. Other signs of Ford's presence at Philco are less visible, but far more dramatic. The marriage of Ford's money and management to Philco's scientific knowledge has given once-faltering Philco new strength.

Philco got into trouble when sales of its consumer goods fell off so sharply that they were no longer enough to offset the heavy costs of developing computers and other new products. Philco's plight interested a young Ford executive named Charles E. Beck, now 41, whose assignment was to find companies for Ford to acquire. Beck saw Philco as a company without the money to capitalize on opportunities, but with an enviable record of scientific development: the first TV set that would operate without a roof aerial in 80% of U.S. homes, the first horizontal freezer compartment in the top of a refrigerator, the hermetically sealed compressor system for room air conditioners that has made possible today's compact air conditioners. Ford followed Beck's advice to buy Philco, put Beck in as president.

Tighter Controls. From Ford Beck brought a team of eight topflight executives, installed them in key jobs, and began to overhaul the company. Philco's research division, which had been competing with other Philco divisions for Government contracts, was given a mission to help other divisions. Two separate divisions that had been engaged in weapons and communications work were consolidated. And the almost autonomous departments within the consumer products division were eliminated to cut out overlapping activities. Beck also introduced Detroit-style cost accounting to keep close watch on production costs. His efforts produced results: manufacturing efficiency last year rose 16% in the consumer goods division. Meanwhile, Ford patched up Philco's bitter legal hassle with RCA over color TV patents (TIME, Jan. 11), thus enabling Philco to begin producing color TV sets this spring.

Beck's men also revitalized Philco's computer division, which had missed out on the boom in smaller business computers; this year Philco will begin leasing its new medium-sized 4100 computer. No Philco division has profited more from Ford's takeover than Western Development Laboratories in Palo Alto, Calif., one of the nation's leading experts in telemetry and ground-to-outer-space communications, which is receiving one-third of the $40 million that Ford is currently pumping into Philco. Western Development is now expanding its laboratories, is planning to help build a middle-altitude communications satellite, and will have the job of operating the Houston tracking station for the Apollo moon shot.

A Stake in Space. Southern Baptist Beck, who was a World War II B-29 pilot and joined Ford in 1949 as a financial analyst, makes all day-to-day decisions on his own, deferring to Detroit only on major policy matters. He describes himself as "a road-map man," has charted a route to bring Philco to better things within the next five years. Though the figures are buried within Ford's annual report, Philco probably underwent a slight sales dip last year to about $375 million, made no profit. Wealthy Ford is obviously more interested in Philco's long-range prospects--and those are good. In reviving Philco, Ford has won a larger role in the space race than has its arch competitor, General Motors.

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