Distant Force A Memoir of The Teledyne Corporation and The Man Who Created It, With An Introduction To Teledyne Technologies by George A. Roberts

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$39.95
The Building of a Corporation
Henry Siii^k'ton and Cicoij;c Kobcrts

met as young plebes and roommates at
the US Naval Academy at Annapolis in
1935, beginning a lite long friendship
and over three decades of a close
and remarkably productive business
association.
From Annapolis, Henry went on to
pursue his interests in mathematics

and the newly emerging technology
of semiconductor electronics at MIT,
where he received his doctorate. Then
after a series of jobs with (iK, Hughes,
North American, and finally Litton
where he developed a unique two

axis gyroscope for inertial guidance
that revolutionized air, missile and
space navigation — he founded the
Teledyne Corporation in 1960
with his friend and MIT colleague
George Kozmetsky. From his initial
focus on aerospace and electronics,
Henry began a decade long period
of acquisitions that supported those
fields, and diversified the company in
many ways.
George Roberts, meanwhile, earned

a doctorate in metallurgy at Carnegie
Mellon University, and went to
work for the Vanadium Alloys Steel
Company in Latrobe, Pennsylvania, a
highly specialized producer of precision
alloys used in critical aerospace,
industrial and nuclear applications.
He quickly rose through the ranks to
become its president. In 1 966, the two
friends, who had remained in contact
over the years, agreed that a merger of

their companies would be profitable
to both. With that merger George
became President of Teledyne, with
Henry as Teledyne's C^hief Executive
Officer and Chairman of the Board.
This book is George Roberts' memoir

of how they built Teledyne into a 4
billion dollar corporation that was
at times controversial, but unerringly
successful in providing high financial
returns to those shareholders who
remained with them through their
amazing journey.
rnntitiui'ii nrt hiH-k tianel
I
r r
Distant
Force
A Memoir of the Teledyne Corporation
and the Man Who Created It
With an introduction to Teledyne Technologies
By Dr. George A. Roberts

with Robert J. McVicker
Copyright 2007 Dr. George A. Roberts
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stored in a retrieval system, or transmitted in any form or by any means,
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Printed in the United States

Acknowledgements
This book my memoir. It is how I remember the people, places

is
and events during my association with Dr. Henry Singleton and

the Teledyne Corporation. Much care has been taken to confirm
the accuracy of the specifics, but I cannot guarantee absolute cor-
rectness, and I apologize in advance for any errors or omissions
I may have made.
I have gleaned much of this information from documents
that still exist: Teledyne financial reports, notes from managers'
meetings and board meetings, internal letters and memos, press
releases and articles regarding Teledyne in the financial press,
transcripts of speeches that Henry and I and others gave at vari-
ous events, and similar material. Perhaps because of my scien-
tific background, I have always been an inveterate note taker and

keeper. I still have most of the small black notebooks in which
I recorded the day-to-day details of managers' meetings, profit
plan presentations, and other business matters, and they have
been invaluable to me in putting this document together.
I also wish to thank those former Teledyne executives, share-

holders and others who were able to provide their assistance and
inputs. Among those were: Jay Last, who provided insight into the
very earliest days of the corporation, before I arrived on the scene;
Jack Hamilton, who kept detailed records of the stock's perfor-
mance over the years including splits, buybacks and spin-offs and
provided that material, as well as information on TRAP; Russ
Kiernan, who contributed a lengthy essay on his experiences with
in
Henry's management style; Judith Nelson, who gave 28 years of
exemplary service to the corporation, and who became corporate
secretary in 1987 and was named general counsel in 1990, was
kind enough to read this document and offer her thoughts and
suggestions; Hudson Drake and Bill Dorricott gave their perspec-
tives from the group executive level. Others include Pete Katsuno
and Will Strong, who provided information on our international
operations, and Bill Prachar, one of our young lawyers, who
recalled his experience with Henry, and later with US Ecology.
Thanks also to Dr. Robert Mehrabian, president and CEO of
Teledyne Technologies, Inc., and others on his staff including Bob
Steenberge and Robyn McGowan who have been very supportive
of my project. They have also provided an epilogue to this doc-
ument describing the continuing activities of the new Teledyne

which still includes many of the original aerospace and electron-
ics companies on which Henry based his original company.
I am extremely sorry that Henry Singleton is not still with us
to provide his thoughts and feelings to this document, which I
am sure would have been very germane and incisive. I can almost
hear him saying, "George, be sure to tell them about ..."
His wife Caroline Singleton, son Will, and daughter Christina

Singleton Mednick have all been highly supportive of this project
as well. Excepts from Christina's book Saf7 Cristobal: Voices and

Visions of the Galisteo Basin are quoted in describing Henry's
love of the land and ranching, and his concern with preserving
the irreplaceable archeological treasures of that area.
Thanks also to Roger Whitney, the artist who illustrated the
book's dust jacket. The art was originally prepared for Teledyne's
25th anniversary celebration.
Finally, I wish to thank Bob McVicker, who helped me put all
this material into some semblance of order, and Linda Meglin,

who managed the design and production of this book.
IV
Introduction
Over the years a great deal has been written about Teledyne and
its founder and guiding genius, Dr. Henry E. Singleton. Genius is
an oft-misused word, but it cannot be denied that Henry Singleton

brought exceptional brilliance to the creation and development of
the enterprises he undertook. Few business leaders have possessed
the combination of mathematical genius and engineering talent,
with the insights of a financial analyst, and the management cre-
ativity of a tournament-class chess player, that Henry Singleton
brought to his entrepreneurial ventures.
Business journalists, pundits, financial analysts and others
have viewed the company from various viewpoints, but always
from the outside looking in. What has been written has often
been incomplete, sometimes superficial, and in some cases simply
incorrect, with little real insight into how the corporation was
run from the inside, the reasons for the many decisions that were
made, and the flexible strategies that were used. Many of these
strategies, new at the time, have now become commonplace in the
business world. Once criticized for not having a business plan,
Henry replied that he knew that a lot of people running compa-
nies had very definite plans they followed assiduously. But we're
subject to a great number of outside influences on our businesses,
and most of them can't be predicted. my plan is to stay flex-
So
ible. He told a Business Week reporter who was interviewing him
"My only plan is to keep coming to work every day. I like to steer
the boat each day rather than plan ahead way into the future."
-
But SingletcMi also bdieved, and ofren said, that the key to
was pe
his success : r.e
— i pec^>le who were creative, good
managefs and dc : ^ he surrounded himself with
that kind <rf pers _ ^' ^^zmetsky, his co-founder
and initial inTcs:.:. _: _ : . _ ."i professor of tnanage-

mem; science. Another was Dr. Claude £. Shannon, a friend and
fiellow studoit at MTT, who brought his own technical expertise,
and who became wodkl-feoowned as the creator of the science
oi infrnmation tedmology on which tnodem digital computer
technology is based. Fm also ptoud to say that Henry chose me
to be his second in ccMnmand and to contribute my exp>errise in
metalluigical sciences as wêll as my management ex|>erience in
acquirii^ and devidopii]^ the ccMnpany's expansion into the met-

als boaness, and running the diverse array of profit centers that
became Tdedyne. Henry's seardi for talented people went down

eten to the individual managers of his smallest companies.
fr is all wdl and good to look back now and say, well, he sim-
frfr acquired a lot of diverse ccMnpanies and built them into a great
lâw puzzle of a corpcHiation. But at that time, not many busi-
ness leaders understood how to do this, or how to manage such
a diverse enterprise efficiently and profitably. Within eight years
of founding Tdedyne, he and Kozmetsky had bootsrrap{>ed their
start-tq) investment of S450,000 into a company with annual
sales<rf over $450 miUioiL, an aimual profit of some S20 million,
and a stock market value of about SI. 5 bilfion.

Tlie complexity of managing such a diverse assemblage of
companies in fi<dds ranging ôm electronics to exotic metals,
gec^n'sical expkM-ation to consumer products, and insurance
and finance is often oxcdooked. As a top-level executive Nsho
participated with Henr>- in the management of this highly di\'er-
»fied ccMnpam' for most of its histon.', 1 can attest to that.
At its peak, Tdedyne consisted of more that 130 individual

prc^ cotters in these many fields, each with its own markets.
VI
Introiiatcttcm
Its own product mix and its cfvm management. To compare the
difficulry' oi prohtably and etficientiy managiiig sucli a diverse
technological corporation, with that of managiiig corpocatioos
that focus on a single held or product, is to miss the skill with
which Henry- Singleton was able to develop, organize and run his
company.
The bottom line, as it is a ppropriate to say in --.t r_-:-rss
world, is that Henr>- Singleton was able to create exccpoooal
value for his shareholders. \n investor who put roooey into Tele-
dyne stock in 1966 achieved an annual return of 1~ 9 percent orer
25 years, or a 53x return on invested capital vs. 6.^x for the S&P
500, 9.0x for General Electric and ".Ix for other comparable
conglomerates. The company's stock also outperformed the S&P
500 by a significant margin during this period and oatperfbrmed
other conglomerates, including General Electric, as welL^
As a close lifelong triend of Dr. Singleton, I was a participant
for many years in the de^-elopment and manayment of Teiedyne
from its beginnings as a small electronics firm into a diverse
world-class corporation with a peak annual sales of three and
a half billion dollars. 1 would like to present the Teiedyne story,
from my company durix^ many of those
perspective inside the
years, of the amazing accomplishments and achievements Henry
Singleton made as he conceived, created, and nurtured his wotW-
dass corp>oration.
These are mv recollections of those interesting vears.
Dr. George A. Roberts

Executive, Teled\Tie, Inc. 1966—1993
'
ChomJrr jxd Thonuhke Hsrvwrd SMsimess SdrocL A-t^ji
Singleton the Man
To understand how Teledyne grew from a tiny Los Angeles elec-
tronics company in 1960 to 293rd place on the Fortune 500 list
in just six years, it helps to understand the background and life
events of the man who started it all.
HenryEarl Singleton was a farm boy from Texas. He was

born on November 27, 1916, on a small ranch in Haslet, Texas,
some 20 miles north of Fort Worth, where his father raised cot-
ton and cattle. This early rural background gave him a love of
the land and cattle ranching that never left him and led him, in
later years, to become one of the largest private landowners in
the United States. A book, written by his daughter, Christina

Singleton Mednick, details his love for his ranch, San Cristobal,
in New Mexico, and his efforts with local authorities and educa-
tional institutions to preserve its history and "petro-treasures."
I've told more of this story later in the book, at the time of Hen-
ry's retirement from active management of the company, using
excerpts from Christina's book.
I can't speak of Henry's earliest youth or his teenage days, of
course, since we didn't meet until we were young adults at the
Naval Academy, but I can attest to his lifelong fascination with,
love of, and belief in the importance and value of real estate of
all types. I believe it is true that he never sold a square foot of

property that he had bought. It has been said and, having been
close to him for over 30 years, know it is true, he never sold a
I
house in which he had lived. He kept them, rented them, fixed

Distant Horce
them, and was possessive of them. I know this is true of the five
locations he owned in the Los Angeles area.
When I first moved to Los Angeles, he advised me that no
matter what I should buy there it would not be a bad decision.
But it seemed to me I'd be out of my mind to pay the prices per
square foot being asked there compared to what I was used to in
Latrobe, Pennsylvania. Nevertheless, I followed his advice and

was glad I did. I was reminded of Henry's interest in real estate
recently, as I was reviewing some notes that I kept during the

days of our acquisitions. I listed the sales, the people, the prod-
ucts, the profits of the companies we studied. But I also listed the
square footage of the plants they owned. For example, the notes I
prepared for my remarks to the shareholders at our annual meet-

ing in February 1967, just seven years after the corporation had
been founded, included these items:
14,500 employees in 90 profit centers, with less than

1,700 in unions,
Plants in 15 states and 14 foreign countries;
Square feet owned in:
CaHfornia: 1,113,000;
Northeast: 1,677,000;
Southeast: 353,000;
Southwest: 405,000;
Central: 182,000.
On May 31, 1967, we owned three locations with 4,200,000

square feet, and 72 leased locations with 1,900,000 square feet.
As an example of the speed with which we were growing, at
we had 20,000 employees, with 2,700 in unions, and

that date
by November 10 of that year we employed 26,000 with 3,800 in
unions.
Henry never sold any real estate unless there was a very good
Singleton the Man
and pressing reason. Even when we made strategic spin-offs of

our insurance companies in 1986 and 1990, he made sure that a
substantial amount of their real estate holdings were transferred
as an asset of those companies for their investment portfolios.
Henry, as mentioned, eventually became a very large, if not the

largest, landowner in New Mexico, and at his death was noted as
the third largest landowner in the United States, His family. Tele-
dyne, and property were clearly the three major loves of his life.
But much transpired before he had accomplished that. As

a young man it is said that he had expressed his desire, some-
day, to establish and run a great corporation the likes of General
Electric, or US Steel, or AT&T, and he certainly never lost that
focus. As groundwork for those ambitions he started out with
two years at the University of Texas (North Texas Agricultural

College) and then became an entering Plebe at the United States
Naval Academy in 1935. That is where I first met Henry, in July
of that year. We came to room together during our time there,

and became lifelong friends.
One of Henry's great talents was mathematics. At the Acad-

emy, an initial, intense two-year program of mathematics cov-
ered what would normally be done in three or four years at the
average college. At the end of those first two years, Henry ranked
first in mathematics in our class of 820 students, and, as was the
custom, he was unceremoniously dunked, fully clothed, in the
Severn River by his classmates. With his guidance I managed to
end up in the top section in mathematics myself. Incidentally,
a movie, which I took, still exists of his dunking and has been
transferred to videotape. It became an amusing sidelight at vari-
ous Teledyne directors meetings in later years, which he accepted

in great good humor.
Henry reluctantly left Annapolis in 1938 because of a recur-
Distant Force
ring medical condition. After considering several engineering

schools, he chose MIT and received both bachelor of science and
master of science degrees in Electrical Engineering in 1940. In
1939, while at MIT, Henry was a member of a three-man team
that won the William Lowell Putnam Prize, an undergraduate
intercollegiate mathematics competition. It was the first time
MIT had won this prize. Another member of the team was Rich-
ard Feynman, who subsequently won the Nobel Prize in Physics
and became professor of physics at Cal Tech.

While at MIT, Henry met Caroline Wood of Cambridge,
Massachusetts, who was attending Radcliff College at that time.
They were married in 1942.
Immediately after receiving his degrees in June 1940, Henry
left for Washington to join the US Naval Ordnance Labs, devel-
oping methods for the degaussing of naval and commercial ships,
and in 1942 became part of Admiral Ernest J. King's Operations
Research Group, where he concentrated on anti-submarine war-
fare techniques. He was then accepted by the Office of Strategic
Services (OSS) and served in Europe until 1945.
One of his colleagues there was Reuben Fine, the United
States chess champion at the time. Henry recounts that Reuben

beat him in a game in which Reuben played blindfolded, taking
just two or three seconds a move. Henry had a lifelong interest in
chess, and became a talented tournament-class player himself.
After a short stint at ITT in New York City as a patent engi-
neer, specializing in communications technology, he returned to

MIT in 1948 to earn his doctorate. He also served as a research
consultant and instructor in the MIT electrical engineering
department during this period. At that time, Henry told me,
he had designed and built one of the early digital computers, a
special purpose machine that computed correlation functions. A
paper on this machine was published in the Journal of the IRE
in 1950.
Singleton the Man
He received his ScD. degree there in 1950. His doctorate the-

sis was called "Theory of NonHnear Transducers" in which he
generahzed Weisner's optimum Hnear filter and prediction tech-
nique to the nonlinear situation. This work was done under Jerry
Weisner who served as Science Advisor to Presidents Kennedy
and Johnson. Weisner later became the president of MIT. When
Henry graduated, Weisner offered him a faculty position at MIT,
but he declined and decided to go out to California and work on
electronic control applications in the aircraft industry.
It is significant that John Bardeen, Walter Brattain and Wil-
liam Shockley, working at Bell Laboratories, had developed the
first transistor in 1948, ushering in the semiconductor era that
was to revolutionize the field of control systems and computers

and play such an important part in Henry's future.
Henry's first venture into the business world was a brief stint
as a research associate at General Electric, in 1950, where he
worked on communication theory and was introduced to the
basics of research and development as practiced by that company.

Then, in 1951, he was recruited by Simon Ramo, who was tech-
nical director at Hughes Aircraft, to join a team of engineers and
scientists headed by Tex Thornton at Hughes in Los Angeles.
The team he joined was assigned the task of applying the
advanced electronic technologies of the emerging digital and
semiconductor revolution to the fire control and flight control
systems of the F-102 aircraft. "I had the pleasure of demonstrat-
ing a pilot training fire control simulator to Howard Hughes
one day," he told me. Henry later told me stories of meetings he
had with Howard Hughes in evenings when they worked late.
"Howard would only come by to see us at night, and always

unannounced. He would ask what we were doing, and he always
understood everything when we explained it to him. He was a
very fine man."

In 1952, Henry moved to North American Aviation where he
Distant Force
worked for John Moore on inerrial navigation systems. He had

shown a remarkable talent for designing and applying computer
technology on a variety of robotic applications at MIT, and these
talents were then put to further use at North American where
he led a group of scientists working on their inertial navigation
program. These systems were being developed at that time for
the Navajo missile and for a state-of-the-art development for
manned aircraft.
In 1954, Tex Thornton left Hughes and started Litton Indus-
tries. He offered Henry the chance to join in his company's pio-

neering work on inertial systems, and Henry accepted. He moved
up rapidly in that company to become director of engineering
of the Electronics Equipment division in 1957, and then vice
president and general manager of that division in 1958. During
those years he became responsible for the idea and execution of
a plan to develop a completely new inertial guidance system that
included both the inertial platform and its supporting electronics.
The new system was to have an accurate two-degree-of-freedom
gyroscope, which would be smaller, lighter and cheaper than ear-
lier systems that had only single-degree-of-freedom gyroscopes.
He held several patents on gyro-stabilized and precision inertial
platforms and accelerometers during this period.
Teck A. Wilson, who was with Henry at Litton and came to
Teledyne at its very beginning, had this to say about that devel-
opment:
What Henry did was to recognize that a two-degree-

of-freedom floated gyroscope with sufficient accuracy
to support inertial guidance could be built, and that if
it were, it would allow the construction of inertial guid-

ance systems (platform and electronics) that would be
much smaller, lighter, and cheaper than those being pro-
moted by Dr. C. S. Draper of MIT, which used single-
Singleton the Man
degree-of-freedom gyros. At Litton he went on to prove

that, winning his first major order from West Germany
for their F-104's in 1959 or 60. Interestingly, his biggest
obstacle all the way was Draper and his guys; he had
great trouble finding support in the U.S.
The USAF-ASD office in Dayton, which supported
Draper, wanted nothing to do with him. However, he
found some help from the adjacent ASD Flight Dynam-
ics Lab, which was responsible for flight reference sys-
tems. Aircraft attitude and heading were inherently

available from his system; navigation was a "plus."
The Litton LN-4 for the F-104G was the first appli-
cation of an inertial guidance system to fighter aircraft.

The MIT system weighed hundreds of pounds, and was
finally used, I think, only on some of our nuclear bomb-
ers and submarines. Conversely, Henry's type of system
became standard on military and commercial aircraft
worldwide. For that first award [from Germany] Henry

was also the chief salesman, and he was superb. I was
with him on a couple of those trips.
"It is truly correct," Teck concluded, "to say that Henry was
the father of aircraft inertial guidance as we know it today. The
only major change, other than the evolutionary improvement of
electronics and manufacturing processes, was the replacement of
mechanical gyroscopes with laser gyros sometime in the 80s."
During his years at Litton, Henry was exposed to Tex Thorn-

ton's philosophy of thrift and conservatism, which were part of
his own philosophy as well. All this was prelude to the next major
step in his life, when he and a colleague formed the company that
was to be one of his dominant concerns and interests for the rest
of his business life, and was to profoundly influence my life as
well.
Distant hone
Henry was much more than a salesman, mathematician,

engineer, inventor and tournament-class chess player. He was
a student and an observer of the history of manufacturing. He
studied the progress and growth of corporations from the days of
Henry Ford to General Motors and how successful corporations
grew by acquisitions. He studied the behavior of Jimmy Ling and
others who were beginning to grow in this manner. He studied
the Littons, the TRWs, the LTVs, the City Investings, the Gulf
and Westerns, and today's largest of all conglomerates. General

Electric.
Henry told me how he had, in the '40s and early '50s, spent
days in the offices of brokerage houses in New York and else-
where, watching the ticker, thinking on how to get capital roll-
ing efficiently, how shares are valued and traded, how companies
with a steady growth rate are rewarded with an ever increasing
price/earnings multiple.
The Beginnings
From his studies at MIT and his experience at General Electric,

Hughes, North American, and finally Litton, and with work
his
in advanced navigation and avionic control systems, Henry had

become convinced that digital technology would be the dominant
force in future developments in control systems and virtually
every other electronic field, and that semiconductor technology
would be critical to future developments in those fields. He felt it
was important that Litton should enter the semiconductor field

in order to control the design of the components used in control
systems, and create a synergism between semiconductor compo-

nent design and control system design, each contributing to new
developments in the other field. Roy Ash, then president of Lit-
ton, disagreed. He felt the semiconductor component business
was too crowded and competitive, and not profitable enough.
At that time this was certainly so. But Henry had faith in his
convictions.
Henry, however, never downplayed the value of his experi-
ence at Litton. "When I went to Litton," he once said, "I needed
money and experience in order to start my own company, and I
got both while I was there."
It was at that point, in July 1960, that Henry, then 43, and his
colleague George Kozmetsky, who had taught business manage-
ment at MIT where Henry had met him, and who also worked
at Litton, decided to invest their personal resources in starting
a new electronics company that would allow Henry to pursue

Distant Force
his vision. They started the venture, which was originally called
Instrument Systems, with an original capital of $450,000,
The company's first offices were on North Beverly Drive in
Beverly Hills, and their first acquisition was a small electronics
company called Amelco, located on Panama Street in Los Ange-

les. This gave them a plant, some manufacturing facilities and a
small cadre of employees. The company name was changed to

Teledyne, a name that Henry decided on after much thought, in
October of that year and the Teledyne story had begun. Teledyne
stock went on the market in 1961. Arthur Rock, who at that time
was with the firm of Hayden Stone, helped with the first public
offering.^ He later became a major shareholder of the company,
and served on its Board of Directors for many years.
Hayden Stone had its offices in Century City at that time,
and later Teledyne moved its headquarters from offices in the
airport area to the 1901 Avenue of the Stars building in that

development. The company was one of the first tenants in that
building which was the beginning of Alcoa's development of
Century City.
A name that is very well known to all who were with Tele-
dyne, incidentally, and should be mentioned at this point, is that
of Betty Denton who was a close participant in most of Tele-
dyne's history. Betty had worked for Henry from 1956 at Litton
Industries, and became the first Teledyne employee in 1960. As

Henry's executive secretary from the company's very first year,
she presided over his famous corner office at 1901 Avenue of the
Stars for 28 years.
Henry was quoted in a 1968 Forbes magazine article about
his early faith that semiconductors would become the dominant
factor in future electronics systems, even while this was still being
debated by others in the industry:
'See pictorial section for the nd that was used for the first offering.
10
The Beginnings
So we went into it [semiconductors] in 1960 even

though we were in the midst of a business crisis at
the time. We did it because of our conviction that it
was necessary for our long-term future growth and

not because of any conviction that we would immedi-
ately make huge amounts of money. We decided that if
we were going to manufacture, develop and sell elec-
tronic control systems, we ought to have a capability
in the component area. That would enhance our abil-
ity to design systems because we'd know more about

new components we could use; on the other hand, our
expertise in systems would enable us to better judge
what kind of components to develop.
Kozmetsky, who had a doctorate in commercial science in
1957 from Harvard, provided his brilliant knowledge in the man-

agement field, and later went on to become a nationally known
professor of business management. Henry, as was to be expected,
contributed his electronic and technical expertise, as well as his

unusual entrepreneurial talents and insights. Their goal was to
establish a company that would excel in the field of electronic
control systems for the aircraft and aerospace industries, as well
as to excel in the technologies needed to support that business.
Henry was well grounded in this business through his earlier
experience with the mentioned aerospace companies. Determined
to succeed, they moved cautiously at first, using their limited
cash carefully. In 1960 they formed Teledyne Systems Company,
which became qualified to bid on government contracts, opening
their access to these important markets.

