The Razor's Edge at STP

Rotund Andy Granatelli, chairman of STP Corp., has become one of television's most familiar--indeed, unavoidable--commercial pitchmen, touting his much criticized engine-oil additive as the "racer's edge." A little more than a week ago, Granatelli, 50, got the razor's edge when his board of directors abruptly cut him loose and replaced him with John J. Hooker Jr., entrepreneur and sometime politician. Hooker was hand-picked by Derald H. Ruttenberg, chairman of the widely diversified Studebaker-Worthington Inc., which owns a controlling interest in STP. The keenly publicity-conscious Granatelli was almost as incensed by what he believed was inadequate press coverage of his ouster as by the firing itself. Groused Andy: "I don't know how that can happen when a company our size releases the man who is the company."

Flamboyant, loquacious and abrasively opinionated, Granatelli's chief role at STP was that of promoter. He regularly lavished up to a quarter of the company's annual income on advertising, in which he and his wife Dolly played starring roles, and on sponsoring cars bearing the STP label and Day-Glo red colors in major auto races such as the Indianapolis 500. In ten years as president, he built STP sales from $9,000,000 a year to almost $100 million and expanded the line to include oil filters, engine-block heaters and anti-pollution devices. Granatelli collected one of the fattest incomes in American business: about $230,000 a year.

In recent years, however, Granatelli increased his already astonishing promotional spending to offset the impact of charges that STP additive was of little, if any help for engines. Though the company's sales rose slightly in 1972, net profit skidded by $1.7 million, to $6.7 million. Granatelli was drawn into open disagreement with his fellow directors, especially Ruttenberg, who argued unsuccessfully for a cutback in the costly ad budget. Apparently Ruttenberg seized the opportunity to persuade the board to dump Granatelli after a preliminary company report estimated that third-quarter earnings would again be down sharply--even though most of the decline was caused by the Government's summer price freeze.

Hooker, 43, the man who replaces Granatelli, has a kind of Midas-in-reverse track record. Almost all of his business enterprises--including Minnie Pearl's Chicken System, Mahalia Jackson's Chicken System and the Royal Castle fast-food operation in Miami--have been unsuccessful. Southern aristocrat, he ran twice for Governor of Tennessee and lost both times. Said an earnest Hooker last week: "I really don't know the reason for the change."

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