Shuffle & Cut

Norton Simon, the California millionaire who built an empire out of tomato paste, not only collects companies (among the many: Hunt-Wesson Foods, Canada Dry and Wheeling Steel) but also shuffles them and their management like so many cards. Last week he was shuffling for all he was worth. First, he announced that he was relinquishing the post of board chairman of Wheeling Steel, which he has held since Hunt Foods acquired a major interest in the West Virginia steel firm in 1964. Next, in an unrelated move, he arranged the appointment of Colgate-Palmolive Executive Vice President David J. Mahoney, 43, as new president and chief executive officer of Canada Dry.

The Mahoney appointment is the kind of creativity that Simon enjoys. Canada Dry has long been run by Roy W. Moore, 75, as chairman, and Moore's son, Roy Jr., 47, as president and chief executive. Both fought Simon vigorously two years ago when he bought a block of stock and first sought a seat on the board of directors. But the Moores were open to the criticism that Canada Dry, with a market in both soft drinks and whisky and sales of $171 million annually, has failed to live up to its marketing possibilities in spite of a record advertising budget that currently, at Simon's urging, has reached $20 million. With Mahoney in as chief executive, the junior Moore will now become chairman and his father honorary chairman.

Good Humor Man. Mahoney, who was personally recruited by Simon for the chief executive's chair, seems effervescent enough for the task. A New York City native who now occupies a Park Avenue apartment scarcely a block from the old East Side neighborhood in which he was born, Mahoney began his business career as a mailroom clerk in the advertising agency of Ruthrauff & Ryan. While working at the job, he commuted to Philadelphia's Wharton School of Finance, ultimately earned both a business-school degree and an account executive's office at Ruthrauff & Ryan. At 28 he left a $25,000-a-year vice-presidency to form his own agency. Mahoney eventually disbanded the agency to become president of a top client, Good Humor Corp., left that for Colgate-Palmolive.

Mahoney is a dedicated marketing man. "I like to get up in the mornings," he says, letting it be known that he can hardly wait to get at the kind of consumer product sales he was charged with at Colgate-Palmolive. Moving from second slot in an $800 million-a-year company to the top job in a less than $200 million-a-year corporation is a step that Mahoney considers a challenge. He claims no fear of Coca-Cola and Pepsi-Cola, Canada Dry's two higher-ranked competitors in the soft-drink field. Says he: "I'm used to competition from giants--like Procter & Gamble and Lever."

Avoiding Interlock. The main reason for Norton Simon's other move--his own disestablishment from Wheeling

Steel--is that he owns through Hunt Foods large chunks of stock in both Wheeling and Crucible Steel, is likely eventually to merge the two into what would be the ninth largest U.S. steel company. Wheeling has already made preliminary inquiries with the Justice Department as to whether interlocking directors would be a hazard to approval of the merger. The answer, obviously, was enough to cause Simon--who is still fighting a court suit against dissident Crucible shareholders--to cut himself out of the board of Wheeling. Five days later, in a related move, two other Wheeling directors left the Crucible board.

At the same time, Wheeling announced that Simon's successor as a Wheeling director would be Gustave Levy, partner of the Wall Street firm of Goldman, Sachs, and a longtime financial ally of Simon's in corporate acquisitions. Stepping out, Simon said that Wheeling's "critical current financial needs and longer-range financial requirements are areas to which Mr. Levy's talents are unusually well-adapted." Put another way, Wheeling desperately needs $150 million to finance such new facilities as a slabbing mill, cold-rolled mill and reheating furnaces. Bankers have so far been loath to lend the money, but with Wall Streeter Levy on the board, the prospects may be brighter.

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