One of Henry's early decisions was to hire Dr. Jay Last away
from the Fairchild Semiconductor Company to help start his com-
pany's semiconductor and computer operations. This was in the
very first year of Teledyne's existence, and Jay's name is listed as
11
Distant Force
one of four vice presidents in the company's annual financial report

for 1961. John Hoerni, who was Jay's colleague from Fairchild,
also came with him and is also listed as a vice president.
The story of how Jay and Henry came together is quite inter-
esting. When Jay finished his doctorate in physics at MIT, he
went directly to work for Shockley Transistor Company where he

worked in the development of early semiconductor technology.
William Shockley, of course, was one of the original inventors
of the transistor, along with John Bardeen and Walter Brattain,
and they later won the Nobel Prize for their work. According
to Jay, Shockley was a brilliant scientist, but a less than bril-
liant manager, and there was a growing dissatisfaction among
the scientists who worked for him. A number of them, including
Jay, decided to leave the company. In discussions among them-

selves, they decided that, rather than go their separate ways and
individually seek other jobs, maybe they should start their own
semiconductor company. The story of this group,named by the
press "The Traitorous Eight," has been well documented in many
publications.
To get the ball rolling. Gene Kleiner, one of the group, wrote
a letter to Hayden Stone, venture capitalists, to get their advice.
The letter got the attention of Arthur Rock who was a junior
employee there at the time, and they came out and recommended
that the group should start their own company, which they did.
"We started our company, called Fairchild Semiconductor, in
1957, in an agreement that made it a division of Fairchild Cam-

era and Instrument of Syosset, New York," Jay said, "and we
made the first silicon diffused transistors. This was an immediate
success, and we worked like hell. We had a product out by the
summer of the next year. Our company grew very quickly build-
ing transistors and diodes, the basic components of the semicon-
ductor business at that time, and they were in high demand.
"I did my part in getting that part of the business going, but
12
The Beginnings
I was one of the few in thecompany interested in longer range

developments. In the summer of 1959 I started and built up a
group within the company to make integrated circuits. My friend
and colleague John Hoerni had developed the key invention, the
planar process, which made silicon-based integrated circuits
practical, and we were able to make the first ones by late 1960,
just before I met Henry.
"Others at Fairchild," Jay said, "the sales people in particu-
lar, were really not interested in what my group was doing with
integrated circuits. In fact, they saw it as a threat to their sales
of discrete components, which were sold to companies who were
circuit designers, and since IC's were already complete circuits,
they saw conflict there. So there was little support there for what
we were doing. And you have to remember that even though
IC's now dominate the electronics industry, back then there was
almost no demand for them. And in those early years the yields
we achieved with our processes, even for comparatively simple
circuits, were terrible."
"Meanwhile, Fairchild Semiconductor had become a big com-

pany. It was our company, but Fairchild Camera had the option
to buy it from us and they did. So suddenly I was sitting there as
an employee of a big company, and not involved in top manage-

ment anymore. And I could see that the things I was working on
were not in the main line of what the company wanted."
At the same time, as is well known, Arthur Rock, still at
Hayden Stone, was involved in helping Henry in the financing
of his own company, and he was the one who brought Jay and
Henry together.
"What really impressed me about Henry," Jay said after their
first meeting, "was that he was really wanted to use integrated
circuits in his systems, and he really wanted to have the capabil-
ity to make them himself. He knew my background and wanted

me to start up an operation for doing that.
13
"InDegmed ciioiits combiiie a mnnber cti tranastors and
odicr companenKs oo a sii^jk dny chip €^ silicon, diminaring the
hand wiring of bulky styaiaie cxMiyonents inco woddi^ circuits,
and would evcnmalk' lednce the size and wdglit c^ ekctrmiic
systtaus by many Ofdeis <tf magnimde. This fit in perfecthr with
Henry's |4an n> build electronic systems kx military- and space
appbcadons wheie lo«r poirer dissipation, low lieight and small
size were of prime and cost was not so important. And
inteiest,
the new silicon technology that replaced germanium allowed

these thii^ to operate at t:£:her temperatoies, which also helped
them take ofE.
"^So when met him I could see ^vie would be a really
I first
goodfic,andonlyadayortwc irrer r ring 1 had just about

:
made op my mind to accept the otter. John Hoani, who ^ras

ioinii^ me in this vencnie, and I went down to talk to Henry on
New Yearns Eve, 1960, and after the meetii^ John and I drove
—
out to the desert we were both dimbers and we were sitting —
oat there still wearing onr business suits. We had negotiated
pretty toiî on our reqoiranents for options and things like that
ior ouiaieltes and the peof^ we were gmi^ to brii^ alon^ and
Henry had gone along with evtayihing. In the trunk of my car 1
had some horns and noise makers I had gotten horn scxne club up
in the Bay Area, and we sat there in the middle of the desert on
New Year's Eve happily blowing those horns like craz>', celebrat-
ing our new venture as vieil as the New Year."
So Jay and J<4m Hoemi did ioin Tdedyne and started the
cooqiany's first somcoodnctor operation at Mountain Viei^' in
the San Francisco Bay area, in vdiat in now known as Silicon Val-
ley.John spent most of his time managii^ the operaticm and Jay
conceiKrated on the technical ^de. John left fairh* early, and Jim
Battey came in as manager. After a virhik he also left, and vari-
ous people from Teledyne Continental Device, a company that
Tdedyne acquired later, ran it.
14
The Regmnmgs
George Kozmetsky had suggested, for tax reasons, that the

operation be formed as a subsidiao' oi Ameko under the same
name, and so the new operation W2is also knoim as Ameko. Jay
had warned Henry that starting up an operation of this kind
would be an expensive proposition, and it was. Scartii^ with a
bare building, they- had to build almost all the production equip-
ment themselves since there was nothing conunercialh' available
for these processes.
His prophes>- came true, because early in their operations Jay
was haWng financial problems with his operation, and was eicn
having trouble meeting their payroll needs. "The Ameko semi-
conductor operation was different from the acqnisitioa of going
companies. Those companies tended to be self-supportii^ but
we weren't,"" Jay said. "So we were always under-funded. Money
was scarce and it was very distressing to me.
~At one pjoint," Jay said, ""I got so frustrarcd and upset I just
walked out of my office, went to the airport and cai^bt a {Jane

for Los Angeles, and barged into Henry^s c^tfice. 'Henry,' I said,
"Fve had it. I just can't keep working without any money. Fîe got
to have S 100,000.* Henry just looked at me and then stepped out
of his office into Betty Denton's office. I could hear him iimimur-
ing something to her. He came back and a few moments larcr
Betty came in ainl handed him a check. He took it and handed it

to me and said, *Jay, Fm giving you a check ior S60,000 instead
of S100,000 ... because that's all tbr money there is in this uhoU
damned companyT There are not too many peo|Je wiio knew
just how touch-and-go it was in those early days."
weathaed that crias, obviously, and Jay wenr o- ro

Well, they
build a successful integrated dicuit operation. "Henry expecred
each operaticMi to be self-su|^XMtii^ but it was difficult ixx us,'
Jay said, "because we became a captive operation siqjplyii^
integrated circuits to the sysn^ns operations and other mirma l
ccMnpanies. We'd start to develop a {MX)duct w^ coold sell com-
i>
Distant Force
mercially, and that would be interrupted by a need to supply some

specialized circuit for one of the government contracts. Most of
this went into classified programs and it was very sophisticated
stuff, but usually short runs. Things like developing an electronic
lock system for protecting nuclear facilities for Sandia."
Jay was a significant investor in Teledyne, and he remained

with the company for many years. With his assistance they
acquired a number of other semiconductor component manu-
facturing companies, and he helped established Teledyne as an
important developer and manufacturer of these products.
The company's first group was formed and named Teledyne
Components, fulfilling Henry's belief that a components opera-
tion would be vital to systems development.
16
The Early Acquisitions
What I would like to emphasize here is that Henry had three

great ideas in creating and growing Teledyne. His first was to
recognize the future importance of digital semiconductor elec-
tronics when this technology was in its infancy and by selective
acquisitions create a strong base in this growing field on which
to diversify his company.
The second was to acquire and organize a selection of finan-
cial companies within his company to provide the strong finan-
cial base I've described above, which also allowed the rest of the
financial world to recognize Teledyne as an important entity and
potential client.
The third was his innovative use of stock buybacks, which I'll
discuss in greater detail later in this book, to further strengthen

the corporation and enhance shareholder value. These three
things are all equally important to remember in considering and
continuing this story of Henry Singleton's accomplishments.
Henry initiated his plan of growth through acquisition from
that very first year of operation. In the 1960 financial report, the
company's first full year of operation, in his president's letter to
shareholders, he stated:
Your company's objective has been from the begin-

ning to become a major developer and manufacturer
of a broad line of electronic systems and equipments,
and of the electronic instruments and components that
17
Distant horcc
go into such systems. Key elements supporting this
objective are: (1) the estabMshment of a profitable and

expanding operating base, and (2) the assembly and
effective utilization of a strong research and develop-
ment organization.
The company's operating base was expanded
steadily throughout the year by a combination of acqui-
sitions and internal growth. In October 1960, Teledyne
acquired 87% of the outstanding stock of Ameico,
Inc. and all of the outstanding stock of Handley, Inc.
and Mercury Transformer Corporation. These acqui-
sitions gave the company 80,000 square feet of floor
space devoted to the development and manufacture of
electronic systems, data entry and readout equipment,
magnetic devices and transformers, high quality etched
circuits and miniature trimmer potentiometers. Total
employment in these corporations was about 200 peo-
ple in November 1960, and had more than doubled by

year-end.
In July 1961, Teledyne had acquired Palmer Instru-
ments of South Pasadena, California, with its excellent
precision shop facilities and strong proprietary position
in temperature control techniques, as well as low fre-
quency quartz crystals used in crystal filters and stable
oscillators.
In August 1961, the acquisition of the minority

interest in Ameico was completed, making all of the
company's subsidiaries wholly owned.
Subsequent to the close of the fiscal year [October
31] the company acquired the assets and business of
Linair Engineering, Inc., a leader in aircraft and mis-
sile pneumatic and hydraulic fittings, and through its
subsidiaries, a manufacturer of a variety of electronic
18
components, including precision potentiometers, relays,
switches and electric motors. The trimmer potentiom-

eter business of Handley, Inc., and the quartz crys-
tal business of Palmer Instruments were consolidated
with the electronic components business of Linair in a
separate building in Hawthorne, California, under the
name Teledyne Precision, Inc.
In February of 1961, the company opened its Elec-

tron Devices Division in Mountain View, California,
with the objective of developing proprietary manufac-
turing processes for the direct application of electronic
solid state technology to the manufacture of electronic
systems and equipment.
It was Jay's integrated circuit operation and the division was

known simply as Amelco in the years ahead.
Sales of the total company, Teledyne, Inc., in 1961, the first
full year of operation, were $4,491,000 with a net income of

$58,000, and a per share income of $0.13.
The original Amelco facility, at Panama Street in Los Ange-
les, focused on the development and manufacture of microcir-
cuits, which combined many transistors, integrated circuits and
other components on small ceramic substrates the size of postage
stamps and performed electronic operations that formerly would
have required a large box of equipment. This operation was on
the cutting edge of packaging electronic components and sys-
tems, which was driven by space and military needs to get more
electronic capability into smaller and lighter packages.
It continued throughout the years to be one of the most suc-

cessful of Teledyne's operations.
Henry also immediately began acquiring a variety of other

companies through equity agreements, expanding Teledyne's
capabilities beyond semiconductors and control electronics into
19
Distant Force
other products that served the aerospace industry. In the 1960-

62 period, seven new companies were acquired.
One of the most important early acquisitions was American
Systems, Inc., acquired in 1962. It became part of Teledyne Sys-
tems Company, which was the centerpiece of the company's aero-

space systems business, and one of the company's most important
profit centers. It won significant contracts in missile, space and
military applications, for avionics systems, airborne and space-
borne computers, inertial navigation systems, test equipment,
trainers and ground support equipment.
Approximately 20 percent of the stock of Micronetics, Inc. was
also acquired in 1962. This was a newly formed San Diego-based
company specializing in the generation, detection and utilization
of short pulse microwave energy used in advanced radar and elec-

tronic countermeasures systems. This company operated a radar
backscatter range that used scale models of various aircraft to
determine how these aircraft would appear on a radar screen when
illuminated from different angles, and was also used to design air-
craft in a way that would minimize their radar signatures. Physical
products included radar antennas and radar augmenters.
Meanwhile, Henry had brought in other people he had

known and worked with at Litton: Teck Wilson, Joe Smead,
Allen Orbuch and Howard Gates were among them. These men
were given the responsibility of running the new Teledyne Sys-
tems Company, which they did very successfully.
Dr. H. J. Smead, Joe as he preferred to be called, had a Ph.D.
from Purdue, a master's degree in electrical engineering from the
University of Washington, and a bachelor's degree from the Uni-
versity of Colorado. He already had extensive experience in the
electronic controls industry when he came to us from Litton, and
became general manager of Teledyne Systems in 1963. Joe had
20
a long and illustrious career with us, later becoming president

of Teledyne Systems in 1966. He also became a corporate vice
president and group executive, and helped us make many of the

successful early acquisitions that became an important part of
our operations.
Teck Wilson joined Teledyne in its very first year. He was an
engineer who had great talent for writing proposals as well as
great salesmanship in presenting them, and he became very active
in Teledyne's pursuit of government contracts and in searching
out new businesses to acquire. "Some of these proposals he pre-

pared were immense," Jay Last said. "Some of them filled boxes
a couple feet long."
Teck, had a bachelor of science degree in electrical engineer-
ing from the California Institute of Technology. He was made a
corporate vice president in 1966 and contributed greatly to our
systems operations over the years.
Teck was also one of Henry's chess-playing partners. Henry
had developed the talent, similar to the one that chess master
Reubin Fine had demonstrated to him, of being able to play
chess without seeing the board. One story relates that Henry was
playing chess with Teck with his back turned to the board, and
Teck was him what moves he made. Suddenly, during the
telling
match, Henry said, "Teck, you told me the wrong move three
moves back."
Allen Orbuch was another of our long-term executives. He
had been vice president and director of marketing for Litton's
Guidance and Control Systems division. He joined Teledyne in

1965 as assistant general manager of Teledyne Systems and was
made a vice president in 1966, and president in 1970. His back-
ground includes a bachelor of law and doctor of jurisprudence
degrees from the University of Minnesota. Allen served the com-
pany well for over 20 years. After Joe Smead departed to run
his own giant enterprise. Kaiser Electronics, very successfully.
21
Distant Force
and after Teck Wilson joined the corporate staff as head of our
Science and Technology focus group, Allen Orbuch was named a
group executive and supervised both the Systems Company and
component operations in the aerospace and electronics areas.
By January 1969, Teledyne Systems was being managed by
Joe Smead as president, with Allen Orbuch as executive vice
president, with vice presidents Teck Wilson, Dave Tidus, Earl
Kanter, Howard Shanks and Larry Kaufman, and with two new
vice presidents Ed Durbin and Hal Erdley joining the team at
that time. All of these gentlemen contributed greatly to the rapid

growth of Teledyne Systems, which became one of the largest
and most important of the company's operations.
At his first meeting with Henry, Jay Last recalls asking him:
"Are you trying to create another Litton?"
"Hell no," Henry replied, "I'm trying to create another GE,"
which explains why Henry's choices of companies to acquire
gradually became more and more diverse. At first it was a matter
of choosing those companies that were available at a reasonable

price, that were within his means to acquire, that fit, however
loosely, into his government and military business. Later he
would look afield to companies that were less and less related to
his original electronics, government, military markets, but would

diversify and contribute to the profitability of his company.
Many years later, Henry, looking back, said in a Forbes inter-
view, using his early ranch experience as a metaphor: "Teledyne
is like a living plant, with our companies the different branches
and each putting out new branches and growing so that no one
business is too significant." To him, diversification was an insur-
ance against catastrophe.
So, while semiconductor technology and advanced digital
electronic control systems remained one of his prime interests,
22
Henry began almost immediately to consider and acquire com-

panies that were in other related businesses that served the mili-
tary and commercial aerospace markets.
Systems technology is the art of combining a multiplicity of

diverse elements to work together efficiently and perform some
desired mission. The first step in that process is to measure cer-
tain quantities that have to be controlled, then computing the

steps needed to achieve that control, and finally providing the
required information needed to exercise that control. Those are
the steps that are done most efficiently by semiconductors and
computer circuits.
But in the real world, it is usually necessary to use that infor-

mation to provide some kind of physical or mechanical or elec-
trical action. One of the first steps the company took in that
direction was the acquisition of a company called Kinetics in
1961. Kinetics specialized in the design and manufacture of elec-
tromechanical products such as motor-driven switches and other
devices used in the operation of large missiles and space vehicles,
capable of handling electrical currents ranging from milliam-
peres to 500 amperes with great reliability under conditions of
severe stress and vibration.
This led to other acquisitions in the field of higher power
electrical products. These included Crittenden Transformer, in
1962, a company that made power transformers for applications
ranging from computer power conditioning, to oil well pumping

and drilling, and industrial power. Their sales of about $75,000 a
month when acquired were doubled to $150,000 by 1966 under
the management of Roscoe Powers.
Other companies in related fields included Inet, which made
rotary power systems, frequency converters, and uninterruptible
power systems for computers and other critical electrical appli-
23
Distant Force
cations, and Penn-Union and its subsidiaries, which added heavy

duty electrical connectors and cables to the product mix. This
company was our first purchased mini-conglomerate created by
the efforts of Clint Gerlach who continued to operate its divisions
for us, and which, strangely enough, brought the first consumer
product to Teledyne: the production of "Big Beam" flashlights.
Glenn Pacific brought further penetration into industrial markets
with controlled power supplies for automatic welding equipment.
Linair, mentioned above, was a manufacturer of high-preci-

sion hydraulic fittings and other critical components that actu-
ate control surfaces, flaps, landing gear, weapons deployment
and other physical actions in virtually every aircraft and space
vehicle. This company produced over 5,000 different fittings for
hydraulic applications in steel, stainless alloys and titanium, for

systems that must operate reliably at pressures of up to 10,000
psi, and moved Teledyne into the field of hydraulics.
Linair then focused the company's attention on other

related acquisitions in the field of hydraulics, or fluid power
systems, as the company later called them. Sprague Engineer-
ing, manufacturers of hydraulic test equipment, pumps and
components used in missile and aircraft as well as in mining,
food processing and petrochemical industries, was acquired in
October of 1963 for $100,000. Sprague became a major oper-

ating unit of the company, with sales of $2,900,000 in 1969,
peaking at $10,571,000 by 1981. Their elaborate test consoles,
filling an entire room, were used at TWA's Kansas City base for
testing and evaluating jet engine fuel pumps, critical items in
flight safety. Other equipment for the aircraft industry included
mobile and permanently installed pneumatic jet engine starters

used in air terminals around the world. The company was also
chosen by the Boeing Airplane Company to supply a remote
24
control pumping system for testing the servoactuators on the

Saturn V rocket engines.
Robert Sprague, founder of this company, became a highly
respected Teledyne executive, as well as a company director,
and assisted in later acquiring other related companies such as
HydraPower, manufacturer of hydraulic system components for
aircraft, subsea petroleum exploration and production, and other

industrial uses; Republic Valve, a manufacturer of hydraulic and
pneumatic valves for the same industries; and Farris, an interna-
tional maker of pressure relief valves that provide safety in many
high pressure industrial processes including the nuclear industry.
Bob Sprague was a very creative guy with a lot of interests.
He and I used to play golf at Long Beach where he had a boat.

He was very interested in boats and he liked to build boats and
he got the idea that he would like the company to build a hydro-
foil boat. We were mostly interested in the hydraulics business in

relation to the aircraft industry, and we weren't really interested
in boats. Henry was a yachtsman, however, and that may have

influenced the decision, but Bob finally convinced us all that his
company should build one, and they did. In fact they designed
and built three 34-foot hydrofoil boats used as excursion craft
at the Sea World Marine Park in San Diego that were very suc-
cessful and transported people to Catalina Island and back. This
later led to the construction of two 58-foot gas turbine powered
hydrofoil boats for the Woods Hole, Martha's Vineyard, and
Nantucket Steamship Authority of Massachusetts, designed to
operate at speeds up to 40 knots.

By the end of the second fiscal year in October 1962, Teledyne
sales had reached $10,438,367 with a net income of $331,518.
The company had won significant contracts from NASA, and the
US Army and Navy. Jay Last's Amelco integrated circuit business
was successfully producing products, with their staff increasing
from about 50 to 200 by year's end.
25
Distant Force
In making these acquisitions Henry depended on several

very talented management people to survey the field for possible
acquisitions and evaluate them as to their technology, manage-
ment, history, and markets and desirability as Teledyne prop-
erties. Henry, however, made the final decisions based on his
judgment as to their value, suitability and potential profitability,
as well as their fit into the rapidly expanding family of Teledyne

companies.
One of these men was Claude Shannon, who was a good
friend of Henry's from his days at MIT and was a director of the
company for many years. He also played a valuable part in help-
ing Henry evaluate many of Teledyne's important acquisitions.
Russ Kiernan, whose company was acquired in 1964, brought
optical expertise and helped Teledyne expand into this related
field with various other acquisitions. He also became one of our

top managers and group executives. I'll have a little more to say
about Russ later on when I discuss his company and its accom-
plishments.
Bill Shannon (no relation to Claude) also came to the com-
pany in 1964 when a company called Servomechanisms was
acquired. It had been established in 1946 and Bill was its manager
and founder. It was later combined with United Electrodynam-
ics, acquired in the same year, and became known as Teledyne
Controls, one of Teledyne's most successful profit centers. Bill,
who later became a director of the company, was an excellent

manager and was very active in helping Henry and me search
out and evaluate other companies in the electronics and systems
field, which would contribute to Teledyne's growth and success.
Bill was a very close associate and friend of Henry's, and when he
died, in the late '70s, I had never before seen Henry so shocked
and distressed.
16
James Nisbet came to Teledyne later, when my company, the

Vanadium-Alloys Steel Company (Vasco), was acquired in 1966.
His company, Allvac, which was a subsidiary of Vasco, was a
producer of precision, high-purity vacuum melted alloys for the
aerospace and other industries. In our efforts to expand at Vasco,
I had approached Jim in October 1964 to discuss the possible
acquisition of his company. Jim and I had known each other for
about 25 years through our metallurgical interests and member-

ship in the American Society for Metals. After some months of
negotiations, Vasco acquired his company in 1965.
Jim was a pretty tough businessman and negotiator and had
a real entrepreneurial spirit. When Vasco finally joined Teledyne,
Henry and I put those qualities to work and Jim became one
of our most aggressive and successful acquirers of suitable com-

panies. We called them "finders." He became a vice president
and worked with me through the remaining years of the 1960s,
adding a variety of metals industry companies to the Teledyne
roster. These included companies in the fields of machine tools,
roll forming, die and tool making, welding power supplies and
consumables, as well as exotic metals widely used in critical aero-
space, nuclear and industrial applications. He was a very impor-

tant person in our development and success.
There were also other outside so-called "finders" who were
employed to help in these evaluations and make recommenda-
tions regarding acquisitions in various fields. These men provided
expertise in semiconductors, computers, physics, chemistry, met-
als and many other specialized fields. Angus MacDonald wâs
one of these. He was an entrepreneur and a good friend of Jim

McKay's and was instrumental in helping us acquire Jim's com-
pany, which was an important supplier of welding consumables
and chain products. was renamed Teledyne McKay. Angus
It
became a very good friend of Henry's and mine and helped us in

a number of other acquisitions. He was an interesting fellow and
27
Distant Force
one of his avocations was the study of time: how the concept of
time had come to be and the many early instruments that men
used to measure time.
While we are talking generally about the acquisition process,
I would like to say that this was not a new or unusual idea to
either Jim Nisbet or me. Vasco had been acquiring companies
as early as 1927, and others in the late '30s, and when I came
on the scene we acquired several companies that later became
individual Teledyne companies after Vasco had been acquired.
There were the major ones: Mefco, Pittsburgh Tool Steel Wire,
and Jim's company, AUvac itself. Then, in connection with Jim,
we had acquired some very small companies in the titanium busi-
ness. One of these was in Wooster, Ohio, which later became
Teledyne Titanium under Allvac.

So with that experience of working in a company and see-
ing how the presidents of these companies stayed with us and

became an important part of Vasco, it didn't seem at all strange
to Jim and me to come into Teledyne and see that same acquisi-
tion process going on. In fact, if Teledyne hadn't acquired us, I
think Vasco would have continued to grow in the same way.
As background to Teledyne's acquisition period, it is interest-
ing to consider what was happening in that decade of the '60s.
During and after the end of World War II there were all sorts of
emerging new technologies, new ideas, new markets and new
opportunities that hadn't existed before the war. There were
many opportunities for small new companies to go into busi-
ness during the war to provide the diverse products needed for
the war effort, and many did so very successfully. In addition to
this, many veterans came out of the military services at the war's
end, and, through the GI Bill, had an opportunity to get tuition-
free educations at some of the most prestigious universities and
28
schools in the country. They learned technologies they might

never have had an opportunity to learn otherwise. They studied
basic science skills such as physics, chemistry and mathematics,
and also specialized technologies such as electronics, metallurgy,
geophysics, oceanography and others. And some of these men,

and women, used theirnew knowledge to start companies, often
on just a shoestring, own family money.
with their
By the 1960s, many of these companies had matured into
established profitable companies, and many of their owners were
ready to relinquish control and do other things with their lives.
Or they had reached the point where they needed more capital to
continue to develop and were looking for ways to do that. Then
along came a company such as Teledyne, with a high P/E ratio
that was growing rapidly and was interested in acquiring them.
It was a wonderful opportunity for these people, and many of

the companies that Teledyne acquired were this type of family-
owned company.
Without trying to be all-inclusive, I can recall that among our
many acquisitions the following fit well into such a category:
Company Family
Casting Service in LaPorte Indiana Lange

Monarch Rubber in Hartville, Ohio Himmelright
A.H. Wirz in Chester, Pennsylvania Cox
Geotech in Dallas, Texas Heroy
Kiernan Optics in Los Angeles, California Kiernan
Sewart Seacraft in New Orleans, Louisiana Sewart
United Electrodynamics in
Los Angeles, California Holmlund
Getz Dental in Chicago, Illinois Getz
Sprague Engineering in Los Angeles, California Sprague
29
Distant Force
In choosing them, Henry, with the guidance of his special-
ists who were selecting and recommending them, looked care-

fully at all aspects of their business, from their growth history,
to the specific technologies they possessed, the markets for their

products and, of course, their potential profitability. He was also
very interested in the managerial talents of their owner/manag-
ers. Whenever possible, Henry wanted these people to stay on
with Teledyne as managers of their own operations, since they
were most knowledgeable about their fields, their markets and
their production technologies. Many did just that and became
long-term members of Teledyne's management cadre. Some later
became our group executives, supervising a number of other
companies in their field.
In a September 1967 interview with Forbes magazine Henry

said:
We have what is called a "management inventory."

We work our heads off to increase our own capabil-
ity at collecting and promoting the right people. To the
extent we succeed, the whole company will succeed.
We increase our bets on the men who seem to be per-
formers.
We try to get all our people, instead of competing
amongst each other within Teledyne, to look outside
and see that the real competitors are all the other large
corporations in the U.S. Our objective is to increase our

rate of earnings faster than they do. It is a lot of fun. As
a result, we visualize it as a competitive game.
Henry also used stock options to attract outstanding key per-

sonnel to his company. Without this ability it would have been
extremely difficult, if not impossible, to have brought into the
company so many highly qualified technical and management
personnel in such a short time.
30
It is also interesting to note the amazing amount of inflation

that has occurred since the mid 1960s, and its effect on executive
salaries. I have found that the salaries of most of the CEOs of the
companies we brought in at that time were under S30,000 a year
and often considerably less. Only a very few were over S50,000.
And the number of small start-ups and rapidly growing enter-
prises in that era was equally amazing. It seems that Teledyne
had become the substitute for IPOs for many of these companies
in that decade.
Even as he diversified his company, Henry didn't forget his
original direction, and there was continued expansion into both

electronic systems and system components for control applications
and related activities. The semiconductor industry had moved from

discrete transistors that had to be individually wired into electronic
circuits, to integrated circuits which combined many individual

transistors and other electronic components on tiny chips of sili-
con, and finally to the integration of dozens of integrated circuits

and components on a single ceramic substrate the size of a postage
stamp. Teledyne was at the forefront of these developments during

those years, and by 1965 was producing microelectronic hybrids
called MEM As, (Microelectronic Modular Assemblies) with as
many as 25 separate integrated circuits, as well as other precision
electronic components, on a 3/4-inch square substrate. This was

being done at our Amelco Panama Street facility which was later
renamed Teledyne Microelectronics.

In our 1965 annual financial report, the president's letter
stated:
In previous annual reports we have emphasized

Teledyne's fundamental dedication to the field of auto-
matic control systems, equipment and components. We
31
Distant Force
have described the products of this field as consisting of

several elements: sensors or instruments for measuring
quantities to be controlled; computers for calculating
from the measured quantities the kind and degree of
control to be effected; actuators to carry out the control
function; communications links to connect together
the elements of the control system; and displays for the
human beings concerned with the operation.
The letter goes on to explain the rationale for moving from

strictly aerospace applications into other fields.
Automatic processing and control equipment are

penetrating into every area of commerce and industry,
and are making itself felt in every facet of our daily lives.
In cultivating this limitless field, Teledyne applies itself to

certain carefully selected market areas where the rate of
growth and degree of opportunity are especially great.
Thus, at the present time the markets we primarily serve

are three in number: aviation electronics, industrial pro-
cess control, and earth and ocean science. Utilization of
electronic equipment and devices is rapidly increasing in

all three of these expanding markets.
In addition to internal developments such as these,
our capability was further enhanced through the
acquisition of several talented organizations during
the year. In each case, these acquisitions contributed
to the further penetration of our chosen market areas.
Thus in aviation electronics. Automated Specialties
brought us its outstanding capability in automatic
throttle controls, instantaneous vertical speed indica-
tors, and angle of attack instrumentation for military
and commercial aircraft.
32
In the field of industrial controls, Glenn Pacific

added to our capability with its line of controlled power
supplies for automatic welding equipment. Our posi-
tion in the earth and ocean sciences was strengthened
by the addition of the Geotechnical Corporation, with
its know-how in seismic technology and its growing
activities in the ocean sciences.
Also supporting our general position in electronic technol-

ogy was the addition, in 1965, of Microwave Electronics, man-
ufacturers of TWTs (traveling wave tubes), which are capable
of generating and amplifying microwave energy at high power
levels over a broad bandwidth of radio frequencies. These prod-
ucts have wide application in military countermeasures systems,
and are also used in uplink transmitters for satellite communica-
tions systems as well as in many other applications. This com-
pany, which was renamed Teledyne MEC, was originally under
the management of Stan Kaisel. He later left the company and
I assigned it temporarily to Russ Kiernan in 1967. It eventually
became part of Joe Smead's Systems Group.
Another acquisition at that time was the Crystalonics Com-
pany, which broadened our advanced line of transistors and other
semiconductor devices that are basic to the entire field of electron-
ics. Crystalonics was the firstcompany to develop and produce
FETs (field effect transistors) and make them commercially avail-
able; to produce epitaxial junction switching transistors; and to
present light sensitive FETs. It also produced a number of other
advanced, high reliability semiconductor devices and hybrid

microcircuits for critical aerospace and military programs.
The expansion into other areas of the electronic and electri-
cal fields continued as suitable companies were found. As men-

tioned above. Bill Shannon's company, Servomechanisms, and Art
Holmlund's United Electrodynamics, which included a subsidiary,
33
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Pacific Industrial Controls, were acquired in 1964 and merged

together. Art Holmlund who was the president of United Elec-
trodynamics, brought both technical and management talents,
with degrees from Stanford University in engineering and business
administration. Bill was put in charge of the joint operation, which
was renamed Teledyne Controls, and which became one of the
company's most important profit centers and is still in operation
today as part of the recently formed Teledyne Technologies, Inc.
Teledyne Controls makes large-scale instrumentation systems
for monitoring, controlling and acquiring data for commercial
and military aircraft and spacecraft, as well as for many indus-
trial uses and government applications. Among its many products
are the Aircraft Integrated Data Systems and Data Link Systems
used today by virtually every commercial airline throughout the
world to satisfy mandatory flight data recording requirements
and to monitor aircraft and flight crew performance.
These systems are vital in the day-to-day operation of com-
mercial and military aircraft throughout the world. Teledyne
built thousands of these data recorders for commercial airliners
and space missions, as well as military aircraft, and still does
today. The company's data acquisition and recording systems
have been used on almost every space launch even up to the
present. Today, these data systems on commercial airliners can
automatically download all pertinent flight data to the airline's
operational headquarters by wireless link, as soon as an aircraft
touches down. They give airline management nearly real time
information on their operations, and provide data for aircraft
maintenance and safety monitoring, and even for recording the
in-flight time of pilots and aircrews for payroll purposes.

One part of these systems is the so-called "black box"
recorder, which is actually painted a high visibility orange color
for easier recovery, that are so eagerly sought after whenever an
aircraft or spaceship disaster occurs. They often provide the only
34
insight into what may have gone wrong. They are rarely thought
of until an accident occurs, yet are a vital necessity in airline and
spacecraft operations.
Art Holmlund had a very auspicious career with us. He
was later made group executive of our newly formed Industrial
Products Group, which included Crittenden, Inet, Pacific Indus-
trial Controls, Analytical Instruments and Industrial Electron-
ics, and contributed greatly to the success of these operations.
In 1969 we moved him to our corporate staff to direct our
employee relations activities, which he did very effectively until
his retirement in 1981.
Electrical relays became one of Teledyne's component prod-

ucts when we acquired company called Radar Relays, run by
a
Bill Arrasmith, and another company simply called Relays man-
aged by Marv Blitz. We combined these two companies, and a

third, into a single company under the name Teledyne Relays.
The engineers of this new company looked at the products they

had been producing and one of them suggested that they develop
a new product —
tiny electromechanical relays small enough to
be sealed hermetically in a standard TO-5 transistor package.

Relays are electrically operated switches, and, even in these days
of solid state everything, they play an important part in many
electronic systems. These new products were precision compo-
nents designed to operate reliably under conditions of shock and
vibration and came to be used in virtually every major military
and aerospace program, as well as in high-end commercial appli-
Managed by Marv Blitz, this development made the
cations.
company one of Teledyne's most profitable. Though the company

sufferedsome unfortunate ethics problems in later years, those
problems were corrected, and the company is still in operation
today as part of the new Teledyne Technologies.
35
Distant Force
In 1963, the company entered the field of optics with the

acquisition of Kiernan Optics. Russ Kiernan, whom I mentioned
earlier, founded it in 1950. His company produced such products
as the special space-qualified windows for the Apollo spacecraft,
through which US astronauts saw the earth for the first time as a
lonely blue planet in the blackness of space, and through which
they got their first close-up view of the moon's surface. Other
unique products were the infrared optical domes that efficiently
transmit infrared energy to the infrared detectors that guide

US missiles and aircraft. These domes are made of pure silicon
because of its transparency at infrared wavelengths.

Russ helped in the further acquisition of companies in the
optical field, including the D. B. Milliken Company in 1967.

They were makers of high-precision, high-speed 16 mm rugge-
dized motion picture cameras that flew on and recorded visual
information on many manned space launches and missile tests.
The shot that is seen so often, even today, of the spent stage of
a rocket being released and falling back in space, as the space
vehicle on which the camera is mounted continues on its way, is
from one of the Milliken films.
Russ has many interesting and enlightening memories of the

early days of Teledyne, and onward, and I think it's appropriate
to let him tell the story in his own words:
My first contact with Henry was in 1963 through

a professor a USC where I was teaching in the gradu-
ate school of business, which I was doing concurrently
with running my own company, Kiernan Optics. Hen-
ry's interest in my company was because he wanted a
precision optical capability while he was striving to
obtain the IHAS Integrated Helicopter Avionics System
36
contract. Our first meeting was brief, but it was one in
which each of us spoke with complete candor, and that

became the basis for our lasting relationship. All our
meetings were short, but they were very effective. In our
first meeting we had agreed on a mutually satisfactory
figure for the acquisition, but during the short period
in which the deal was being consummated, the Tele-

dyne share price declined slightly. I requested a rene-
gotiation, but Henry quickly responded, 'You wouldn't
be making that request if the price had gone up!' End
of discussion! Looking back on that, I thought this is
the kind of man I respected and wanted to work for.
Either during the acquisition period, or shortly thereaf-

ter, Henry made a very informal appearance at Kiernan
Optics, which created an immense impression on our
employees.
It had been my intention to return to USC to teach
full time and write a book, but Henry asked me to stay
around for a while. That "for a while" lasted 18 years
as I saw Teledyne grow from a $20 million a year com-

pany into over $3 billion annually.
With my doctorate in business administration, I was

leaning toward obtaining a law degree at USC because
I felt that a legal background was necessary for a small
business operation. But with the acquisition by Tele-

dyne this wasn't necessary since they already had an
excellent legal staff, as well as outside attorneys such as
O'Melvaney and Myers. When
came time to dissolve
it
my original corporation I asked Henry if he would turn

that task over to his legal people. "Oh," he said, "We
can dissolve it ourselves."
I thought that was a strange statement, but I pro-
ceeded —with most of the task carried out by my sec-
37
Distant Force
retary — to do all the research and obtain the necessary

forms. We accomphshed the task very quickly, and at a
total cost of $37 for the forms we needed! That taught
me a constructive lesson, that there were many ways to
eliminate excessive legal fees, and other costs for that
matter, in running our operation. I never forgot that
lesson in many circumstances that occurred during my
18 years under Henry's leadership.
During the very early period, 1963-64, Henry
sought various methods for raising cash to support com-
pany operations. One technique he used was to borrow
on the physical inventories of the individual companies.
Henry knew Kiernan Optics had a sizable inventory of
expensive equipment and tooling. We priced each indi-
vidual item and were able to raise a considerable sum
for the corporation. This made us all feel good —that
is until we learned our facility had to make monthly
payments on the loan! This took a considerable amount
of managing, but we were pleased to learn that it had
made the corporate payroll for the week. And, on a
couple of occasions we ourselves were running short,
and corporate came through each time.
During this early period, there was close coordina-
tion with Henry on our accounts receivable. We would
send our accounts receivable list to corporate so they
could ascertain when large accounts would be paid.
One week, in particular, Jerry Jerome drove all the way
to our optical shop to collect a check. On another occa-
sion, I personally made a special trip to corporate to
deliver a check to Henry.
These irregular transactions seemed to build a
stronger bond and made us all feel we were a part of
a close-knit organization. As the years rolled by and
38
the company grew, financial staffs were formed to take

shghtly.
care of those matters and that closeness faded
of the
But those early bonds lasted throughout the life
company. Henry never forgot, either!
One humorous note on those early days, was the
following: Henry would sometimes call me
and invite
me to have lunch with him. We always went to a Gar-
dena poker parlor because the lunches were inexpen-

sive. I would drive down and pick
Henry up at his El
Segundo These lunches gave us the opportunity
office.
for discussions
to get away from the office environment
about the company, or just to chat. When it

was time
to pay for our lunches, Henry would always have me

pick up the check. I was surprised at first, but I was
lunch
always delighted to have the privilege of having
teach me
with him. I think maybe he was continuing to
of frugality by not inviting me to an expensive
the value
restaurant.
During those early mid-60s days there was
to
really no formal organizational

structure even though
considerable number of new acquisitions

were being
a
made each month. Some of the smaller firms that were

either
acquired were merged into existing operations,
physically or by management control. Most of these
stock
acquisitions were made by means of Teledyne
which was restricted; that is, the holder could not sell
the stock for a set period of time— probably two or
three years.
witnessed some very disgruntled individuals
who
I
and worth-
looked upon Teledyne stock as wallpaper,
less. Henry would permit the sale of such stock infre-
disappeared from
quently, but these individuals soon
the scene to seek fortunes elsewhere.
How
sorry they
39
Distant horce
must have felt, years later, as Teledyne progressed into

a giant corporation.
Whenever a high level management position had
to be filled, that company's group executive would
company management until a qual-
usually take over
ified many cases a
replacement could be found. In
corporate accounting person would immediately be
assigned to new acquisitions in order to maintain
continuity and quickly establish uniform corporate
financial guidelines.
Henry utilized my talents not only to oversee the
other optical companies that were merged into Tele-

dyne — four, as I recall — but also to help in his merger
activities, both in evaluating possible acquisitions and
in integrating the new ones into our activities. An audit
group had not yet been formed, so most of the ana-
lytical work was performed by individuals. In a few
cases, we determined that the acquired company had

overstated its inventory in order to make the relative
worth of the company seem higher than it really was.
When this was brought to Henry's attention he would

tell us to write down the balance sheet and make sure
the practice wasn't repeated. Henry had the knack of
recognizing the true value of an acquired company for
its potential and its people. To the best of my knowl-

edge, Henry never asked that an agreement be lowered
from the original deal.
During the 1960s, when Teledyne was acquiring

small to medium-size companies at a fairly rapid pace,
it was imperative that we instill the Teledyne disciplines
as quickly as possible. These ranged from our cash trans-
fer policies to our organizational control system. Some
people were uncomfortable with these new techniques.
40
but they were necessary from a corporate standpoint.

Dealing with this problem led to the establishment of a
system of group executives who were assigned to oversee
groups of related companies. We ultimately organized
our diverse assemblage of companies into 16 groups,
each under the supervision of a carefully chosen group
executive who had experience in the particular tech-
nologies and markets of their companies.
As successful as the company became, Henry never
feh that luxury automobiles were a necessity at any
facility. In fact, at one point Henry suggested that
Ford
Pintos be used for company cars at all facilities. This

caused a bit of a problem when Jim Steitle and four of
6'5'\ 250-pound
his staff (they were all big men in the
class, who worked in the offshore oil industry) tried
to squeeze into a Pinto. It was an impossible task. The

policy was later amended so that large station wagons
could be used for field conditions.
I remember my meeting with Henry on Febru-

final
ary 1, 1981, my day of retirement after 18 years

with
Teledyne. I mentioned my desire to write an instruc-
tional book on business related matters, based on my

experiences. Henry immediately sat down at his newly
acquired computer (it was the first such device at Tele-
dyne in those days) and proceeded to instruct me in
the modern methods of writing using a computer. He

spent about a half an hour explaining these
modern
techniques. I was truly amazed that this man who was
running a $3 billion corporation would take the time to
be interested in my retirement ambitions. I never com-
pleted that business policy book, but my thoughts of
that last meeting still remain with me to this day.
41
Distant Force
Tcledyne began its entry into the field of geophysics with the
acquisition of the Geotronics Company, in 1963, managed by
Al Cocking, who became another long-term Teledyne manager.
This company combined aerial surveys and computerized ana-
lytical processing systems to produce photogrammetric surveys
that provided precise coordinates and elevations for any points
visible on the photographs. These capabilities were applied to
projects ranging from highway planning and precise positioning

of offshore and onshore drilling rigs, to large area geodetic sur-
veys. Interestingly, one of the company's largest early contracts

was to survey an area of Iran, roughly the size of California, for
the US Army Map Service, data that is undoubtedly still of great
value today.
As an interesting sidelight to this story, in later years I was
helping to redesign the Los Angeles Country Club golf course,
which we could look down on right next to our corporate offices.
We simplified the project greatly by having Al Cocking's people

come over and do an aerial survey of the course, which gave
us the exact relative elevations, and positions of the holes and
greens and so forth. So we didn't have to do an on-the-ground
survey to know all the gradings and locations of things. It saved
a lot of time and effort. Their services were used in a lot of civil
engineering projects of this kind.

Our activities in earth sciences were further expanded when
we acquired the Geotechnical Corporation in 1965. We later gave
it the name Teledyne Geotech. They were developers and mak-
ers of seismological instrumentation. This was a good example
of the family-owned type of business that was often amenable
to acquisition. Owner Bill Heroy, Sr. retired at the time of the
acquisition and his son Bill Jr. took over as president. Jack Ham-
ilton, who was vice president and general manager of the com-
42
pany when we acquired it, later headed up this operation and

became a group executive of the company's geophysical opera-
tions. He contributed greatly to Teledyne's success and became a
significant stockholder.
These capabilities were further expanded with the acquisi-

tion of the Earth Sciences company, makers of seismometers in
Pasadena, and the National Geophysical Corporation, which

was doing oil exploration work in Canada, the US and Austra-
lia, and also ocean surveys. Both were incorporated into Tele-
dyne Geotech's operations. In 1963, the company was chosen
to install what was then the world's largest seismic observatory
at the Tonto Forest Seismic Observatory in Arizona. It included
80 seismometers distributed over an area of 23,000 acres. This
record was quickly eclipsed by the Large Aperture Seismic Array,

LASA, which was also installed and operated by Teledyne. It con-
sisted of 525 Teledyne seismic instruments buried in concentric
circles over an area of 15,000 square miles in Montana, and was

the most advanced seismic listening system ever produced. It was
capable of detecting, pinpointing and monitoring underground
nuclear explosions that occurred anywhere in the world. Beyond
policing nuclear activity, this technology offered scientists a new
tool in detecting and measuring otherwise undetectable seismic
activity useful in the study and prediction of earthquakes.
Among Geotech's other products were ultra-slow-speed
tape recorders that could record data on magnetic tape at tape
speeds ranging from 0.03 to 0.09 inches per second. This permit-
ted seismic and other data to be acquired and stored at remote
unattended locations for periods of from 10 to 33 days without
changing tape reels, a capability then vital in the efficient collec-
tion of this type of long-term information.
One of the company's seismometers, sealed in a gold-plated
canister, was taken to the moon by Apollo astronauts and left
there to detect lunar seismic activity. It telemetered data back to
43
Distant Force
earth periodically in NASA's Apollo Lunar Surface Experiments

Package known as ALSEP. We made other seismic instruments,
called strong motion accelerographs, which are used to moni-
tor dams, nuclear power plants and other structures that might
be damaged by seismic activity, and to measure the response of
large buildings, bridges and other structures, such as towers and
large antennas, to wind and earthquake forces.
It is quite interesting how Teledyne's technologies actually

did expand like a branching tree, as Henry had said, with each
new technology opening theway into other related technologies,
and these into still others. In many cases, when managers of the
individual companies, or their group executives, saw opportuni-
ties in related fields, they themselves recommended acquisitions
of other suitable companies.
Our geophysical capabilities and seismic products led us into
the field of oceanography and offshore petroleum exploration,
where seismic techniques are used to profile the geological strata
of the subsea-bottom to uncover likely places at which to drill oil
wells. This led to further expansion of Teledyne's activities into
the petroleum industry.

The acquisition of a company called Independent Exploration
of Dallas, run by Jim Frasher, who became another long-term Tele-

dyne executive, put us into the business of actually carrying out
on-land and subsea seismic surveys for petroleum companies on
a contract basis. We also made proprietary surveys, in which the
data wasowned by Teledyne and could be sold to petroleum pro-
company was later renamed Teledyne Exploration.
ducers. This
Almost simultaneously, we acquired Movible Offshore
headed by Jim Steitle. They built and operated large offshore
oil drilling platforms for the petroleum industry. Sewart Sea-
craft, another acquisition in this field, was a producer of large,
high-speed aluminum seagoing vessels for transporting drill-
ing crews to and from these platforms in the Gulf of Mexico.
44
Sewart also manufactured and sold very practical naval craft

to the US Navy. They were mostly for transporting personnel,
and a few were for other military purposes. These were the now
famous — or infamous — Swift Boats so much mentioned in the
2004 elections campaign.

We had several of our drilling rigs for Movible Offshore built
in Singapore by the Bethlehem Steel shipyard. When our first
really big rig was built there, we brought it to the US by sailing it,
drawn by a tug, through the Suez Canal and the Mediterranean

Sea and across the Atlantic during the hurricane season. That
was an exciting episode in Teledyne history, let me tell you, but
we made it! We built two rigs initially, and then we decided to
build a third.
We stumbled a bit on that last one in 1981. Our timing was
off on the purchase of that $45 million rig because we made it just
before there was an oil glut and the bottom fell out of the drilling
market. It may be hard to believe today, but oil sold for only $10
a barrel in 1986. For a long time the Gulf of Mexico was filled
with idle drilling rigs, including ours, sitting in mothballs for

years in the late '80s. We eventually sold off that equipment and
took a significant loss. Neither Henry nor I ever said we didn't
make mistakes. We just made sure there was a high ratio of suc-
cesses to failures, and the company's history attests to that.
Even some of our smallest acquisitions in this field developed
into successful profit centers. A good example was the Merla

Manufacturing Company, which we acquired for only $80,000. It
was a manufacturer of gas-lift equipmient, w^hich helped improve

the productivity of deep or marginally producing wells by inject-
ing high-pressure gas under carefully controlled conditions. It
also produced specialized valves and many other products used

in petroleum production. At the time we got it, its annual sales
were only about $360,000. By 1977 it was doing $7 million a
year and was still growing.
45
Distant Force
All of this gave Teledync a substantial presence in support
services and products for the petroleum industry.
Other acquisitions moved Teledyne into different but related
fields as well. An unusual company that produced products used

in many aircraft and space applications was McCormick Selph,
run by Frank LaHaye, acquired in 1964. Their primary products
were controlled explosive devices used to perform various actions
in aircraft, spacecraft, missiles and other systems. These explo-
sive devices provide a stable and reliable means of storing energy
in chemical form, which can be released almost instantaneously
on demand to perform some action. When properly controlled
and directed, they are one of the most reliable ways of perform-
ing certain tasks such as separating spent rocket stages from the
main body of a missile or manned spacecraft and igniting the
next stage rocket. In crew escape systems they can be used to
cut an opening in the skin of a vehicle to provide crew egress,
remove an aircraft canopy, eject a pilot in his seat, sever his con-
nection to that seat, deploy a parachute, all carefully timed and

sequenced in fractions of a second.
There were far too many acquisitions of companies for me
to discuss each one in detail. Many were joined together and
became single Teledyne companies or were absorbed into exist-
ing companies, so I have chosen the major ones that contributed

to the various important directions the corporation took. By the
end of 1965, however, Teledyne had acquired 34 new companies
and organized them into efficient profit centers that were contrib-
uting to substantial sales and profits for the corporation. 1965
was the midpoint in Teledyne's decade of acquisitions, but less
than half of the final number of companies had been acquired at

that time.
46
The company made a major breakthrough in January 1965

because of Henry's original interest in inertial control systems for
aircraft. He and his staff had undertaken the development of an
advanced airborne computer system that would allow helicopters
to take off and land in remote areas without ground navigation
aids, to fly in close formation in zero visibility, and to maneuver
over difficult terrain without pilot assistance. Fed data from an
inertial platform and radar, it became known as the Integrated
Helicopter Avionics System or IHAS. Competing against some

of the largest, most well-established companies in the field, such
as IBM and Texas Instruments, Teledyne was awarded the prime

contract for this system by the Navy. Suddenly, Teledyne had
become a major factor to contend with in the aerospace and mili-
tary systems industry and the company's stock soared from $15
a share to $65 within a year. This gave the company resources to
acquire much larger companies than it had been able to before.
Sales had reached $86,504,000 in that year, with net income
of $3,402,000. Company employees had risen from 450 in 1961
to 5,400 by year's end. It was an incredible record for a company
that was only in its fifth year of existence.
(in millions except per share amounts)

Distant Force
The Vasco Story
Since Vasco and its subsidiaries, as well as our later acquisitions
in the metals industries, became such an important part of Tele-

dyne's history, and since I became president in 1966 and held
that job for 24 years, I think it is appropriate to explain my back-
ground and how I became associated with it.
As mentioned, I had known Henry since our early days at the
Naval Academy, and we had remained friends ever since, but it
was not until July 1966 that I entered the Teledyne picture. I had
left the Academy at the end of my sophomore year, and Henry
left a year later. I had been a good student. Henry was first in our
class and I was eighth, thanks to Henry's help in mathematics.
My family didn't have a great deal of money, nor did I, so
there I was, back in my hometown in Pennsylvania, looking for
a summer job and trying to get a scholarship so I could continue
my education. I wasn't sure exactly what I wanted to do, but
one thought I had was to try to get into Princeton and become a
mathematician, since Henry got me really interested in that field.
My dad, however, wanted me to stay closer to home in Pitts-
burgh, so one day he went with me to Carnegie Tech. He had

made an appointment with the dean of engineering there to see
what they could offer me. We went into the dean's office at the
University, interrupting a meeting he was having with some other

faculty members. The dean asked me what it was I wanted to do.
I said I wanted to finish the last two years of my undergradu-

ate work, and that my mother wanted me to go on to graduate
school in whatever field I chose.

Well, he said, what would you like to study? I told him I didn't
really know, but I had thought of studying mathematics. Then,

one of the gentlemen in the room, whose name was Dr. Robert
Mehl and who was the head of the department of metallurgy,
48
spoke up and said: "I heard what you just had to say, and I won-
deredwhy you don't study metallurgy." I looked at him for a
moment and said, "1 don't even know how to spell that."
"Well, it's quite easy," he said. "You spell it with two Ls."
Many years later I told that story when I was at Carnegie Tech
dedicating the George A. Roberts Engineering Building. Every-
body roared at that. Then I added, "I can spell it now."
Dr. Mehl invited me to meet with him and discuss it. I did and
he offered me a scholarship, which I accepted. I needed to take a
course in chemistry to qualify as a junior at Carnegie Tech, so I
took some classes under professor Mehl that first year and told
him that I would like to do some graduate work with him. Rob-
ert Mehl was my mentor in those days, and we became lifelong
friends. And because I needed a summer job the next year he sent
me over to the Bell Telephone Laboratories in New York, where

I worked for that first summer. This was the company where
the transistor was invented, and I did my first vacuum melting
of metal there. I had never seen anything like that before, and I
learned a lot. That was where the technique of vacuum melting

metals was developed for the first time anywhere. In the job that
I had there, I worked under a very great metallurgical expert by
the name of Earl Shumacher, and my immediate supervisor was

Jack Scaff. Both of these gentlemen contributed greatly to my
knowledge and interest in the metallurgical field and encouraged
me to continue my studies in that field.
Mehl introduced me to a friend of his in Latrobe,

Later, Dr.
Pennsylvania, named Jim Gill. He was the chief metallurgist at

the Vanadium-Alloys Steel Company, also known as Vasco. Jim
gave me my second summer job while I was still in college, and
my lifelong association with Vasco began. Vasco was owned
by the McKenna family. They had started it in 1910 and ran it
very successfully all those years. Roy Carnegie McKenna and his
brothers had come to Pittsburgh from Scotland, where Carnegie
49
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himself had come from, and they became distributors of steels.

They were, in fact, the exclusive dealers and sales representatives
for the Firth Sterling Steel Company.

The McKennas told me a story about how they were trying
to improve the quality of high-speed steels back in the 1905-08
period. Very small amounts of vanadium metal were used in
high-speed steels at that time. The McKennas had learned that

some producers were using larger amounts of vanadium, as much
as 1%, which improved the quality of the steel considerably, and
they wanted the Firth Sterling Company to use that amount. As
sales representatives for Firth Sterling, they felt this was impor-
tant in order to keep the products they were selling competitive
with the products of other companies. Vanadium was an expen-
sive metal, however, and Firth Sterling decided not to do it.
So the five McKenna brothers (Roy was the youngest of the

five) decided that if Firth Sterling wouldn't do it they would do
it themselves. So they bought some land and started the Vana-
dium Alloys Steel CompanyThey put 1% vanadium in
in 1910.
their steel, and the alloy they produced was designated 18-4-1,
which meant 18% tungsten, 4% chromium and 1% vanadium.

It became the steel that was universally used for the next half
century, for tools, dies, taps, reamers and all normal cutting
tool applications.
At the end of World War I they had hired Jim Gill, who was
the first graduate metallurgist they had ever heard of. He came
from the Missouri School of Mines, and I worked with him on
that second summer job. Later, in 1942, when I had finished
my graduate work, he hired me as a full time metallurgist and I
began my real association with Vasco. The McKennas were still
very much involved in running the company, and they were very
fine people to work for. They were very supportive of me.
Jim Gill was one of the presidents of the American Society of
Metals and he introduced me to all of the people in that organi-
50
zation and eventually I became its president as well. Jim wrote

the initial book on tool steels, which was based on a series of
lectures that he had given in the late 1930s. Jim Gill actually had
hired me to expand and improve upon his book, so I became the
co-author of the book Tool Steels, first published by the Ameri-
can Society of Metals in 1944.
In 1959, Roy McKenna, who by then was chairman, died and
Jim Gill became chairman. A few years later, Jim died suddenly
and Lloyd Bowman, who had been their long-time vice president
of production, was made chairman and I was appointed presi-
dent in 1962. In those early years, I was responsible for the intro-
duction of Vasco Supreme, the first super-hard, high-speed steel

that revolutionized many industrial metalworking processes.
Matrix II and Vasco-MA were high-strength alloys that we also
developed at that time.
This was at a time when our nation was moving into the
space age and the development of both military and commer-
cial high-performance aircraft. There was a great need for ultra
high-strength and high-temperature resistant materials, and we
became a leading producer of 18% nickel maraging steels called
Vasco-Max, and another high-alloy steel called Vasco X-2, that

were used in these and many other critical applications. Dr.
Arthur Grobe, a classmate of mine at Carnegie Tech who worked
with me for many years at Vasco, participated in all of those
developments along with Dr. Jack Hamaker and Robert Gary.
During the was happening at Teledyne, I was
'60s, just as
helping Vasco to grow through a series of acquisitions that later

became important parts of Teledyne. One of the most important
of these was the AUvac Metals Corporation of Monroe, North
Carolina. This company had been founded by Jim Nisbet, who
later played a very important part in the acquisition and devel-
opment of many of Teledyne's other metals and machine tool
businesses.
51
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Jim had worked in General Electric's research department

and later went to Universal Cyclops Steel Company. While he was
with these companies he became very interested in the vacuum
melting process, which made it possible to produce extremely
high-purity alloys with improved properties that couldn't be
achieved by air melt processes. They had a small vacuum melt-
ing furnace in their research department and he urged Universal
Cyclops to build a larger plant to produce vacuum melted alloys
in production quantities, but they refused to invest the money. At
that time, indeed, we already had an operational vacuum melting
furnace at Vasco, which was patterned after the one that I had
seen and worked with at Bell Telephone Laboratories in 1938.
Being the aggressive entrepreneurial person that he was,
Jim got some financial backing and went back home to North
Carolina and started the Allvac Metals Company, specializing in
vacuum melted alloys. I had known Jim when he was at GE and
I knew he was interested in the vacuum process, as I was myself.
We had put in some vacuum furnaces at Vasco and I was disap-

pointed that Jim didn't let Vasco help him in that venture, but he
wanted to do it himself.
In 1962, after I became the head of Vasco, he and I were able
to discuss a merger. I enlisted his help and he was very influential
in getting the Allvac shareholders to agree to join Vasco. I had

acquired a little titanium business, Armetco, in Wooster, Ohio,
that made titanium wire, and he thought that a merger with
Vasco would be a good thing. It would allow him to expand his
operation into the titanium business. When he joined us we gave

him that little company to run and Allvac became an important
producer of high-purity vacuum melted wrought nickel, iron,
cobalt and titanium alloys, again vital in many critical aeronau-
tic, space and industrial applications.
Another Vasco acquisition of that period was the Metal
Forming Corporation of Elkhart, Indiana, which later became
52
Teledyne Metal Forming. They specialized in roll-formed metal

shapes used in myriad applications from aircraft engines to ortho-
pedic appliances. Archie Spratt who was their plant manager
when they were acquired was made general manager in 1966.
By 1965, Vasco consisted of six major divisions and was listed
on the New York Stock Exchange. In that same year we changed

the company name to Vasco Metals Corporation in order to bet-
ter reflect our growing diversity. In 1966 company sales reached
$43 million.
As good friends after our association at the Naval Academy,

Henry and I had followed each other's careers over the years by
means of visits and letters. For some time we had been talking
about the possibility of combining Vasco Metals with Teledyne.
Jim Nisbet thought it would be a very good idea. I introduced
him to Henry, and then he helped me in making a satisfactory
deal with the McKenna family and all the stockholders.

In my letter to Vasco shareholders on May 6, 1966 I wrote:
Prior to the first announcement of the merger, Vasco

common stock had been trading on the New York Stock
Exchange at a price between $18 and $22 per share.
On March 7, 1966, announcement of the agreement in
principle to merge with Teledyne was made. From April
15 to May 2, 1966, our stock was trading in the range
of $38y8 to $4iy4 per share. The dividend rate of $3.50
on the Teledyne Preferred stock [I'll explain more about
this later] will be equivalent to $1,167 for each Vasco
share now held, a 30 percent increase over the $0.90

dividend currently being paid on Vasco shares.
The merger took place on July 1, 1966. Each Vasco share-

holder received one share of Teledyne Vasco Preferred for 3.2
53
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shares of Vasco common. They enthusiastically approved the
merger, and Vasco became Teledyne's largest acquisition up to

that time. This marked Teledyne's entry into the high tech metals
business, and Vasco became one of more than 20 companies in
the metals industry that were acquired by Teledyne in that year

alone.
It has often been asked why Henry, with his deep electronic
expertise and focused interest in digital semiconductor-based sys-
tems technology, would decide to expand his company into the
specialty metals industry. One reason, he said, was that expertise
in chemistry, physics and metallurgy were all vital to the under-
standing and development of the semiconductor components
needed for advanced electronic control systems.
Henry was also aware, as we were at Vasco, that there was a
burgeoning need for many high-precision alloys and exotic met-
als in the aerospace industry — many alloys that had never been
made before —that could withstand the higher temperatures,
stresses and corrosion of severe applications in aircraft, space
flight, missiles and industrial processes including the nuclear
industry. Many of these products served the same major techno-

logical markets that the company's electronic systems served.
Much later, in the September 1986 issue of SKY magazine,
I was quoted in a profile they did of me as saying the following,
which I think still stands as a pretty good assessment of Vasco at

the time it was acquired:
We were a small company, turning out less than

one-tenth of one percent of total steel production in the
United States. But we became one of the world's lead-
ing suppliers of superalloys, high-speed and tool steels
to meet high performance needs of the aircraft/aero-

space, nuclear energy and chemical processing indus-
tries. Vasco achieved that capability by acquiring and
54
combining the expertise of five smaller companies.

That situation provided me with practical experience
in managing a loose-knit group of acquired compa-
nies —which is basically what I do today, only on a
much larger scale.
With the acquisition of Vasco, with its sales of $43 million in
1966, Teledyne became a fully integrated specialty steel producer

with electric arc melting, argon-oxygen decarburization refining,
vacuum induction melting and vacuum arc remelting for the pro-
duction of the highest quality steel products. In addition, AUvac,
as a major subsidiary of Vasco, was a world-quality major pro-
ducer of vacuum melted wrought nickel, iron, cobalt and titanium
alloys in billet, bar and special shapes, and now provided Teledyne
with these capabilities. With all these new capabilities, metals soon
became one of the largest segments of Teledyne's business.
When I moved to California to become president of Tele-
dyne, it was important to appoint manage Vasco's
someone to
operations in Pennsylvania. At that point I hired two people who

became very important to the company's future. One was Fred
Kaufman, who had been vice president of Universal Cyclops
Steel and who I put in charge of running the Vasco operation.

The other was Henry Wimmersberger, who was the president
of Pittsburgh Tool Steel Wire that Vasco had acquired earlier. I
named him to be direct assistant to Fred Kaufman. Fred was sub-
sequently made a vice president of Teledyne and managed a large
number of our other metal working operations, which had been
acquired through the efforts of Jim Nisbet. Fred worked until
1981 when he retired and was named vice president emeritus by
the Board of Directors.
A number of people who had been with Vasco and Allvac
stayed with us at Teledyne and contributed greatly to our success.
John Andrews was one. He was the third or fourth man at Allvac,
55
Distant Force
under Jim and his brother OUver. We bought the Ohiocast Com-
pany in southern Ohio, which made nickel/chrome alloy castings
for high-temperature use, and John ran that for a while. Later,
when Jim Nisbet became a Teledyne vice president and one of

our prime finders for other companies in the metals businesses,
Jim's brother Oliver became head of Allvac, and John rejoined
that operation. He later became Allvac's president and ran that
operation very successfully and profitably. I later appointed John
as group executive of the Southeast Group. As many of us were,
John was an active member of the American Society for Metals
for many years. Dr. Jack Hamaker was another. He was a gradu-
ate of the University of Michigan, and I had brought him in to
work for Vasco at Latrobe. He eventually came to California and

helped me at the corporate office for a while. Finally, I sent him
to run the Rodney Metals operation in New Bedford, Massachu-
setts, which he did for many years very successfully.
* i'r si-
Henry assumed the title of chief executive officer, in addition

to his position as chairman of the board, when I was made presi-
dent in 1966 and started my 27-year career as a senior officer

of the corporation. By this time, as I've indicated, Teledyne was
already well diversified in the fields of geophysics and oceanog-
raphy, and Teledyne Vasco became the centerpiece of the com-
pany's growing material technologies and metals businesses. In
that year approximately 55 percent of Teledyne's business was in
electronics and 22 percent in materials technology.
56
My First Days at Teledyne
After the deal had been completed and the world was informed, I
was very excited and proud when I made the move to Los Ange-
les. I remember clearly, in those very first days with Teledyne,
how impressed I was with this new company, which was still so
very young, and with all the talented young people Henry had
brought together. They were doing what I considered genius level
work producing things that had never been made before, like
their new IHAS system and many, many other things. I wanted
to meet all these talented young people, and Henry agreed, and
said, "You've got to get to know all these fellows, George." My
team from Vasco was equally impressed.
The first people I had become acquainted with were J. Spen-
cer Letts, the head of Henry's legal team, and George Farinsky,
the company's chief financial mogul who had come to Latrobe,
Pennsylvania, to negotiate the terms of the transaction. I recall
Spencer wondering out loud to me one afternoon in the spring

of 1966, as we finished a short round of golf at the Laurel Valley
Country Club, why I would be interested in leaving that climate
and those beautiful green mountains for Los Angeles. I assured

him that I really wanted to do so, but hoped that I could join him
again for a round of golf in western Pennsylvania on another
lovely sunny day in years to come.
July 1 came and a TWA flight took me from PIT to LAX
where I was met by Henry and George Kozmetsky. Just a few
blocks away we met with the assembled Teledyne Board of Direc-
tors, and I was formally elected president. George Kozmetsky
assured me that he had asked Henry many times to find someone
to take his position so that he could achieve his lifelong goal
of returning to the academic life. He had once been a professor
before he had joined Henry at Litton and worked on the business
57
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end of the research team that had helped Tex Thornton build
his giant successful company. As mentioned, he had then helped
Henry found Teledyne with their rewards from the Litton suc-
cess. Now he was happy to be able to return to being a contribut-
ing factor in university life.
In Teledyne's earliest years, Henry had been the company's

president, as well as the chairman of the Board of Directors.
Co-founder George Kozmetsky was executive vice president
and secretary of the corporation. In June of 1966, the year in
which Vasco joined Teledyne, Kozmetsky resigned as executive
vice president and secretary of the corporation. He continued

to be employed as a consultant to the president until June of
1971. However, he soon joined the faculty of the University of
Texas at Austin where he was appointed dean of the College of
Business Administration, a position he held for 16 years with
brilliant success.
However, George retained a lifelong interest in Teledyne as a
major investor and was a member of the Board of Directors for

many years.
Years later, after we had sadly participated in Henry's funeral

services, he and his lovely wife, Ronya, sat with me at the Santa
Monica airport and he emphatically repeated his thanks to me
for taking his place so he could achieve his life goals. The Uni-
versity of Texas Business School at Austin and the free enterprise
atmosphere he created there are testimony to his drive and talent.
Sadly, he too passed away just a few years later.
Henry and his team welcomed me as I moved into an office

in their Panama Street facility near the airport where Teledyne's
corporate offices were then located. my office there (with

I found
a major leak in its roof and a bucket on my desk) and joined a
fine staff including Farinsky, Letts and Berkley Baker, who was
the company's public relations expert. Berkley was a prize at his

job and served us faithfully for 30 years.
58
Our corporate offices at that time were housed with the Tele-
dyne Systems Company, which was working diligently on the
IHAS Integrated Helicopter Avionics System, then Teledyne's
largest military contract. I had been so impressed by their win-
ning this contract that I could hardly wait to participate. We had
a Navy helicopter shell in the next building, which was being
outfitted with our new digital electronic avionics systems.
Not long after, Henry started to build a major new plant for
the Systems Company at Northridge in the San Fernando Val-
ley. Joe Smead and his people moved there with all of their con-
tracts, and Henry and I moved our growing corporate staff to
new offices in Century City, the elegant new development that

Welton Becket and the Alcoa Corporation had just finished. It
was at the edge of the Universal movie studios and the Los Ange-
les and Hillcrest Country Clubs. We took one floor, the 18th, for
our main corporate offices and an option on the 17th and 19th
floors, which we later used for an executive fitness center and
other purposes.
Henry had been very busy preparing for my arrival. I had
to be introduced not only to his team, but also to the financial
community of Los Angeles and the country. He was confident

that Teledyne would continue growing and become a very large
corporation, and that belief was part of his every thought and
goal and action plan. Before my first month had ended, he had
taken me to Houston, Texas, where Fayez Sarofim, one of our
directors, hosted a meeting with financial analysts and Hous-
ton business people to meet Henry and me. Bowman Thomas of
Sewart Seacraft, the ship construction company that had been

acquired, and Dick Baile of the Seismic Exploration Company
were also there.
Fayez Sarofim had been a classmate of our director, Arthur

Rock, who, as I have mentioned, had been instrumental in the
early financing of the company and had brought Henry and
59
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Jay Last together, creating Teledyne's first major semiconductor

operation. Rock was an executive Hayden Stone and Company
at
at that time and had introduced Henry to Fayez, who ran a very
successful business investment service for cUents.
Henry, as I have said, spent hours studying the stock and bond
markets and was anxious to have both the funds and opportunity
to pursue his life interest. I remember well, just after returning
from Houston, receiving a letter from Fayez extolling the ben-

efits he could provide us with, if I, as president, would allow him
to select our investments. Since I didn't yet have any investment
authority, I showed the letter to Henry. He quickly told me that
he wanted to control the investing of his stockholders' money.
He did so, and no one interfered, not even the heads of the insur-
ance companies who later joined us with their copious millions
for investment. It was not until 20 years later that Henry allowed
Fayez to participate directly as a manager of investments for one
of our then-independent insurance companies. But Henry sought
his advice many, many times over those years.
Henry did teach me how to study the markets as he did, though
only rarely did he ask for my initiative in making selections. He
knew, of course, that I was aware of the bank of information
on corporate stocks and bonds he maintained on his computer
system, which he used in evaluating his selections. He frequently
discussed the reasons he had for making investment judgments
with me, so that I would be able to participate and back up his
actions and discuss those actions with our directors and execu-
tive team. He kept his Apple II® and Apple III® computers busy
at his home, building his database, and used those tools inces-
santly in his management methods. He was a very early pioneer
in using personal computers for business, financial and technical

purposes. As most engineers did, he loved the Apple concept and
subsequently joined Arthur Rock on Apple's board. Needless to
say, I used them as well, and didn't resist when they got me the
60
first LISA computer which was the prototype for the Macintosh®,
and then, of course, the latest Mac®.

As Will Singleton, Henry's son,me recently, "From the told
time the Apple II came out

owned many models of
in 1977, he
Apples and Macs, culminating with a PowerPC® in 1999. He
programmed originally in machine code, before Apple came out
with an assembler. He moved on to assembly language, then Pas-
cal, and later C. He wrote a word processor, checkbook pro-
grams, various investment tools, chess and checkers programs,

and spent his last years working on an AI (Artificial Intelligence)
approach to backgammon. One of his favorite computers was

actually an early HP® calculator, for which he wrote many pro-
grams. His favorite was an IRR tool, which he used a lot. He
kept that old HP on his desk always. It still works, I think."
Those early months were a continuing whirlwind of meet-

ings. In October 1966, we hosted bankers to our city to tell them
about Teledyne. The Bank of America, Citibank, Mellon, North
Carolina National Bank, Republic, and the Bank of the South-
west attended.
I also had to get acquainted with our own Teledyne company
executives, and they with me. I remember the first speech I gave
at a managers meeting about three months after I got there. We
had it at a little hotel, the Santa Inez Inn, at the end of Sunset
Boulevard in Los Angeles. Everyone we could think of came to
that meeting, and most of them were meeting me and seeing me
for the first time, just as was meeting them for the first time.
I
One of the things I told them was that we, Henry and I, expected
them to run their own companies, and that we didn't want them
to be asking us a lot of questions that they could better answer
themselves. I made up a little story about a rubber ball and a
swimming pool. I said that the questions they might want to ask
61
Distant Force
were like a rubber ball that would pop right up to the surface.
But if they did some hard thinking about the answer to their
question on their own it would turn into steel and sink to the
bottom where it wouldn't be a problem anymore. That's one of

the things we do at Vasco, I said, because all our balls are made
of steel and they stay on the bottom. That was just a little fun
thing I did and it got a big laugh. "Don't ever let those balls float
up to the top of the pool," I said, "because then you'll have to
find someone to answer those questions, and that might not be
too easy to do."
At this meeting, we also introduced our development of the
reporting system, the compensation system and, most impor-
tant, our preaching of ethics, a subject that Henry was most
emphatic about.
In addition to many other meetings with financial analysts and
banks, in which we introduced them to our many fields of activ-
ity, we had to be concerned with managing our technical future.
In February 1967, I wrote Teck Wilson confirming conversa-

tions we had that he was to form and head an Advisory Panel on
Development and Research Policy, with particular emphasis on
materials for aircraft and semiconductor technology. Two weeks
later we met at the Marina del Rey hotel with some of the techni-
cal heads of our companies. Many had never met each other in
a professional setting before. I spoke that morning to the group,
which included Fred Bailey of Teledyne Materials Research, Bill
Batten of Metal Forming, Ted Franks of Teledyne Titanium, I.C.

Haas of Amelco, Jack Hall and Mike Urdea of Precision Casting,
Dr. Jack Hamaker of Vasco, and Henry Wimmersberger, who
had replaced me as president there. Also present were Dr. Jay
Last of Amelco, Stan Morse of Pro-Seal, Jim and Oliver Nisbet
of Allvac, Ralph Redemske of Systems, and Murphy Thibideaux
of Movible Offshore, among others.
The organization of our group executive system was another
62
early matter that we addressed at our first meeting of group

executives at Rancho Santa Fe, California, in September 1967.
I detailed the role of the group executives, their relationship to
Henry and me, their relationship to the company presidents and
to our corporate financial executives. I also outlined our com-
pensation plan for company presidents and staff, and I showed
charts of the salary and bonus pay for company presidents over
the past few years, which was well received.
Each of these group executives had served us at some time

or other as president or general manager of a company in the
business world. Here we expected them to —
do more to guide
the technical direction of each company in their group, to ensure
that it was carefully managed to our required level of skills in
reporting and control, and to emphasize the necessity for growth

and profits.
When I joined Teledyne, Henry introduced me to Russ Kier-

nan. He said, "George, I want you to meet Russ Kiernan. He's a
unique fellow." I said, "What's unique about him?"
"Well," he said, "what's unique about him is that him
I'll ask
a question about one of these companies that I've asked him to
supervise,and he always knows the exact numerical answer. If I
ask him what they did in sales last month, he knows right away
without calling someone to find out."
"So," he said, "that's the kind of fellow that you pick who
runs a company and does it well, but is also able to quickly under-
stand and supervise, and have the facts about other companies
under his wing. That's the kind of a group leader we need."
63
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Second Phase Acquisitions 1966-70
In the company's first six years of operation from 1961 to

1966, sales had gone from $4,491,000 to $256,751,000; net
income rose from $58,000 to $12,035,000; and shareholder
equity had risen from $2,477,000 to $90,205,000. The com-
pany that had started with 450 employees now had 13,900,
and was 293rd in sales on the Fortune 500 list of the country's
largest industrial firms.
When assumed
I the presidency, in addition to the organiza-
tional meetings described above, I immediately became involved
in the company's ongoing program of acquisitions that lasted
until the end of the decade. This was in addition to my day-to-
day duties in overseeing the already quite complex mix of operat-
ing units. When we would finally agree upon and acquire a new
company, Henry would say to me, "Okay, George, we've got it.
Now go run it!" We called these companies profit centers, of
course, and they were indeed expected to show a profit, or be

changed in some way to do that.
I was involved in the negotiations leading up to these acqui-

sitions, and so one of my first jobs was to visit the new compa-
nies, meet with their managers and technical staff, inspect their
facilities and learn exactly what their business was all about, and
what their needs, if any, were. I also had to explain our corporate
systems and procedures.
We always hoped that the owners or managers of these new
companies would stay on and continue to manage their opera-
tions, and most did. Many of these men had started their compa-
nies 20 or 30 years earlier with family money and had managed
them into the successful and viable businesses that had attracted
our attention, and some were ready to retire. In those cases we
often asked if there was a son or other relative who knew the
64
business and who would take over and manage it. Sometimes one
of the other top executives or technical people accepted the job.
These men knew more about their specific businesses than we
did, and we wanted to keep their expertise. We had no intention of
managing these businesses from the corporate level. We did, how-
ever, establish our own unique financial and operations reporting
system under the direction of George Farinsky, which enabled us
to monitor their performance closely, on a monthly basis, and see
any trouble spots before they became serious. (I'll explain more
about the systems we established later in this story.)
And, of course, we placed the new companies into the appro-

priate groups led by group executives who understood their fields.
By the end of the decade we had 94 named profit centers with

facilities in at least 120 locations, organized in 16 groups.
George Farinsky, incidentally, was one of our top financial

people. He joined Teledyne in 1962. He came to us from Arthur
Andersen where he had worked from 1956 to 1960 as a staff
accountant, and then as a senior staff accountant from 1961 to
1962. At Teledyne he served as controller at Teledyne Systems
Company for a while, and then joined the corporate staff in
1965 as treasurer, and made many important contributions to
our financial reporting and control systems. George later left us
and joined the Mattel Corporation as their chief financial officer,

where he did a fine job for them as well.
We had some very clear standards that we followed in decid-
ing whether or not a company was a good candidate for acquisi-
tion. Jim Nisbet, who spent most of his time in the acquisitions
business, listed the following:
Is the company profitable?
Do they have a good balance sheet?
Is their profit and loss statement accurate?
Do they have a clean inventory?
65
Distant Force
Is their backlog realistic and well documented?

Is their management on top of their operations?
Would management be willing to stay, if acquired?
Have they made long range plans to maximize their profit
in a sellout?
Does the business have growth potential?
Is there opportunity for growth in profit?
Can cash be taken from the company for use elsewhere?
How is depreciation counted and is it a significant per-
centage of profits?
What is the condition of their physical plant?
And finally, and probably most important:

Would this company be a good fit within the Teledyne
organization and its goals?
Henry and Jim tried to follow the above rules and choose
only those companies that would be rated superior on most of
the counts. But my job was to make those companies grow with
the technology we inherited. They were mostly young companies
in the growth mode and mood. Fortunately, as the results show,
most of them did grow; yet in each industry and area growth is
not always uninterruptible. As we shall see, the change in the oil
industry in the '80s, the American steel industry in the '90s and
the American automobile industry in both decades caused us to
take steps eventually to change plans when our operations went
into a slowdown era.
During the 1966 through 1969 period we acquired 90 more

companies, mostly in the US but also in Canada and one in Ger-
many, and, with the amount of traveling I did, I was rarely able
to spend more than a continuous week or two in my office at
66
Century City. Our acquisitions in that period went in several

directions: considerable expansion in the metals and materials
businesses; continued interest in semiconductors, electronics
and systems related companies; greater diversification into some
rather unusual fields; and most significantly, near the end of the
decade, into the insurance and finance field.
In 1966, my company, Vasco Metals Corporation, brought

with it four subsidiaries: Allvac, already mentioned; Mefco, later
renamed Teledyne Metal Forming, an operation that had been
founded in 1950; Pittsburgh Tool Steel Wire; and Vascan, our
Canadian subsidiary. Thus, we were already diversified in our
basic metallurgical businesses.
In a few cases, as we acquired companies at Teledyne, we
put small operations that were very similar in their products and
markets together and renamed them as a single Teledyne com-
pany. But in many other cases, and Vasco is we took what
one,
had been subsidiaries of the parent company, and made them
into independent Teledyne operations. That was done with All-
vac, Vasco's major subsidiary, as well as with the others. AUvac's

titanium production unit was split out as a separate company
from Allvac as well, and became Teledyne Titanium.
Metal Forming specialized in roll-forming a great variety
of metal shapes used in almost every kind of fabricated metal

products you can think of, from aircraft components to office
machine parts.
Pittsburgh Tool Steel Wire manufactured drill rod, precision

ground flat stock and special steel shapes, in oil, water and air
hardening alloys widely used in tool and die applications. They

also made custom shapes used in a great number of products
ranging from surgical instruments and tools, to bearings and
mechanical parts for business machines, and military and com-
mercial vehicles.
Vascan, Vanadium Steel Company Canada, was an unusual
67
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story as to how Vasco and later Teledyne got into Canadian oper-
ations. Originally, Vasco had decided to establish a steel company
in Canada, at the prompting of one of its executives, and it did.
I was just a junior executive at the time, but I became involved

in its operations and knew it pretty well. By 1961, when I had
become head of Vasco, that operation had become a real load on
our company. We were faced with intense international competi-
tion in the high-speed tool steel market in Canada, and we found
it impossible to compete. So I decided we had to get rid of that
mill. Fortunately, we learned that the Mexican government was

interested in acquiring additional steel capacity, and the entire
mill was sold to them. We dismantled it and shipped it all the

way down there, piece by piece, on railroad cars.
We had allowed the public to invest in Vascan, so this left us
with an empty shell of a company in Canada, with stockholders,
and with the money we got from selling the mills. So, with that
money, after we became part of Teledyne, we began to acquire
some other Canadian companies that we found interesting.
Bell Foundry in Winnipeg, for example, was an outstanding

producer of ductile and gray iron castings used in agricultural
equipment, pulp and paper machinery, and mining equipment.

King Metal Products, of Woodstock, Ontario, specialized in
sheet metal stampings for truck cabs and other industrial equip-
ment, as well as racks for electronic and laboratory equipment

and many other uses. A wide variety of Vasco's specialty metals
and alloys produced in the US were also stocked and merchan-
dised from Vascan's warehouses.
Other Vascan products included sintered tungsten carbide
products, produced by powder metallurgy methods, for machine
tool cutters, and rock-drilling applications in the mining indus-
try. There was a big market for mining products up in Canada,
as well as in the US. The company also produced super-strength
forgings for the steering gear and hydrofoils used in Canada's
68
experimental FHE 400 hydrofoil vessel. Capable of reaching a

speed of 60 knots, this ship was once considered the world's fast-
est warship.
Later we added two other Canadian companies to the Vas-

can family: Tank Transport Ltd. and Lou's Transport Company,
both run by Lou Vitesse. They provided specialized transport
of liquid and dry bulk products such as petroleum, chemicals,
flour, cement and similar products — even shampoo. This was
the beginning of a revolution in the transportation industry in
handling of many of these products in bulk form in place of
individual sacks, drums or packages. It eliminated a tremendous
amount of labor in shipping these products. With these mergers
Teledyne Vascan was operating a fleet of over 300 dry bulk and
liquid transporters, with 165 diesel tractors operating out of nine
terminals in Ontario and Quebec.

By 1967, with the acquisition of Vasco and the many other
smaller companies that had been acquired up to that time, Tele-
dyne had reduced its dependence on government contracts from a
level of about 82 percent in 1964, to only 45 percent. This proved
to be a good thing, due to the volatility of government contracts,
and some other difficulties that we got into in later years.
Because of Teledyne's growing wealth, we were then able to con-

tinue acquiring many more companies, including some very large
ones, either through cash purchases or by equity arrangements.

In the company's original field of semiconductors, electronics
and systems. Jay Last continued to help us evaluate suitable com-
panies which would add to Teledyne's technical expertise in that
field, as well as add new products for those markets or expansion
into other markets. Nexus, another semiconductor producer, was
acquired in 1966, and later became part of Teledyne Philbrick
which we acquired in 1967.
69
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George A. Philbrick, who was the president and founder of

George A. Philbrick Researches, was a briUiant scientist who had
done pioneering work in the development of electronic analog
computing devices and is credited with bringing the first com-
mercial operational amplifier to market in 1952, based on work
done by Loebe Julie, a young engineer at Columbia University.
Though semiconductors made modern digital computers practi-

cal, they also made analog devices more practical, as well. While
digital electronics break data into a series of discrete steps or

values, analog devices work with continuously varying values.
A simple example of an analog device is the common mercury

thermometer. As the ambient temperature changes smoothly up
or down, the mercury expands or contracts smoothly up or down
in its capillary tube, and the distance along that tube can be cali-
brated to indicate the temperature.

Analog devices go way back in history, first as mechanical
systems using arrays of gears, cams and levers, later using vac-
uum tubes and finally semiconductor electronic components to
solve complex differential equations. These devices have been
used in many applications ranging from tabulating the US cen-
sus, to flight simulators, naval fire control, and air traffic control
systems. Today, most analog devices are used in combination

with digital devices to form hybrid systems.
Our acquisition of Philbrick further broadened Teledyne's
capabilities in the semiconductor component field, and led to the
development of a number of industry leading products such as

high-speed operational amplifiers, digital to analog converters,
and high-temperature analog devices used in military, geother-
mal and oil well logging equipment. Other semiconductor com-

pany acquisitions in this period included Continental Device,
Monolith and Adcom.
Some of the other companies we acquired, while not semi-
conductor producers, did provide the machinery, equipment and
70
instruments used in this industry. Transistor Automation, a com-

pany that produced state-of-the-art automated equipment for the
efficient production of semiconductor devices, was acquired in

1966 and later merged into Teledyne Semiconductor's operations.
Analytical Instruments, which had been acquired some years

earlier, was another company that, while not a semiconductor
producer, did make equipment that was vital in the semiconduc-
tor manufacturing process and many other industries. Their gas
purity analysis system, designed specifically for that industry,
continuously monitors the controlled atmosphere under which
semiconductors are produced, detecting contaminants that could
result in costly defects. Their other analytical instruments are
also used in virtually every segment of industry for process con-
trol and monitoring flue gas, plant effluent, mine safety and envi-
ronmental pollution control.

Another of these companies was Hastings Raydist, which
was founded in 1944 and run by the husband and wife team of
Charles and Mary Hastings. Charles earned a degree in elec-
trical engineering from Johns Hopkins University in 1935, and
as a young man developed several inventions, including a radio-
location system that he named Raydist. It could determine the
position of a ship or any object, even on the open sea, within an
accuracy of a few feet. It came to be used primarily for shipboard
and airborne position determination, for seismic and hydro-
graphic surveying, ship trials, and for positioning offshore drill-
ing platforms. This tied in well with our growing involvement

in the geophysical and oceanographic fields and the petroleum
industry. Raydist has recently been made obsolete by the advent
of the satellite positioning or GPS technology, but in its time it
was a state-of-the-art system that was unchallenged by any other

system. During the Vietnam War it was used in mine sweeping
operations, and later in clearing mines and sunken wrecks to
reopen the Suez Canal.
71
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This company also made precise vacuum and mass flow mea-
surement instruments that are vital in the production of semicon-
ductors, as well as in many other industrial and scientific process
systems. We liked his product line, which tied into several of our
fields of interest, as well as his financial position and his manage-
ment, so we were eager to acquire his company. In January 1968,
we proposed exchanging one share of Teledyne stock for each
2.98 shares of Hastings-Raydist, Inc., which placed the value of
Hastings at about $10,600,000, and this was accepted by Hast-
ings' shareholders on March 27.
Because of my background and interest in the metals indus-
tries, we continued to acquire a substantial number of new com-

panies in metals and related fields. Jim Nisbet, who was very
knowledgeable in these technologies, and who had become one
of our vice presidents, was our right hand man and very aggres-
sive in seeking out, evaluating and acquiring some very impor-
tant metals companies and related companies in the machine tool
business. He worked intimately in this area with Henry Single-

ton, paralleling the close relationship in acquiring electronic
companies that Henry had with Bill Shannon.

In 1966, we added the Kenco Company, makers of Kenco
power presses with capacities from 3 to 20 tons used in a vari-
ety of metal product manufacturing applications. This company

was later combined with the Taber company, also acquired in
that year, which manufactured quality bonded strain gage trans-
ducers and physical test instrumentation used in aerospace, oil
and natural gas exploration, oceanographic research, and indus-

trial plants where precise measurement of pressure and stress is
required. These products have been used on every major US aero-

space program. The company's instruments for measuring abra-
sion resistance, stiffness and scratch characteristics of materials
72
are widely used in quality control for the automotive, appliance,

and textile industries.
We acquired Cast Products, a diversified producer of premium

quality aluminum and magnesium castings in that same year. It
served the aerospace and defense industries with castings for air-
frames, gas turbines, missiles and other defense equipment. One
unique accomplishment of this company, representative of their
exceptional expertise, was the production of 500 gun mount

castings for the US Navy's Phalanx Close-in Weapon System.
This mount was a one-piece casting weighing 1,250 pounds, and
was believed at that time to be the largest, single-piece thin wall
aluminum sand casting ever made. It may still be.
PICCO, also acquired at that time, expanded our metals

technology into the field of precision investment castings. This
process, also known as the lost wax process, is an outstand-
ing method of manufacturing complex, precise shapes in high-
strength, high-temperature alloys. Some of these casting have
re-entrant angles and internal passages that would be impossible
to produce by machining methods.
This ancient process, known to have been used 2,000 years
ago in Egypt, requires that a precise replica of the desired object
be formed in wax. This wax pre-form is then coated in a series
of layers of refractory material to build up a thick shell. The wax
is melted out and the shell is then fired in a kiln to form a hard
ceramic mold, into which the metal is poured. The shell is then
broken away to reveal an exact metal replica of the wax pattern.
PICCO uses this process to cast parts weighing from as little as
one pound to parts over 40 inches in diameter that require more

than 1,000 pounds of metal. These products are made primarily
for aerospace structural and turbine engine parts in nickel and
cobalt-based superalloys and stainless steel, vital to these modern
industries. Because of the great demand for these products in the
aerospace industry, and in other industrial applications, PICCO
73
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became one of our most profitable operations, sometimes return-

ing 20 percent profit on sales.
The acquisition of the AeroCal Company further expanded
our capabilities in the production of precision metal components.
AeroCal was a roll-forming operation that produced close-tol-
erance formed metal structural shapes for aircraft, the Space

Shuttle and missiles. These products were made to precise speci-
fications by processes such as roll forming, ring rolling, stretch

forming and brake forming. A unique capability of the compa-
ny's roll-forming process allowed the thickness of a single roll-
formed piece to be varied at different locations. Thicker metal
could be left where strength was needed, while thinner sections

could be created elsewhere to save weight, all in one continuous
rolling operation. It was a much more economical process than
chemical milling or machining, often used to achieve the same
goals. Using its ring rolling process, the company produced the
metal cryogenic seals, to tight tolerances, for the main engines of
the Space Shuttle.
But not every acquisition was easy. In fact, one of the most
difficult and convoluted processes that we ever had to go through
was with the Wah Chang Company of Albany, Oregon, and
Huntsville, Alabama. This was one of our most important acqui-
sitions in the primary metals business, one that both Henry and
I thought was very desirable. It was brought in by Jim Nisbett in
1967 but it almost never came to pass.

Wah Chang, at that time, was the world's largest producer of
zirconium and hafnium. Zirconium, because of its high corrosion
resistance and its transparency to neutrons, has important uses in
fuel tubes and assemblies for water-cooled nuclear power reactors.
Hafnium, conversely, because of its ability to absorb neutrons, is
used in the control rods that regulate the nuclear reaction. Our
74
position in these two metals, after the acquisition had been con-
summated, gave us an important position in the nuclear power
industry, which we later broadened with further acquisitions. The
era of nuclear powered submarines and naval ships had begun,
and this was another growing market for these metals.
Zirconium is also used in the chemical process industries,

where its corrosion resistant properties are important, and haf-
nium is used in alloys for jet engines and aircraft. Wah Chang's
Huntsville facility is a leading producer of tungsten, tungsten car-
bide and molybdenum products using powder alloy techniques.
By 1964, the company wasn't doing well financially. Its sales
were under $30 million, and it had defaulted on a $6 million

bank loan. Jim Nisbet and I were very interested in having Vasco
acquire it. We found out in the process of our early meetings,
that Steve Yih, its president, was negotiating with several other
companies, and the bank was also negotiating separately to sell
the company. They had five contenders in mind, and Vasco was
at the bottom of their list.
Then, it became a whole new

game when Teledyne ball
acquired Vasco. We kept in close touch with Wah Chang and

one day in early 1967 Jim was contacted by their management
and told it might still be possible to acquire the company. They
gave him their latest financial data that showed increased sales
and profit, particularly for zirconium. When Henry and I were
given their financial data by Jim, we were immediately interested.
Henry usually insisted on having 100 percent ownership, but we
decided that we probably could acquire the rest later. Within sev-
eral days agreements had been signed, and three months later
we were able to acquire the remaining interest in exchange for

Teledyne shares.
This turned out to be an extremely important acquisition for
Teledyne. The facility in Albany, Oregon, named Teledyne Wah
Chang Albany, produced zirconium and its sister metal hafnium.
75
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We replaced their facility in Glen Cove, New York, by moving

tungsten andmolybdenum production to Huntsville, Alabama.
We named this new operation Teledyne Wah Chang Huntsville,
and staffed it with entirely separate management. It was of inter-
est especially after the acquisition of the tungsten carbide busi-

ness of Firth Sterling Steel with their tungsten carbide cutting
tool production. We also produced our two other exotic metals,
tantalum and columbium, there.
By 1969, annual sales had increased to $41 million in Albany,
and to $10 million in Huntsville. Ten years later, those num-
bers had reached over $140 million and $50 million respectively.
Later, we started titanium production at Albany, and by 1993

annual sales of that metal had reached $17 million.
Unfortunately, not long after the Wah Chang matter had

been settled, a great tragedy occurred in Jim Nisbet's life. His
wife of many years was an accomplished aircraft pilot with years
of experience. She had an instrument rating and was studying

for an airline transport rating. She had just completed her third
cross-country race as a competitor in the Powder Puff Derby.
During a flight from Danbury, Connecticut, in which she was
bringing two friends down to North Carolina for a long weekend
at the Nisbet home, her plane became involved in a severe thun-
derstorm near Lancaster, Pennsylvania, and crashed. All aboard
were killed.
In 1967, our acquisitions program was heating up greatly.
We asked Jim, who was then heading up our materials group,

to give up that position and devote himself full time to finding
suitable new companies to add to the growing Teledyne family
of businesses. He did that and remained with the company until
we ended that program in 1970. He remained available for three

more vears as a consultant.
76
Continued Expansion in the Metals Business
We continued to expand our capabilities in metal fabrication

in 1967 with the acquisition of Portland Forge, a company that
made over 8,000 custom forged steel parts for machinery and
equipment where exceptional strength and durability are neces-
sary. The modern forging process is similar to the work done by
the old-fashioned blacksmith, who shaped heated metal into the
desired form by impact and pressure. It is now done by mod-
ern mechanical presses with various kinds of dies that form the
hot metal into the desired shape. Forging causes the grain struc-
ture of the metal to flow along the contours of the finished part,
resulting in parts with exceptional toughness and strength for
high-stress applications.
Another form of metal fabrication that is used with highly
refractory metals that are difficult to melt is done with powder
alloys. Tungsten, because of its high melting point, is frequently
fabricated with this method. We acquired the Powder Alloys
Company in 1967 to extend our capabilities into this field. Finely
powdered tungsten is compressed between dies, at a high tem-

perature, and the contact points between the individual particles
fuse together in a process called sintering. The solid material pro-
duced can then be machined into finished form if necessary.
A major product of company was Densalloy®, a tung-

this
sten material twice as dense as lead. Parts made of this material

are used wherever weight is needed when space is limited, such
as for counterbalance weights on aircraft ailerons, rudders and
elevators to improve flight controls — and even as tiny weights in
self-winding watches. Because of its density, this material is also
an excellent radiation absorbing material and is used in nuclear
medicine, oil well logging and non-destructive inspection of

materials. As you can see, this was another piece of the puzzle
that tied together many of our other capabilities.
77
Distant borce
Nearly simultaneously we acquired Firth Sterling Company,

which I mentioned earlier. They used powder metallurgy tech-
niques to produce cemented tungsten carbide, an extremely hard

material used in cutting tools. But actually our interest in Firth
Sterling was not so much in their production capabilities in the
cemented carbide business, as in the bar rolling mill they owned.

Jim Nisbet's Allvac operation in North Carolina had only one
big old giant of a rolling mill for processing their ingots, and we
wanted Firth Sterling's bar rolling mill that could roll rods and
bars and shapes from about 3/8 of an inch in diameter up to 4
inches. It could roll rounds, squares, flats and shapes in many
sizes needed in the new aerospace and industrial applications for
vacuum melted alloys. So, after we had acquired Firth Sterling,
we shipped that mill from their plant at McKeesport down to the
Allvac facility. Later, when Allvac got even bigger in the nickel
alloy business for jet engine turbine blades and similar high-
strength, high-temperature parts, they had to get an even better
rolling mill. So, in about 1995, they started a new rolling mill in
South Carolina, just across the border from the Allvac facility
in North Carolina. Much later, in 2004, under the leadership of

Allegheny Technologies, a substantial automated improvement
was made that led the nation in nickel alloy and titanium pro-
cessing facilities.
1968 was our most active year of acquisitions. In that year,
we added 21 companies in metals related businesses alone: Rod-

ney Metals, Howell Penncraft, Pines Engineering, the McKay
Corporation, Landis Machine Tools, Lincoln Park, Irby Steel,
Columbia-Summerill, Oster, H&H Engineering, Readco, Osco

Steel, Mt. Vernon Die Casting, Industrial Die Casting, Monarch
Rubber, Casting Service, Precision Welding and Flexopress, Can-
ada Metal Products, Hilgers in Germany (a subsidiary of Howell
Penncraft), Ohio Steel, and Ohio Cast. The addition of Efficient
Industries in 1969 completed the cycle of our metals and metal
78
fabricating, machine tool, and tool and die acquisitions, and that
pretty much diversified us throughout those industries.
These companies gave us added capabilities in various metals
casting processes from die cast aluminum and magnesium parts, to

large Meehanite and ductile iron castings wêighing 60,000 pounds
or more, and steel mill rolls for the steel mill industry weighing as
much as 90 tons. Our fabricated products ranged from precision
rolled thin metals to cold drawn bars and shapes in various alloys,
to rolled and welded tubular products for the construction of off-
shore oil platforms and structures for the Space Shuttle launch
pad. Some of these structural tubes were made of steel plate, as
much as 9 inches thick, rolled and welded into tubular diameters
of as much as 14 feet and lengths to 300 feet.
With these acquisitions we now also produced machines and
machine tools for the metals and other industries including rotary
bending machines for forming products ranging from automotive
exhaust systems to 10-inch diameter heavy wall tubing for indus-
trial use. We also produced heavy duty, high-speed, high-volume
industrial threading machines for work pieces up to 20 inches in
diameter, and large high-volume mixers for the food, bakery and
chemical industries. Heavy duty welding machines and welding
consumables were added to our product mix, and we supported
many other industrial processes with tooling and dies for metal
forming and plastics production.
We have mentioned the McKay Corporation earlier in describ-

ing the use of "finders." The acquisition of a nationally known
manufacturer of chain and welding wire in York, Pennsylvania,
led to our acquaintanceship with York College officials and fac-
ulty. I had Ed Brown as a

just hired group executive and put him
in charge of McKay. While there he found the Readco company in
York, makers of welding equipment and unique chemical mixing

equipment, with a large plot of land (over 225 thousand square
feet) and a new young president, Frank Zirnkilton, who was tak-
79
Distant borce
ing over from his bosses and owners who wanted to retire. They
became a Teledyne company and grew rapidly.
Later Frank and Ed were instrumental in getting this land
and the office building associated McKay donated to the
with
university, a beautiful tribute to the McKay family of Pittsburgh,
who had been my acquaintances for years. The McKay move was
after they had served us with profits for over 20 years, but were
no longer in a growth mode and were part of the actions taken by

Bill Rutledge and Don Rice in the '90s to concentrate on growth
opportunities.
Many of the metal and rubber units which grew in the '70s
and '80s were facing the changing industrial scene as steelmakers
and automobile makers, our customers, found slowing times and

foreign competition, as we did also in our own consumer product
lines in the '80s.
These units had the characteristics of being closely held fam-

ily units that were still growing when they joined Teledyne and
brought us fine profits for many years. Included were Monarch
Rubber (auto tires, motor mounts and industrial tires) run by Red
Himmelright and his people, Columbia-Summerill (steel tubing
and welded pipe), Ohio Steel (rolling mill rolls), and Ohio Cast
(materials for high-temperature steel and metal working furnaces
and equipment).
With our growing position in machine tools, another related
acquisition was that of W. & L.E. Gurley which made digital
readout systems for machine tools, optical encoders and opto-

graphics. These encoders tell a machine tool operator the pre-
cise position of his cutting tool in a machining operation, and
can even be used to program an operation to run automatically.
In addition to machine tools, these encoders are used in com-
puter peripherals, robots, X-Y plotters, high-speed printers and
many applications in military and space programs. In devel-
oping these encoders, Gurley had developed great expertise
80
in optographics, the technology of producing high-resolution

precision patterns on glass and other substrates, used in many
high-precision applications. Interestingly, this company was

founded way back in 1845 making transits and theodolites, for
surveying and navigation, which were used in the early explora-

tion of this country.
Another company we acquired, which provided materials
and instruments in support of draftsmen and engineers in vir-
tually every technology, was the Frederick Post Company. Post

manufactured media, materials and equipment for the modern
engineering drafting room, and the educational market, too.
Their products include paper, drafting vellums and diazo-sensi-
tized papers for reproduction of engineering drawings, as well as
drafting equipment such as drafting machines, light tables and
instruments for the engineering drafting room. Their catalog
included some 5,000 items.
They were also a major producer of slide rules, the ubiq-
uitous calculating tool that every engineer had on his desk, or
in his pocket or briefcase, which permitted him to do various

mathematical calculations quickly and easily. But these simple
instruments were made completely obsolete, except perhaps as
mementos of an earlier time or museum pieces, by the advent of
the digital computer and pocket electronic calculators. When this

happened. Post was left with a large inventory of these instru-
ments that were, for all practical purposes, totally useless. Post
decided that it would be appropriate to have a memorial service

for this old friend of engineers and arranged to have a large num-
ber (slide rules, not engineers) buried in a field somewhere up in
Wisconsin, I believe. I missed the ceremony, but Fred and Joe

D'Annunzio and few others were there to send them on their way
and wish them well.
The Rotolite Company, manufacturers of diazo printing

machines, widely used for reproducing engineering drawings
81
Distant Force
in drafting rooms, became a part of this operation as well, and

rounded out their product line.
Teledyne Post played another part in my life, in an interest-
ing way. Right after I joined Teledyne, Arthur Rock, who had
helped put the company together in those very first years, and
had become a company director and a major shareholder, sent
me an exercise bicycle. He said, "George, if you're going to stay
around very long, you're going to have to get some regular exer-
cise and keep doing that." He was definitely a fitness enthusiast,
and I don't think he ever had a pound of fat on him. I took his
advice and used that machine at my home whenever I could.
My interest in fitness, and Henry's as well, led to our estab-
lishing an exercise room and fitness center on the 19th floor that
was quite elaborate and well equipped, and it was open for the
use of all our corporate employees.

Arthur Rock's gift also got me thinking about other aspects
of my physical health and so I got a drafting table from Teledyne
Post that could be adjusted up and down to any level, and tilted
if need be. I set that up so it was the right height for working at
it my Apple computer on it, and spent almost
standing up, put
all my time doing my work standing up, rather than sitting in a
chair all day. Anyone who visited me in my office had to stand up

as well and I'm sure they recall that.
So in the short period of a few years, Henry had diversified
his company from a largely aerospace, electronics and systems

company, into the geophysical and oceanographic fields which
led to a strong presence in the petroleum industry, and then into
many other industrial and commercial fields related to metals
and machinery.
82
Brown Engineering
But the story was far from over. While Jim Nisbet and I were
seeking out and evaluating the metals field, our other company
"finders" were leading the company into some unusual fields,
and we made some very large and important mergers.

One of the largest was our acquisition of Brown Engineering,
which we officially acquired on April 19, 1967. I had met with
their officers for the first time in December of 1966. Milt Cum-
mings was chairman and Joe Moquin was president; Ray Watson
was vice president and director of research at that time. William
Giardini was its founder and his company, which just celebrated
its 50th anniversary. It is still part of Teledyne Technologies, Inc.

and was profiled in their 2003 annual report.
I had several meetings with them at first, once at their place
and once at the Movible Offshore facility, and then I had them
come to California to meet Henry. Henry's original idea was
to make them part of the Teledyne Systems Company, but Joe
Moquin and others were very much against that and wanted to
be a separate company. They convinced him that their activities
with the Army, the Space Command and NASA were such that it
would be much better if they remained a separate company and

not tied in operationally with the Teledyne Systems Company.
Henry finally agreed. He was never averse to accepting outside
advice if he could be shown good reasons for doing so.
In addition to their main operation in Huntsville, Alabama,

Brown had a big electronics assembly plant in Lewisburg, Ten-
nessee. It was a very efficient and successful operation, and it
became quite useful to us. We then expanded that into a beau-

tiful, wonderfully automated, low-cost, high-production-rate
assembly operation. It was a Henry Ford type of operation in
the electronic assembly business. One of the early products we
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produced there was one of IBM's first PC computer models. They

also had an operation in New Hampshire, where they manufac-
tured telemetry equipment. VC'e put that into Joe Smead's Group
where it was named Teledyne Telemetry, and became a very suc-
cessful independent company.

In 1964, Brown had $42 million in sales and a profit after tax
of $925,000. Its earnings in that year were $1.24 a share. Today
it is one of the country's largest and best-known systems engi-
neering contractors for NASA and the military services. It was
originally founded in 1953 to provide engineering and manufac-
turing support to Wernher von Braun's team of German scien-
tists who were developing the Redstone rocket for the US Army.
In the ensuing 50 years they have been involved in some of the
most significant milestones in our country's space exploration
and defense efforts, up to and including every Space Shuttle mis-
sion to date and the International Space Station program, as well
as many important military and defense programs.

Brown, for example, provided some 20 million man-hours
of technical support services to NASA's Saturn-Apollo program
of the '60s in a variety- of assignments. They also became the
US Army's Systems Engineering and Technical Assistance Con-
tractor, known as SETAC, in the 1970s (and still are today as
part of Teledyne Technologies, Inc.). In the 1970s and 1980s they

were involved in essentially every ballistic missile defense system
effort, and provided battlefield simulation software for develop-
ment of military strategies and personnel training. It would take
the rest of this book to detail all of the significant programs in
which they've participated.

Joe Moquin, Ray Watson and many others stayed with us
for many years. Joe was a member of the American Institute
of Aeronautics and Astronautics, the Association of the United
States Army and the American Defense Preparedness Associa-
tion, and consequently had many personal associations that were
84
very valuable in Teledyne Brown's marketing efforts. He under-

stood the labyrinth of military and government procurement and
contracting exceptionally well.
In Teledyne Technologies' 2003 Annual Financial Report,
which featured Brown Engineering's 50th anniversary, the presi-
dent's letter points out that Brown's operating profit and operat-
ing margin both reached record levels in that year.
Ryan Aeronautical Company
Another major acquisition that vvê made shortly after Brown

Engineering was the Ryan Aeronautical Company of San Diego,
and with it came a most important and interesting personality.
This highly respected company, founded by T. Claude Ryan, had
an amazing history that w^nt back to the very earliest days of
aviation. As a young boy in the early 1900s, Claude Ryan became
enamored of airplanes and flying and was determined this would
be the focus of his life. He never deviated from that goal. From
his first struggles to learn to fly, through military service, barn-
storming tourist flights over San Diego, running a local air ser-
vice and flying airmail, he eventually built several companies that
became involved in the cutting edge of aircraft design and built
many significant aircraft of the time.
The company he had founded, though ironically he had sold

his interest in it to his partner just months earlier, designed and
built Lindbergh's The Spirit of St. Louis, based on the design of

the Ryan Bluebird and other aircraft that Claude had developed.
Claude never took credit for the Spirit of St. Louis, but Lind-
bergh put it best in a personal note to Claude that he wrote on
the title page of his own book titled The Spirit of St. Louis: "To
Claude Ryan who built the company that built the Spirit of St.
Louis ... Charles Lindbergh."
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Ryan's later activities progressed through virtually every

phase of aviation development. During WWII the company pro-
duced training aircraft and operated flight schools that trained
thousands of Army Air Force pilots. Ryan also developed the US
Navy's first jet fighter named the Ryan Fireball. It combined an
engine-driven propeller in front and a jet engine in the rear. Jets
in those early days could not take off from carriers because of
their slow takeoff acceleration. Prop planes could. Pure propeller

driven planes, however, could not match the Japanese planes of
that day. The combination solved both those problems, and the
plane could operate on either or both power plants. These planes
were the first jets aboard carriers and the first carrier planes with
tricycle landing gear.The planes were just barely too late to par-
ticipate in enemy action, as the war ended with the dropping of
the nuclear bombs. They did remain operational for several years
in carrier-based missions by the US Navy, and later became a
curious milestone in the history of aircraft development when
jet engines finally became fully developed. While they were still
flying, however, many pilots of conventional planes that encoun-

tered them in the air with their propeller engines stopped thought
they had lost their senses.
Claude's company made many other innovations, from verti-
cal takeoff and landing planes to remotely piloted aircraft, as
well as electronic navigation systems and contributions to the US
space programs. The company had its Aerospace Systems Group
and its Electronics and Space Systems Group in San Diego, and
an aircraft plant at its Kearney Mesa facility.
Bill Wagner, who was for many years the primary spokesman
and public relations executive of the company, wrote a detailed
story of the life of T. Claude Ryan, and the amazing development
and growth of his company, in a book titled Ryan the Aviator.
Anyone interested in the history of aircraft development should
read that book and visit the San Diego Aerospace Museum. Bill
86
was also instrumental in getting a building dedicated to Claude

Ryan at the Oshkosh Aeronautical Museum in Oshkosh, Wis-
consin, where hundreds of old planes are on exhibit and where
many old timers and aerospace aficionados meet annually.
By 1968, Ryan Aeronautical had 14,830 employees, approxi-
mately 6.5 million square feet of facilities, and its annual busi-
ness volume had grown to $430 million. It had also become
a prime target for acquisition, and a number of companies
were circling around and showing interest. Teledyne became
the winner of that competition. Our $128 million offer to buy
all 2,570,898 Ryan shares at $50 per share, which was about
$10 per share higher than the stock's current market value, was
accepted. Claude and Bob Jackson, who was then the company
president, along with other directors and the Emptor Group, a
holding company that held 20 percent of the company's stock,
tendered their stock.
Bob Jackson had been one of the main investors in the Emp-
tor Group, which first appeared at Ryan's annual meeting in
1955. He had been a student at the Harvard Graduate School

and became a director on Ryan's board in 1957. Two years later
he became executive vice president and moved up to the presi-
dency in 1961. Bob had a fine record as a banker, certified public
accountant, and was a World War II Army finance officer. In

1969, Bob was named by President Nixon to be a member of the
Blue Ribbon Defense Panel that conducted a year-long study of
the organization and management of the Pentagon. Bob and I
became very friendly and he introduced me to many of the sig-

nificant people in the aerospace business that I probably wouldn't
have known otherwise.
When Ryan Aeronautical Company had become a wholly
owned Bob became chairman of the
subsidiary of Teledyne,
board at Ryan and was appointed a director on Teledyne's
board. He wasn't an operating executive at Ryan after that, but
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he made many contributions to the success of our company in
the ensuing years.

Claude continued as a director but was no longer involved
in the operation of his company. He never lost his interest in
aviation, however, and with one of his sons and a few engineers,
who had worked with him in the past, he worked separately on
some of his favorite ideas for new aircraft. Harking back to his
original joy and enthusiasm for flying, he wanted to reduce the
complexity of modern aircraft and put enjoyment back into per-

sonal flying. He passed away on September H, 1982, and left an
indelible mark on the history of aviation. He has undoubtedly
already taught the angels how to do barrel rolls and other fancy
flying maneuvers.
In 1973, we hired Barry J. Shillito to become president of
Teledyne Ryan Aeronautical. His extensive business, military
and government experience made him an ideal choice for the job.
He had held top executive positions with Hughes, Houston-Fear-

less and the Logistics Management Institute, and served briefly
as Assistant Secretary of the Navy for Installations and Logistics.
Later he became Assistant Secretary of Defense for Installations

and Logistics during the Nixon administration. He also received
the Department of Defense Exceptional Civilian Public Service
Award, the highest civilian award made by the DOD.
Continental Motors
The acquisition of Ryan Aeronautical brought another very

important corporation into the Teledyne fold. Ryan's efforts at
diversification by bringing in subsidiaries had been less than suc-
cessful, and the company turned, in 1961, to acquiring equity in
established companies that had a strong financial position but

needed more aggressive management. The company's annual
88
report for 1961 noted that investment was being made "in a mar-
ketable security." Over a period of months Ryan bought stock in
Continental Motors Corporation of Detroit. By October 1965,

Ryan was the majority owner of Continental with just over 50
percent of its stock. At the time we acquired Ryan, that figure
had grown to just over 60 percent, and by the end of November
nearly all Ryan shares had been tendered or purchased, and the
process of bringing in the rest of Continental's shares, and those
of its subsidiaries, had begun.
Like Ryan, Continental Motors' history goes back to the
earliest days of the 20th century, when it was founded to build
engines (then called motors) for the emerging automobile busi-
ness. They built their first engine in 1902 and made many of the
early advances in engine design throughout the following years.
They were highly successful in the automotive engine business.

By 1927 the company had seen the important growth market
for engines in the aircraft industry and announced their first nine-
cylinder radial engine for aircraft, beginning their long history in

piston aircraft engines. Today, approximately half of all piston-
powered general aviation aircraft are powered by Continental
engines. Their truck and tank engines and large, high-power liq-
uid-cooled engines for military aircraft played an important part

in World War II.
Through the years. Continental had also acquired a number

of other engine companies. Wisconsin Motors, founded early in
the century as well, built a variety of large automotive and indus-
trial engines and was acquired by Continental in 1943. Later,
they developed a very popular line of smaller air-cooled engines
in the 2- to 3 -horsepower range that are widely used in prod-
ucts such as lawn and garden equipment, and larger ones up to

about 30 horsepower used in the building trades and industrial
applications. They also developed diesel engines in the 25- to 62-
horsepower range, which became big sellers in the agricultural
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market. The Gray Marine Motor Company, makers of marine

engines, was also acquired by Continental in 1944.
By 1951, the company had entered the growing field of small
to medium-size turbine engines, with its Continental Aviation and
Engineering Division. They ultimately produced large quantities
of jet turbine engines for the newly developing field of remotely
piloted and unmanned air vehicles used as aerial targets for pilot
training, and later as surveillance vehicles. They also made jet
engines for Air Force trainer aircraft.

When Ryan had gained control of Continental, Bill Ruther-
ford, one of Ryan's executives, was sent to Continental's head-
quarters by Ryan to become their president and chief operating
officer, where he played an important part in modernizing and
streamlining their somewhat antiquated operations. When
Teledyne had taken over the company, Bill Rutherford said, "I
assumed Henry had someone in mind to take over management

of Continental, so I told him I would do everything possible to
help the new guy and there would be absolutely no hard feelings
on my part."
Henry's response was: "We don't have anyone to send back;

you just stay right there. You'll hear from George Roberts." Dur-
ing that period Henry told me of his high respect for Bill Ruther-
ford. Henry had done business with Bill at Litton on some joint
projects in the 1950s and had nothing but good remarks about
him, encouraging my use of his talents in our growth plans. Bill
later became a most important part of our management.

Well, Bill soon did hear from me. With these new large acqui-
sitions we needed to see exactly what we had bought, so I first
visited and toured the Ryan facilities with a small group of other
Teledyne people to inform ourselves about their physical plant
and products and to meet their management. Shortly afterward,
I called Bill Rutherford and asked if he could arrange a similar
tour for us at the Continental operations. This gave me a chance
90
to size up their management, as well as Rutherford's capabilities.
I was pleased and told Rutherford, "Things seem to be going

okay, Bill, but I think you could probably be doing much more."
I was right. By June we had named Rutherford a vice presi-
dent of Teledyne. We decided to break out Continental Aviation

and Electronics, later known as Teledyne CAE, and Wisconsin
Motors and Continental Motors as separate operating divisions,
and placed them with Ryan into the Ryan-Continental Motors

Group. This was based in San Diego with Bill Rutherford as
group executive, and Bob Jackson as group chairman. Later, we
put seven other Teledyne companies into this Group and renamed
it the Pacific Group. It was a highly successful arrangement.
But we still didn't have all the Continental stock. With Con-
tinental shares priced at $18 on the New York Stock Exchange,
in June 1969 we offered one $30 principle amount 7 percent
subordinated debenture, due in 1999, for each share of Con-
tinental's common stock. These debentures paid $2.10 annu-
ally, yielding better than 12 percent to those tendering their
stock — an attractive deal.
In December of 1969, with Teledyne controlling more than
80 percent of its stock, Continental stockholders approved the
company's merger into Teledyne. During the first month of Tele-
dyne's ownership I member of Continental's board of

became a
directors, and Ryan-Continental's Bob Jackson joined Henry and

me and three others on the six-man Teledyne board.
Continental Motors then became Teledyne Continental with
Lynn Richardson as its president. He later became group execu-
tive of our Midwest Group, and held that position until 1979.
Both CAE and Wisconsin Motors were separated out as indepen-
dent Teledyne companies. The new Teledyne CAE was headed by
Jim Murray. Jim had worked for Douglas Aircraft and the Air-
craft Division of Rockwell Standard Corporation, and had been
with Teledyne since 1966. He was an important and productive
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executive of our company for many years, and had extensive con-
tacts in the Air Force, Navy and Defense agencies of our country.
Sadly to say, as I'm writing this, I learned that Jim passed away
in June of 2004.
Art Erlinger, who had been with Continental's Wisconsin
Motors division for many years, was made president of Tele-
dyne Wisconsin and contributed considerably to the growth of

that company and the development of new products that greatly
expanded Wisconsin's markets.
Our contention was that smaller units gave management bet-
ter control and made the local manager fully responsible for the
success of their own operations and motivated them to perform

well. Bill Rutherford's first reaction was, "Oh, boy. I never heard
anything like that. We were exactly the opposite at Ryan and
Continental." Some time later, after dealing with the growing
complexity of managing Continental's diverse product and mar-
ket mix, he came to me and finally admitted it was time to break
the company into separate units. Thus we formed the TCM Gen-
eral Products Division, the TCM Industrial Products Group and
the TCM Aircraft Products Division.
Our policy of keeping our operating units small, each respon-
sible for its own success, is something we followed throughout
the corporation.
As the acquisition process went on we moved into more and

more diverse fields, one of which was the dental products busi-
ness. The first of these companies was brought in 1966. It was

the William Getz Dental Products Company of Chicago, run by
Bill Getz, who was their president. Their field was the manufac-
ture and marketing of a wide range of consumable materials used
in the field of restorative dentistry, such as impression materi-
als, composite resins for restoring teeth and a variety of dental
92
cements. Getz already had two subsidiaries, Densco of Denver,

Colorado, and Hanau of Buffalo, New York, companies that also
made a variety of dental materials and equipment used by den-
tists and in dental laboratories.
Bill was quite interested in the dental business and, with his
recommendation, we acquired the Dental Precision Company
and the Blue White Diamond Company. Blue White Diamond
manufactured drills and burs, coated with diamond crystals,
that could operate at speeds of up to 500,000 rpm in air-driven
turbine handpieces and remove tooth material quickly and pain-

lessly in dental reconstruction. They were recognized as one of
the finest products in their field.
Emesco Dental Company, makers of dental engines, hand-

pieces and equipment used in the dental lab for making dental res-
torations, and Opotow Dental Manufacturing Company, makers

of dental cements, were acquired shortly afterwards, rounding
out our cadre of professional dental product manufacturers.
Consumer Products
At about that same time we began acquiring companies in the
consumer products field. The first of these was the Laars Corpo-
ration in North Hollywood, California. Its leader, Avy Miller,
had designed a unique natural gas fired water heater for use in
swimming pools. It was unique in that it impinged the natural
gas flame directly on a copper surface with water moving rapidly
on the opposite side. This prevented the copper from overheat-
ing, and provided hot water almost instantly, without the neces-
sity of heating a large volume of water in a tank. Later in its
history, this company was solidly involved in domestic pool and

spa installations, and later in residential hydronic space heaters.
The company also made large boilers for commercial space heat-
93
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ing and hot water supply for restaurants, apartments and hotels,
and was very successful in its markets.

In April of 1967, Henry and I had become quite interested in
a new company in Fort Collins, Colorado, called AquaTec. These

people had developed a very successful product that you will prob-
ably recognize, called the Water Pik®. It introduced the original
idea of using a pulsed jet of water as an oral hygiene adjunct to the
toothbrush. It was very efficient at removing food particles from
between the teeth that a toothbrush often could not remove.
It was called to our attention and highly recommended by

a broker in New York, who knew Henry, and there was quite a
bit of competition for the acquisition at that time. We prevailed,
however, and acquired it for 120,000 shares of Teledyne com-
mon stock and up to 35,000 additional shares dependent upon
certain contingencies. The acquisition had a market value of over
$23 million.
Their sales in 1965 had been $3.1 million with a profit after
tax of $416,000, and had grown in 1966 to $8.1 million with
$1,306 million profit. Gene Rouse, who ran a small photography
business in Colorado, was involved in testing the very first units
Gene then started the company and

to cure his dental problems.
hired Al Kuske in 1972 tomanage it, while Gene retained the

marketing management position. When we acquired it, I asked
Al who was going to run it for us, and he said, "No one but
Gene, please." And no one else did. Their sales grew to a peak of
over $144 million in 1977, averaging between $70 and $90 mil-
lion in the decade of the '80s and again reached over $100 mil-
lion in 1990.
They later added a series of other products such as the Shower

Massage®, the Instapure® Water Filter that could be easily attached
to the kitchen faucet, and even a system designed to help people
withdraw from the smoking habit. Some of these products were
not successful, and were later withdrawn from the market. The
94
original Water Pik Oral Hygiene device and the Shower Massage,
however, were highly successful and still are, even today.
Long after these two companies, Laars and Water Pik, played
their part in the success of Teledyne, they are still partners in a

company formed by Allegheny Teledyne in 1999, as Water Pik
Technologies (NYSE symbol PIK.) In April 2006, the Carlyle
Group and Zodiac S.A. acquired Water Pik Technologies for
$27.25 per share.
Another company we acquired, whose name will be recog-
nized by anyone interested in high fidelity music reproduction,

is Acoustic Research, based in Brookline, Massachusetts. Henry
and I were very impressed by the fact that their company was
the subject of a renowned study by the Harvard Business School.
This study cited the company for its exceptional product develop-
ment system and for its outstanding management techniques.
Acoustic Research was the developer and manufacturer of
the world's first acoustic suspension speakers, a revolutionary
advance in high fidelity speaker design. It had originally been
founded as a research facility for developing acoustic products,
and was one of the few companies in the speaker industry whose
research activities were completely separate from any product
development responsibilities. Not constrained by day-to-day
product introduction deadlines, they were able to make a series
of important technological advances in the reproduction of sound
that led to a long line of highly successful, market-leading prod-
ucts. In 1979, for example, their AR-9 speaker system won the
prestigious Hi-Fi Grand Prix Award.
In addition to its speaker systems, which were widely
acclaimed in major audiophile publications, it later produced
high fidelity amplifiers and tuners. It had been a closely held cor-
poration with only 20 or 30 shareholders, one of whom held
51 percent of the stock. We acquired it in June 1967.
Olson Electronics was our first and only entry into owner-
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ship of a chain of retail stores. Olson operated 67 stores across
the country selling music systems and a variety of other elec-

tronic items for the home, automobile and electronic hobbyist. It
was the same type of operation as Radio Shack, and they were
our competitors, though they weren't as big then as they are now.
We purchased it for 110,000 shares of our common stock plus
$6,000,000 more common stock if total profit before tax for
three years equaled S8, 335,000.

Eventually, I had Joe Smead running it. He was very inter-
ested in that kind of an operation because of his work in our
electronics companies. He also became involved with our Pack-
ard Bell television operation, which I mention below. By 1972 we
had a nationwide total of 73 Olson retail locations.
Joe finally left us and later became the head of a major elec-
tronics corporation. He retired just a few years ago with great

honors as the long-time head of that operation. He had been
well schooled in running a large company by his association
with Henry.
Another consumer product brand name that was once well
known, particularly on the West Coast, is Packard Bell. This
company was founded in 1926 as a manufacturer of radio sets,
and developed, along with its industry, into the production of
the latest all-solid-state color television sets of its era, with four-
channel sound and other advanced features. It was especially
noted for its fine wood cabinetry that was handmade in our own
factory near Riverside, California.
Wendell Sell was the president and Robert Bell was a vice
president. Bob, long known to Henry as a fixture in the Los

Angeles group of French wine lovers, the Commanderie de Bor-
deaux, came to our offices to assist me in administrative
later
duties, and became vice president and chairman of our Tele-

dyne Charitable Trust Foundation. Bob's uncle had invented
an important feature of audio radio circuitry at the start of
^6
the radio revolution in the 1920s, and the company was based
on that feature. We acquired Packard Bell tor $16,500,000 in
common stock and the assumption ot a $5,000,000 note. It
was a profitable addition to our company for many years, but

eventually competition from Japanese television manufacturers,
even though we had opened a lower cost production facilit)- in
Mexico, became too severe. Henry was never shy about cutting
his losses, however, and we simply got out of that business and
closed the television operation.
However, the company also had a separate electronics pro-
duction facility that was developing and producing various digital
electronic products, and we kept They had become involved
that.
in a contract with the US Navy that was ver\' unsuccessful for the
company, and we eventually got out of that. This facility, in the
San Fernando Valley, was later made into part of the Teled>Tie
Systems Company and became a very successful and productive
part of our electronics business.
One of our other companies also produced some consumer
products, though many of its other products were for industrial
use. That was MECCA, a volume producer of plastic injection
molded products. Major items were thin walled plastic items
such as drinking glasses, coffee cups and mugs. They made 60

to 70 million 9-ounce drinking glasses annually for in-flight use
by commercial airlines and plastic mugs that could be decorated
in up to five colors with company logos or other designs. Their
Color-Me-Products such as cups, pencil holders, Christmas
ornaments and other items were sold nationwide by direct mail
in cooperation with the US Public School System. These products
made it possible for school children to produce their own color
designs on paper, which were then sent to MECCA where they
were sealed between the transparent double walls of the cup, pro-
viding the young artist with a truly p>ersonalized and permanent
example of his or her artwork.
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MECCA actually also made a great many of our industrial

elastomer cable products for the seismic exploration and oil well
loggmg industry'.
Several companies we acquired were later combined to

beccNiie known as Teledyne Packaging. A. H. Wirz, acquired in
1967, wâs founded in 1836 by August Herman Wirz to manu-

facture surgical instruments and hand-cast closures for bottles.
It certainly was the oldest company that we had acquired, since
many were just starting up in the 1960s. It became the lead
ccMnpany in our packaging group, specializing in blow-molded
plasdc bottles for cosmetics, pharmaceuticals and other prod-
ucts.They also made wiiat were known as "collapsible tubes,"
in metal and plastic —
^the well-known packages for toothpaste
and many similar products. Teledyne Packaging was eventually

expanded with plants in Puerto Rico, and we also bought a large
ccMiipany on the west coast of Mexico that became a part of
this <^>eration. Penn Valley Polymers, another plastics product
producer, and Preston Products were acquired and folded into
the operation.
Two important gentlemen came to us with the acquisition of
Wirz. Townsend Cox had been with Wirz since 1943 and was
tbe principle officer and representative of the ownership of the
ccHiipany.Bob Mahan had been with the company since 1940
and, along with Townsend, was an expert in the packaging busi-
ness. Bob became president of Wirz and stayed with us for many
productive years.
Townsend, who had also run the Wirz operation and was
a very fine manager, later became the group executive of our
AtlanticGroup in 1968, and also our Canada Group. He and his
family had owned all the stock in that company and they would
come to our stockholders meetings and were always highly com-
98
plimentary of Henry's running of the company. Townsend con-

tributed greatly to the growth and expansion of Wirz and Turner
Tube and, with the able assistance of Bob, profitably expanded
the company's Kentucky and Puerto Rico plants. To the best of
my knowledge. Bob Mahan is now retired and living in Florida,
but I'm sorry to say that Townsend died at the Riddle Hospital in
Media, Pennsylvania, in June of 1997.

We acquired a few other maverick companies, as well, that
didn't seem to fit into a high tech company such as Teledyne.
One was the American Safety Table Company, manufacturers
of industrial quality sewing machine equipment used through-
out the world. Their products included heavy-duty fully enclosed
clutch motors, needle positioners and sewing machine tables.
They also produced a machine, called the Autopress, that enabled

an operator to turn and press up to 300 shirt collars a day. This
seemingly unlikely addition to Teledyne was a very profitable
operation. Many of the clothing items you buy today, especially
those made overseas, are very probably still produced on this
company's equipment. We later renamed it Teledyne Amco.
Ending Our Program of Acquisitions
By 1969, Henry and I decided the prices for other companies we

might be interested in were getting too high. This was partly due
to increasing competition for these companies by conglomerates
such as TRW and others w^ho were growing the way we were.
Also, after more than a decade of acquisitions by conglomerates,
including ourselves, many of the better companies had already
been acquired from those available, and there were fewer compa-
nies that were really attractive to us.
Those companies we might want to acquire were also aware

of the acquisition process that was going on and began asking
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more than we thought was reasonable. Contributing to our deci-

sionwas the fact that a business recession was occurring at that
time, growth in earnings per share was decHning and the stock
market was depressed. And, since we had already acquired some

150 companies, Henry and I decided it was time to organize and
consolidate what we already had.
So we stopped our acquisition of manufacturing companies
entirely, and because of this we no longer had need for those
people, the finders, whose main activity had been finding and
negotiating the buyout of suitable new companies. Jim Nisbet,
Bill Shannon and others left the company at that time.
Diversification into Insurance and Finance

Henry Singleton's Second Great Purpose
Henry talked to me on several occasions about a book by the

former chairman of General Motors Corporation, He told me
he had learned a very important concept from that book, which
he wished to use in the growth of Teledyne. He explained that
in about 1921 or 1922, after World War I and during a very dif-
ficult economic time of recession. General Motors had needed

additional funds to finance their growth and had a plan to sell
bonds to the general public. The bond sale was a complete fail-
ure, and the chairman had written in his book that it had taught
him an important lesson. It was that for a corporation to grow
and to have a strong financial base, it needed to have, as a part of
itself, an interest in substantial financially oriented institutions.
So General Motors had started the General Motors Acceptance

Corporation and invested in other financial groups.
As a result of his interest in this idea, Henry had decided
that at some point, when Teledyne had reached a certain size, he
100
would seek out we could acquire. So, near
financial organizations
the very end of our acquisition period, we did go in that direction

before we finally stopped. We began acquiring a number of finan-
cial and insurance companies, which was a significant change
from our usual aerospace, metals, industrial and consumer com-
pany The first of these financial institutions was an
acquisitions.
insurance company in the life insurance business in Chicago. It

was the United Insurance Corporation, which worked under a
holding company called the Unicoa Corporation.
In the Shareholders' Letter in our 1968 annual report, Henry
made the following statement:
During 1968, a step of relatively minor immediate

significance, but of major importance for our future
long-term growth, was Teledyne's acquisition of 52
percent of the stock of Unicoa Corporation. Unicoa,
through its wholly-owned subsidiary. United Insur-
ance Company of America, will assist in providing the
greatly enlarged financial base that will be essential in
a few years in the future for maintenance at that time
of our established pattern of growth.
In the years 1968 and 1969, we turned to the Northern Cali-

fornia area and acquired a personal savings and loan company
organized under the California Thrift and Loan Statute, called
Fireside Thrift, and another insurance company in Menlo Park,
specializing in workers' compensation insurance, called Argo-
naut Insurance. After the majority stock of the Chicago insurance
company had been acquired through we went to
several tenders,
Texas and bought Trinity Universal Insurance Company of Dal-

las, which was in the property and casualty insurance business.
So then we had life insurance and casualty insurance operations
of substantial size, and a thrift and loan company. Subsequently,
we acquired several companies in the automobile insurance busi-
101
Distant Horce
ness and the auto refinancing business, which were mostly small
operations with offices in southern California.
In the January 1968 issue of Forbes magazine, Henry was
asked the question "Why the insurance business?" His answer
was that the health of an organization has to be strengthened
by growth of its capital resources. "We wouldn't borrow money
from them," he said, "but if you own the resources, that's what
counts. We now have a net worth of $150 million. If we had
$600 million we'd be quite a different company, and we need to
be if we're going to grow."

When questioned again in an interview with Forbes magazine
(January 15, 1969) as to his reasons for making these acquisi-
tions, his answer was: "Stability. Insurance appeals to us because
of the stable, growing base it gives us to continue our growth."
When questioned about the conservative nature of those acqui-

sitions his answer was: "None of our [insurance] companies is
large enough to hurt us, and since their assets don't include big
portfolios of inflated common stocks, their downside risk is min-

imal." He continued: "Insurance is a business of numbers, all
carefully calculated by actuaries. There is a calculable result that
you can pretty nearly forecast. They can be counted on to go up,
maybe not so fast, but up nonetheless.

"If a company is going to keep on growing at the rate we want
to grow, it has to do some new things along the way. What we're
doing now is providing the more stable base that will enable us to
produce that growth four or five years from now."
Normally, when we acquired a new company, Henry asked me

to go out and get familiar with the new people and see what was
needed to run it. But one thing he did not allow me to do, at first,
was to run the investment portfolios of the insurance companies.
In the following year, we added the Great Central Insurance
102
Company, which was a commercial, multi-peril insurer for small

retail businesses and also offered mid-market workers' compen-
sation insurance. We put that in with Argonaut.
Trmity Universal proved to be an outstanding acquisition
in the property and casualty insurance business. It was exceed-
ingly well managed, had a loyal and dedicated relationship with
its dealers and brokers, and was well liked and respected in the
southwestern US culture and business world. We learned so much

from their performance that it became a lesson easily applied to
other additions we made in this field later. Added to the United

Insurance Company in Chicago, and its subsidiaries, we were
pleased years later in 1990 to provide its assets, and the busi-
nesses in which it and United had invested under Henry's direc-
tion, to our shareholders as the Unitrin Corporation.
We made our final two financial acquisitions in 1969. One
was Guaranty Reinsurance, a reinsurer of other insurance com-
panies who had to hedge their risk in certain types of policies.
As I will explain a little later, it was somewhat ironic that we put

that company into the Argonaut operation. Financial Indemnity,
a Los Angeles property casualty company, mostly in auto insur-
ance, was our final acquisition. It later became part of our newly
formed Unitrin Company.
Investing In Rather Than Acquiring
So, by 1970, as we began our second decade, we had stopped

our direct acquisition of companies. We decided there was no
point in paying inflated prices for complete ownership of com-
panies when we could buy a substantial interest in them through
our insurance companies when the market prices were favorable.
Of course, we wanted profitable companies that were well man-
aged in businesses that we thought had a good future. Each of
103
Distant Force
our insurance companies had the usual investment committees

to manage how their portfohos were invested, but in keeping
with our system of running financial matters from the corporate
office, Henry headed an investment panel that made all the final
decisions on these matters.

In the February 20, 1978, issue of Forbes magazine, Henry
was quoted about his philosophy in regard to this:
There are tremendous values in the stock market,

but in buying stocks, not entire companies. Buying
companies tends to raise the purchase price too high.
Don't be misled by the few shares trading at a low mul-
tiple of 6 or 7. If you try to acquire those companies the
multiple is more like 12 or 14. And their management
will say, 'If you don't pay it, someone else will.' And
they are right. Someone else does. So it's no acquisi-
tions for us while they are overpriced. I won't pay 15

times earnings. That would mean I'd only be making
a return of 6 or 7 percent. I can do that in T-bills. We
don't have to make any major acquisitions. We have
other things we are busy doing.
As for the stocks we picked to invest in, the purpose

is to make as good a return as we can. We don't have
any other intentions. We do not view them as future
acquisitions. Buying and selling companies is not our

bag. Those who don't believe me are free to do so, but
they will be as wrong in the future as they have been

about other things concerning Teledyne in the past.
So, once we had the financial resources of these insurance

companies, we would look at other companies, see what their
histories had been over the previous 10 years, and, if we thought
they were going to have continued growth and success, we would

invest a portion of our insurance company assets in their stock.
104
In the early '70s, after we had moved our headquarters to
Century City, Henry and I consistently had luncheon together

at the Los Angeles Country Club dining room when I was in
town and not traveling to see our many companies, which I did
often. The Club was visible from his office on the northeast cor-
ner of the 18th floor of our building at 1901 Avenue of the Stars
(meaning Hollywood Stars and not us). Our conversations were
often about electrical engineering or metallurgy, each of us try-
ing to get the hang of another language. He became a good met-
allurgist, and I consistently flunked electrical engineering, but
we remained good friends and during the luncheons we often
talked about investing opportunities. By "often" I mean practi-
cally every day we were together.

As 1974 progressed, he would constantly revert back to a
discussion of his old company, Litton Industries. He was so taken

with their ability to grow and capitalize on their latest techno-
logical opportunities that he was convinced they would make a
great investment for Unicoa. We watched news of the company

closely and during one luncheon decided to start our purchases.
By 1979 we had bought up to 25 percent of Litton stock. Because

of his earlier association with Litton, there was considerable
speculation in the investment community and press as to whether
Henry would attempt to acquire control of Litton. He once again
reiterated his position to the press that he was running a flexible
investment program that could quickly adjust to changes in the

economy by changing his stock position at any time, and that he
had no designs on Litton.
Henry and I used our small Apple computers to follow the

historical charts of company profits over a period of years. By
charting the growth of companies in the late '60s and '70s, we
selected, in addition to Litton, a number of others for our pur-
chases. They often had growth charts resembling lines straight
upward by year. We had an interest in Curtiss-Wright, Litton,
105
Distant Force
TRW and GE, and later Kidde and Jorgenson Steel, among oth-
ers. In each case, Henry made contact with their people to assure
them of our desire to join them as a teammate and not to acquire
control in any way. I often became acquainted with those con-

tacts, and had met many of their people, but it was Henry's word
on which they depended.
By the end of 1978, we owned 31 percent of Curtiss-Wright,
25 percent of Litton, 29 percent of Brockway Glass, 21 percent
of Reichhold Chemicals and 19 percent of Walter Kidde, as well
as interests in a number of other companies.
The SEC investigated these investments, and in October of
1977 a complaint was filed that Teledyne had not clearly stated
that it was the beneficial owner of these insurance portfolios, and
we were required to amend our filings. We were also required to
use the equity method of accounting for these investments, which
meant that we had to include a proportionate amount of each
company's earnings, based on our holdings, as part of Teledyne's
earnings. Henry maintained strongly that this was incorrect,
since we were passive investors in each company.

In the meantime, I had been spending a great deal of time at
Trinity Universal in Dallas and at Unicoa in Chicago, working

on operational problems and expanding their businesses. At that
time, I convinced Henry to allow me to give Jerry Jerome full
authority to run Unicoa in Chicago, and he did a superb job of

that. Jerry then made an important decision in hiring Richard
Vie to run the entire United Insurance operation and all their
subsidiaries. Dick had 21 years' experience in the insurance field.
For the previous four years he had served as the president of

Commonwealth Life and Accident Insurance Company, a sub-
sidiary of American National Insurance Company in Galveston,

Texas. We then expanded his jurisdiction to include the Trin-
ity Universal Insurance Company of Dallas, and those two were
merged and spun off to our shareholders in 1990 under the name
106
I created, Unitrin, Incorporated. As of this writing, Dick is run-

ning that corporation. Jerry resigned as a director of Argonaut
just recently, but remains on the Unitrin board.
By the end of 1969, our 10th year in business, sales had passed
the billion-dollar mark for the first time at $1.3 billion, and our
net income had reached an all-time high of $60.1 million. Share-
holder equity over those years had grown at a compound annual
rate of 94 percent, and our total assets had increased at an annual
rate of 100 percent, while earnings per share had compounded
at 72 percent per year. In this year, our total consolidated assets
were approaching a billion dollars, not including the insurance
and finance company assets of an additional $600 million, which

were under our management. At that time our Electronics and
Control operations accounted for about 40 percent of our sales,
with aviation and industrial products and services contributing 30

percent, and materials technology adding the final 30 percent.
In his letter to shareholders for the year 1970, Henry
pointed out:
The strong financial condition of Teledyne is evi-
dent in our balance sheet. We have an excellent cash

position, a ratio of current assets to current liabilities
of nearly three to one, and a low funded indebtedness
of about 25 percent of total capital. Teledyne United's
increase is accounted for by the results of Argonaut
Insurance Company.
As the acquisition program wound down, it was time that
we further consolidated and refined our operating systems. In

July of 1969, we held our second group executive meeting at the
107
Distant Force
Beverly Hills Hotel, just one and a half years after we had had
our first one at Rancho Santa Fe. I spoke again on the role of
the group executive to the group of 29 who were present. At this
meeting we also addressed the problem of patent protection on

our products and processes. By that time, Teledyne had 1,012
patents in force in the US and 346 patents in foreign countries.
There were also 285 patents pending. Stephen King, our patent
attorney, briefed us on the patent situation, and it was decided,
for greater efficiency, that in the future all foreign patent applica-
tions be done through the corporate office, rather than through

each small individual company.
Our labor relations policy was another important topic. One
of our outside attorneys, who was responsible for knowledge of
all our union contracts, led a long discussion on these matters.
Most of our companies were non-union and during the years
we had won 80 percent or more of the elections that were held.
But many of our larger units were unionized, especially with
the United Steel Workers and the United Auto Workers unions.
Ryan, Vasco, Continental Motors and Wah Chang were certainly
important in this regard.
A week after that meeting of group executives, I called a
meeting of the controllers of each company. That was followed,

in October, by a large management meeting of all company presi-
dents, controllers and technical managers at Carefree, Arizona.

That was the first meeting, just after the acquisition of Ryan
Aeronautical in San Diego, and the first at which executives from
our newly acquired insurance companies were in attendance.
Argonaut Insurance of Menlo Park, California, United Insurance
of Chicago, Trinity Universal of Dallas and Fireside Thrift of Los
Angeles were all there.
With the end of our major acquisition program we had a
corporation of some 130 companies. Our system of group execu-

tive management and our system of financial reporting were near
108
completion. In order to firm up and consolidate these systems

throughout the corporation, we held a managers meeting at La
Quinta, California. Most of our companies were requested to
bring and display their products, with 34 executives present to
review each group's materials. At this meeting we also discussed
marketing strategies. Tom Shannon described our government's
attitude and regulations on international trade, and Bill Ruth-
erford explained the techniques and challenges of military ver-
sus commercial marketing. Both of these areas are exceedingly
complex, and we were well blessed to have the expertise of these
gentlemen to guide us in our operations. Brown Engineering,
Ryan Aeronautical and the Continental companies also had deep
experience in these areas and contributed greatly to our success.
Our activity in marketing consumer products was described
by Gus Grant, who supervised a group of our consumer related
companies including Water Pik, the dental companies, Olson
Electronics and Packard Bell. These were marketing areas that
were very different from our usual methods of marketing indus-
trial and technical products. Gus was named to the newly cre-
ated post of vice president and group executive for consumer

products. Gus had been president and CEO of the Picker Cor-
poration and had previously been a group vice president of the
Ampex Company.
At this meeting we also announced a plan to enable our
employees to purchase our consumer products at reduced cost.
You may remember that I mentioned Arthur Rock's concern

with executive health and his recommendations to me. Henry
and I were both concerned with our own health and that of
other executives who spent a considerable time at sedentary jobs.
I asked Hardin Jones, a medical psychologist, to speak to our
group on "Life, Health, Zest and the Executive." I had broached
109
Distjnt Force
this subject at several preceding meetings. Earlier in my career

I had expK)sed our people at Vasco to medical experts from the
Greenbrier in White Sultur Springs, Virginia, where we main-
tamed a physical examination program tor our employees.
I can remember quite well the amazement of those executives
when my own doctor told them, "Eat beef once a week, eggs
once a week, skim milk all the time, and [with emphasis] desserts
only once a month."" At the hotel associated with that clinic you
can have fish instead of eggs for breakfast every day. I can attest
to that diet's effectiveness. In 1962 I weighed over 185 pounds

and had failed a treadmill EKG test, but soon after I undertook
that diet I became a 160-165 p>ounder. This diet caused only one
serious mental problem. As each new month started, you had to
decide just when you would have that one dessert on the first — of
the new month or the last of the previous one.
By the end of the "60s, some of our people who had already
had long careers as founders, owners or presidents of their own
companies, as well as senice to Teledyne, were already begin-
ning to retire. One of these was Lynn Smith, an entrepreneur
who had founded a nationwide dental supply wholesale busi-
ness. Lynn was married to a fine lady from the McKenna family
in Latrobe. Later he started a company in Los Angeles, called
Precision Investment Castings, later known as Teledyne PICCO,
which I described earlier. I was pleased to host a retirement din-
ner pany for that great man who had contributed so much to our
efforts- He was my personal friend and a member of the Vasco
board, and was of great assistance in getting me my job at Tele-

dyne by urging his fellow board members to vote for the merger
with Teledyne. Lynn retired in good health, and I'm pleased to
report that his little company still exists.
ilu
Tke
Continued Internal Gro>*th
Some outside mahrsts wondered whaha we could keep op Ac

kind of growth and success we had been hsvine w«ho« Ac
income from coodmiing acquiskioos. Boc Aey rcaDf kadB\
seen
ci ihc
anything yet. In spire of tbe adreisc economic i mMliiinm
I9^0s, as well as a malpractice insnrancc proUem,
and wiAotfc
the contribmioo of additiooal income from

new aafMDons, Tdc-
dyne achieved cooiinoous and rapid growth in sales and mcomc
throughout that difficuk decade of tbe ^TOs. From 1^^ id 19gl
11-4 peiccm, and
our compound annual growth rair in sales was
in net income it was 22.1 percent. Some
of this, in the first ye^-
of that decade,w^s due to the results of oar new financial sector
companies. In the 1970 annual report Henry wrote:
An important cootribucing factor ... [to net mcome

m that year] ... was the iinproi«emenr in the resaks at
the Teled>Tie United Coqwration, oar insorance and

iiKSxnc rose
finance subsidiary. Tefcdyne UniiBd's net
from S10.5 miliioo in 1969 to $15.1 milbon in 197D-
A
portion of Tefcdyne United's increase is
accooiKd for
which
by the results of Argonaut Insurance Company,
aU of 1971) compared to six months
^êre included tor
in 1969.
Establishing the Teled>-ne Identity
new cocnranies cud been

On-m -iliv, m rhe veo" tirsr ye-ars, cfae
Tdedvne ComF^^y'
desi^âreu as, tor example. 'Aniaco, A
alrea>iv oa sratt
When I came there l^t.c, Berkley Baker was
m
reLiavxis ettocts. He
and he was managii^ the comîany s puWk:
sysrem an^
was also in chargp of the company s Kiennhcaaoa
111
Distant Force
had helped set that up. That system specified the typeface, size,
color and other design elements of the company names and the
logotype, and how they should be used on our stationery and our
signage, as well as on our products. In that way every company
and product would have a uniform Teledyne identity and image
throughout the country. When the discussion of how the com-
panies should be identified had come up, Berkley recommended
name or one we gave them,
that instead of keeping their original
followed by "A Teledyne Company," Teledyne should become an
integral part of each name and give each company a more direct
identity as part of Teledyne. He suggested that we do this by

calling them "Teledyne So and So." Henry thought that was a
good we eventually had names such as Teledyne Systems
idea, so
and Teledyne Brown Engineering and so forth. With the Tele-

dyne name up front, our company quickly became recognized
throughout the business world. These company identification
system standards were enforced quite rigorously, and when an
operating company deviated in their printed material or signage,
which a few did occasionally, we brought them to task on that.
Henry was quite interested and involved in this process. He
was very concerned about Teledyne's image. Jay Last told me that
one day in the very early years of the company he happened to
walk past the open door of the PR department and looked in to
see Henry Singleton and Berkley Baker sprawled on the floor of

the office, with some large drawings, debating the exact design,
shape and proportions of the four rhombi that make up the Tele-
dyne logotype. As a consummate mathematician, these propor-
tions were of significant interest to Henry. Within just a few
years, the simple logotype they designed had become an almost
universally recognized symbol of Teledyne, both nationally and
internationally. It still is.
But it seems the particular arrangement of the four rhombi

that make up the Teledyne logo had been done before ours was
112
designed — a long time before. However, this didn't come to light

until much later. Walter Czaus, who was president of Teledyne
Merla for many years, sent us the following information. His
son Joe, who attended the Pontifical Roman Seminary in Rome,
toured the Cathedral of Milan during his Easter vacation in 1985.
The construction of that cathedral had begun in 1386, contin-
ued over a period of almost 500 years, and was finally completed
in 1858. It was built on the existing foundation of the Church of
St. Mary Major (ninth century). Beneath the cathedral, in exca-
vations that are believed to be the baptistery where St. Augustine
was christened by St. Ambrose, Joe found and photographed the
symbol, shown in the pictorial section of this book, which is
virtually an exact replica of our present corporate symbol. Many

of our Teledyne companies have deep roots, but we can't claim
they went back that far!
Another thing of interest was our decision to designate the
manager of each company as "president" of that company, not

just "manager." My feeling was that we needed to keep these
companies where they were, throughout the United States, as
part of their own communities, doing banking in their local
banks, and continuing to be a public citizen of their communi-

ties, participating in local charitable activities and so forth. I felt
it was important to give these managers the title of president of

their company and thus give them the prestige and stature they
needed to act in these local matters.
This philosophy got into our banking relationships and our
charitable trust activities, as well. We had a charitable trust com-
mittee to approve charitable trust offerings, which the compa-
nies could make in their local communities, and we would match
these to a certain extent from the corporate office. We felt it was
always important to have our companies handle these things on a
local level in order to maintain good community relations wher-
ever these companies were located.
113
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Financial Controls
With a complex organization such as ours, which had grown

so rapidly, it was vital that we establish an efficient system of
financial controls and reporting. One publication criticized us
for having some 390 meetings a year with our companies, by

their estimate, which was pretty close. This hardly seems exces-
sive when you consider that we had 130 operating companies,
in diverse fields, to be concerned with. The fact was that we had
no intention of micro-managing these companies from afar. The
managers of these companies knew far more than we did about
their products, markets, competition and so forth, and if they
didn't we'd have to replace them. To help us, we began placing
these companies under group executives, as I've mentioned, who
were also expert in their specialized fields, to coordinate their
operations.
For a corporation of our size, we ran a rather lean corporate
staff confined to the planning and reporting and auditing of the

individual company results. We had a legal department, headed
by the corporate secretary; a financial department, headed by the
corporate treasurer and a controller; a public relations depart-
ment to communicate with our publics, and very few other
activities. I think, at maximum, we had fewer than 150 persons
on our corporate staff. At the corporate level, our basic interest
was in seeing that each company remained a financially healthy
and profitable organization. Although we did establish a group
executive system, we never let our corporate connection to our
individual companies be filtered through too many minds and
levels of management, as many companies do. There was always
essentially a one-on-one relationship between corporate and the
managers of each operating unit.
Each of our companies was headed by a president, who

reported either directly to me or to me through a group execu-
114
tive, and each also had a financial controller. Unlike many other
corporations, each company's financial controller was connected
to both our corporate controller and his company president by a
solid line on the organization chart, rather than having only one
"solid line" boss. George Farinsky was our corporate control-
ler in the beginning. Later, Jerry Jerome held that position, and
later still it was Charlie Rinsch. We really wanted our compa-
nies to operate with considerable autonomy and this placed a tre-
mendous burden on our individual company presidents, Henry

said in an early interview with Forbes magazine. "We depend
on them. We have to trust them. We succeed or fail according
to what they do." This was completely in accord with Henry's
strong conviction that people were the most important factor in
a business, and that they had to be given a chance to do their job.
"Why bother them if they are doing their job," he said.

So what we were doing, in fact, was simply monitoring their
operations to be aware of their needs and performance, and to

detect any business or financial or management problems before
they became critical. To do this we developed a corporate-wide
computer system and programs for financial reporting, so that
we were sure that we were all talking the same language.

A lot of people have said that Henry and I managed Teledyne
by cash flow, and we really didn't do a lot of management by cash
flow. We developed a measure that we called Teledyne Return,
which was the average of your cash return and your profit. We'd
say, "You reported a profit of a million dollars, but you only had
half a million dollars of cash, so you only made $750 thousand

dollars. So tell us about the rest of the profit when you get it."
Henry spent most of his time planning the company's strat-

egy for future moves and directing our investment portfolios. He
was interested in the big picture. I was the one who handled the
day-to-day details of operating the company, but he most cer-
tainly got involved when there were major decisions to be made
115
Distant Force
or problems to be solved. Almost even' day I was in town, Henry

and I usually discussed any of the problems or opportunities the
company was facing. But quite often Henry simply talked about
his philosophy of running a corporation and the various financial
strategies that he came up with as he sat in his corner office each
day, often working at his Apple computer. He was a brilliant
business strategist, just as he was a brilliant chess strategist (he

held a 2100 rating, just 100 points short of a master, according
to Claude Shannon I, and he came up with many creative ideas,
ideas that were sometimes contrary to the currently accepted

methods of managing a large corporation that prevailed in those
days. "He always tries to work out the best moves," Shannon
said, "and maybe he doesn't like to talk too much, because when
you are playing a game you don't tell anyone else what your strat-
^\ is."
In my role as president, I would usually meet with the indi-
vidual company presidents and their group executives three times

a year. Some of the fast-growing companies, where conditions
could be very volatile, very active, particularly the electronic
ones, I sometimes met with four or more times a year. The first
of these meetings, which were held in Los Angeles at my office,
took place in the early fall. I'd hear their Capital Budget Plan for
the next year — their broad range plan for capital expenditures on
plant and equipment. This plan would be submitted in writing
in a format that we had developed. We'd discuss that, and after
the meeting I'd either approve their plan in writing or ask them
to modif\' it in some way. Naturally, we'd discuss other things as
well — ^the business climate for their products, competition, per-
sonnel, and even the world economy, at times.
Then, knowing how much money they could spend on capi-
tal improvements, they could make their first profit plan which
we called Plan was usually submitted about two months
1. It
before the beginning of the next fiscal year. They would make
116
The Ejrfjr
monthhr reports and after the year had

in the foUoiiiiig year,
progressed mootfas we would meet again and tfacr would

for five
make Profit Plan 2, whidi indnded anr retriskins on their first
one. This would allow them to make anr ^^ f^ntrn m ia lands n.
needed, after foor to six mooths of openKkms in the real wodd.

In the fall we would meet again and discQSs their czpoal plan lor
the foUowii^ year.
So w^ had three plannn^ meet ii â lear: the capital asset
plan which would indode what tfadr research budget woold be.
their general plan for growth^ their facilitT needs if anr, acqnisi-
tions they miît want to make and things like that, and then the
two prc^ plan meetii^s. The preskleats of cnr conoinnies oAcn
—
bfongfat other members of their staff enginecrsy sales peopkv
homan relatioos staffs, etc. to these regnlarhr srhfthiird pjamiiiig
meetii^S. Thb gsve me, and others oo nnr staff, a dose indmaqr
with our cocqnnies and sense of confidence n> hear these peaple
speak (ji and occaskmal errors. We real-
their plans, successes
ized, of course, that a compairr s cnssomers dan\ always allow
an emerprise^s plans to dictate the course ci events.
One ctf the thir^ that I am Terr proud of was the umqae
Jerome and Charlie Rinsch
financial reporting system that Jeny
developed and estahKshed and ran. It was a ^rsicm in whidi

the indrridiml cootrollers o£ each canaiiaiR, each profit center,
reported to the president of his compairr and to the home olfioe
controUer'is department at the end of each calendar mondi. Our
fiscal month always (aided on a Fickiay, aiid by the loliaMriiiig Toes-
day morning these reports, firom all 160 reparting mîtifSs were
in our home office ccxKroUer's oîce. They came in by electronic
inail, so Charlie aiid Jerry were always able to pot oat their quar-
terlyand annnal reports on the second Tuesday after the chise
<^ each quarter and the year. We would then peine the tma ncial
resohs for each conîanT in sununary lonnat thaet mciiidfd every
financial detail of their operadonsw In the bcgmHing it woohi &k
ii:
Distant Force
rvs'O pages, and later three or four pages as new product lines
were introduced. For our larger entities, as many as six or eight

products were recognized.
So, we always had the information on the status of our whole
operation. It gave us extra time to plan ahead so that we didn't
have any suq?rises coming at us at the end of the year or quarter

when we had to get a public statement out. It was just a mat-
ter of adding up all the numbers. We were very, very proud of
the speed with which we could report to our shareholders, and
equally important, to ourselves. We always knew what was really
hap|>ening in our company. I notice that today, even with more
sophisticated computer systems, it generally takes three weeks
for most companies to do that. We never had any big mistakes in
our reporting as a result of our system.
With these systems in place we were able to maintain very
close financial control of our operations and our capital manage-
ment. Though we were criticized for this in some business publi-
cations, we were very conservative in our expenditures for capital
equipment and facihties, as well as for research and development.
We concentrated on turning the businesses we owned into effi-
cient cash generators. Our steady increase in sales and net income
for the *~0s decade, in spite of adverse economic conditions, was
achieved through the internal growth of our companies.
This repKDrting system was supplemented by a very close con-
trol of cash. We insisted that most companies use a local branch
bank of our choosing and have their funds automatically depos-
ited as received. The bank would then give the company controller
any needed cash, as approved, during each week. On the Friday
before the next week the company controller would tell our con-
troller the cash they would need and the amount they expected
to receive. Each week they could withdraw that much, and each
wêek on Friday they would have how much they would
to say
get and need the next week, and how much they had done in the
118
week just past. This rule was closely followed and it enabled me to
see each week's deviations or successes. We placed a good deal of
emphasis on our companies' achieving high margins, and we were
very assiduous in encouraging our managers to get out of low
margin products and businesses. Our company presidents could
always get capital for their projects if they were performing well
in this respect, and they were also personally rewarded as well.
There was a certain amount of resistance to these controls
in some quarters. Many of these companies had been started by
local entrepreneurs who had close ties in their communities, and
there was a certain amount of resentment at now being finan-
cially responsible to so-called "absentee managers" half a con-
tinent or more away. These feelings gradually dissipated as new
and younger managers were brought up through their organiza-
tions. Some of these companies had also reached a level of matu-

rity, before they were acquired, in which their managers and staff
had become quite comfortable with their current operations and
sales and profits and lacked the drive to innovate or take risks in
expanding their markets, or product mix, or sales. This attitude
also dissipated in most cases, with our help, as time went by.
Contrary to what you might assume about the close finan-

cial control this system embodied, Teledyne company presidents
were given considerable freedom in running their companies, as
long as they continued to perform. They actually were freed from
dealing with bankers (aside from their local accounts), or with
the stock exchange, or the SEC, or tax returns, and could con-
centrate on the efficient management of production and market-
ing activities.
we were aware at all times of the performance of each
Since
company, we were able to establish an incentive system for hon-
oring those companies that performed exceptionally well. We
called it the Triple Crown x\wards. This annual award was given
to companies that set an all-time record in three categories: Sales,
119
Distant Force
Net Income and Net Cash Flow. We also recognized those com-
panies that were outstanding in two of the three categories. We
called that the Double Crown Awards. I also announced the Top
Ten and Top Five companies, as well as Crown Awards in my
internal management newsletter, called the Intracom, which was
distributed to all company executives monthly. Our top perform-
ing managers were also compensated accordingly.
Investing in Ourselves —^The Stock Buyback Period

In the early '60s, Henry had used Teledyne stock to make a lim-
number of equity acquisitions in relatively small companies.

ited
He was limited in the size of the companies he could acquire

by his company's relatively low stock price at that time. But, by
1965, Teledyne stock had jumped from $15 to $65 a share in
one year, largely because of the company's success in winning

the IHAS inertial helicopter guidance system contract against
big competitors such as IBM and Texas Instruments. That gave
us the ability to use Teledyne stock to acquire more and bigger
companies, such as I've described, until there were 130 in all by
the end of the decade.
These events were followed by the bear market of the early
'70s, and Teledyne stock prices fell, along with all the rest, from
about $40 to less than $8. Henry saw opportunity where most
other company heads saw none. Teledyne stock that had gone
from a P/E ratio of about 30 to 70 in the '60s suddenly went to a
P/E ratio of about 9 or 10 or 11 to one, which was about the same
or less than that of companieswe had been buying.
One morning in May Henry walked into my office
of 1972,
at about 8:30 and said, "George, we're going to make a bid for
our stock at $20 a share." I said, "Are we really going to do
20
that?" I was totally amazed, as he hadn't even hinted about that

tome before. It was also a surprise to everyone else at Teledyne
when they heard about it, including Art Rock, who was certainly
involved in most of our stock activities. This was an excellent
example of how Henry made all investment and stock decisions
on his own. He did this every single time. They were all done
when our stock was at a low P/E ratio. He believed that our stock
was grossly undervalued and it was the first of a series of eight
stock buyback offers.
In the July 9, 1979, issue of Forbes magazine, Henry was
quoted as saying, with a laugh, "In October, 1972, we tendered
for one million shares and 8.9 million came in. We took them
all at $20 and figured it was a fluke, and that we couldn't do it
again. But instead of going up, our stock went down. So we kept
tendering, first at $14 and then doing two bonds-for-stock swaps.
Every time one tender was over the stock would go down and
we'd tender again, and we'd get a new deluge. Then two more
tenders at $18 and $40."
The first six buybacks were all in the period from 1972 to
1976. The market reacted adversely to this at first, not under-
Year
Distant Force
standing what Henry was accomplishing. But as the number of

shares went down and the company's operating income continued
to grow, the earnings per share increased rapidly and dramati-
cally. In 1970, net income per share was $1.64. By 1975 it was
$6.09 per share; in 1976, $10.79; and in 1977, $16.23 per share.
With the first six stock buybacks, a total of some 22 million
Teledyne shares were repurchased, reducing the number of out-
standing common shares to less than 12 million. A seventh stock
buyback offer was made in 1980 and the final one in 1984, at
the extraordinarily high price of $200 per share. This was about
$30 above the current market price and eight million shares were
bought back. By September of that year the stock had climbed
to $302 per share and was the highest priced stock on the New
York Stock Exchange.
The total value of these buybacks was over $2.5 billion, and
more than 85 percent of common shares were retired. Shares out-
standing had dropped from 88,827,372 in 1971 to 22,564,756
in 1980. Henry also purchased another five percent of Teledyne
shares on the open market at various times, bringing the buy-
back total in the years 1972-1984 to over 90 percent of the
company's shares. (See Appendix Table for the details of each of
these buybacks.)
It is interesting to follow the story of the stock prices before
and after each of these transactions. In 1972, Teledyne opened
at 2278, March 9, dropped below 20 on July 10,
reached 28 on
and was 17 on October 16 when the offer was made. On Novem-
ber 3, 8.9 million shares were accepted and the stock reached a
high of 23y8 on November 24. It closed the year 1972 at 19^4,
but during 1973 dropped to 12 on May 22, and closed the year
at MVs. The offer of $14 cash in January 1974 netted only 1.6
million shares and the stock dropped to \OVa on May 30. Henry
then offered to buy stock at $20 worth of a new Teledyne Sub-
ordinated Debenture paying 10 percent interest, and 4 million
122
were bought. Subsequently, the December 1974 and April 1975

offers of $16 and $18 worth of Teledyne bonds yielded 5.5 mil-
lion shares.
One forgets that interest rates were extremely high (20 per-
cent not being uncommon) in 1974. Thus the 10 percent bonds

being offered would trade themselves for only about $76. After
the offer closed, the stock continued to drift down and reached a
low of 778 on December 2, closing the year at 10y4,
Sixteen dollars of those bonds only fetched 1.9 million shares,
but by April 1975 a price of $18 for the bonds yielded 3.6 million
shares, or double the number at $16. The stock closed in 1975
at 2278.
The February 1976 offer of$40 cash was made, giving 2.5 mil-
lion more shares to the company, and the stock reached $40 on
February 27, $50 on March 9 and $60 on May 12. The stock
closed in 1976, having reached a high of 7iy4 on December 15.
In 1977 the stock traded in the 50s and 60s, with a low of
50y4 and a close of 62. It closed 1978 at 967s after a high of 118
on June 13. It closed 1979 at 133y4 after a high of 153y2 on Sep-
tember 20. In the early part of 1980, the stock reached 174y4 on
September 11 after a low of 92y4 on April 21.
Henry then retired most of the $6 convertible preferred stock
offered in acquisitions between 1966 and 1968 before getting
11.7 million more shares in 1980 and 1984 by using $160 of
Teledyne 10 percent bonds on one in 1980 and $200 of hard
earned cash for each share in May of 1984.
That's the 12-year story of his activity after telling me one
morning to buy some stock for the company.
It is remarkable that Henry was able to finance the majority
of these buybacks with cash derived from operations. When debt
was incurred it was quickly paid off from operational income.
The fact thatno dividends were being paid during this period cer-
tainly helped make this possible. The study I mentioned earlier.
12.
Distant Force
prepared by Aleem Choudhry and Will Thorndike of the Har-

vard Business School details this remarkable accomplishment.
Henry's timing and strategy couldn't have been better. During
the 1968-74 period he considered bonds as high risk and stocks
as low risk, contrary to popular opinion, and he instructed his
insurance companies to follow that advice in their investments.
These companies did just that, moving their portfolios from
fixed income securities to equities when the stock market was
depressed, and achieving large equity positions in major corpora-
tions such as Litton and Curtiss-Wright. By 1983, a roaring bull
market had begun and his judgment was vindicated. Sharehold-

ers who had stayed with the company from the first buyback in
1972 had achieved a gain of some 3,000 percent by this time.^
In the nine years from 1969 to 1978, our operating results were
exceptional as well. Annual sales had increased 89 percent and
net income increased 315 percent."*
As I mentioned in the introduction to this book, and as is
worth repeating here, Henry Singleton had a virtually unmatched

record in his era of value creation. An investor who invested in
Teledyne stock in 1966 was rewarded with an annual return of
17.9 percent over 25 years, or a return of 53 times his invested
capital. That compares to 6.7 times for the S&P 500, 9.0 times
for General Electric, and 7.1 times for other comparable con-
glomerates.^
My good friend Jack Hamilton, who, as I've mentioned, was
a long-term Teledyne manager and group executive, as well as a
major shareholder, has drawn up a chart that traces the amazing
growth of shareholder value that Henry was able to achieve over
the course of his years at the helm of Teledyne. As you will see, if
you peruse the chart in the Appendix, 1,000 shares of Teledyne
^Fortune Magazine, April 29, 1985.

' Forbes, }u\y 1979.
^
Choiidrv and Thorndike Harvard Business School Analysis.
124
stock bought in 1966 at a cost of $86,000 had grown to 59,919

Teledyne shares in 2004 through stock sphts, and with accumu-
lated stock dividends and cash dividends, plus the value of stock
and dividends of the subsidiaries spun off to Teledyne sharehold-
ers, reached a peak value in that year of $12,573,273.
In a book titled Good to Great by Jim Collins, the author
considered that Teledyne had never become a great company
because its founder had not prepared a successor when he
retired, and thus the return to shareholders declined abruptly at
that point. He presented a graph titled: The ratio of Teledyne's
Cumulative Stock Returns to the General Market. It showed
the steep rise in that ratio over the years to a peak of about nine
times at the point of Henry's retirement, and then a decline in
the following years. What this graph did not include, after Hen-
ry's retirement, was the return that shareholders still receive
from the stock of the financial companies — Unitrin, Argonaut
and other entities that had been spun off to them and that con-
tinue to provide them with returns that actually far exceed the
returns from Teledyne itself. If cumulative return to sharehold-
ers is his criterion in that graph, he missed the mark by a wide
margin in judging Henry's company.
The original Teledyne Corporation, of course, no longer
exists. After its merger with Allegheny Steel in 1996, many of its
operating units were incorporated into Allegheny's operations,

others were closed or sold, but a core group of the most impor-
tant electronics and aerospace companies was spun off in 1999,
and now operates very successfully under the name Teledyne

Technologies, Inc. It is managed by Dr. Robert Mehrabian, who
is chairman, president and chief executive officer. (See Epilogue
at the end of this book.)
Two other independent companies, Allegheny Technologies

and Water Pik Technologies, were also formed. The original
shareholders of the company Henry Singleton founded are still
125
Distant Force
enjoying exceptional returns, indeed, on their investments from

these companies.
Our Elusive Dividends
For many years Teledyne stock paid no dividends, particularly

cash dividends. Henry's conviction was that the cash was bet-
ter employed in growing Teledyne's business, which would ulti-
mately be more profitable to the shareholder than cash. By 1970,

however, we did begin to give our shareholders stock dividends.
The advantage of stock vs. cash to the stockholder, of course,
was that they could avoid immediate taxation on the dividend
and pay only capital gains tax when they decided to sell some
stock. The dividend situation, however, never really was a factor
in the popularity of Teledyne stock through the years.

Teledyne did begin to pay stock dividends to the holders of
common stock in 1967. We paid a 3 percent stock dividend, in
keeping with Henry's idea that this offered shareholders a tax
advantage and more flexibility in handling their assets than a
cash dividend would. Stock dividends of 3 percent were paid in

each year up to 1977. In 1978, the stock dividend was increased
to 10 percent, and in 1979 an 8.5 percent dividend was paid. The
history of these stock dividends as well as stock splits is shown in
the corresponding table (see Appendix).

Cash dividends on common stock were finally introduced
only in the late 1980s. In 1987, a dividend of $1.00 per share was
paid; 1988, $1.00; 1989, $4.00; and 1990, $0.20 per share.
126
Our Second Decade: Growth
Without Major Acquisitions
The Roller-Coaster VOs
By 1970, the world was entering a new ballgame. I've mentioned

some of Henry's reasons for stopping acquisitions, but that was
only part of the story. The decade of the '70s was one of great
national and international turmoil. This was the decade of the
Pentagon Papers, Watergate, and the resignation of both a United
States vice president and president under threat of impeachment
under two separate scandals. A classic "stagflation" — inflation
without economic growth — set in and commodity prices soared.

The nation was paying a high price for Johnson's "Great Society"
programs, as well as for the Vietnam War. Then, an oil embargo,
instituted by Arab countries in 1973 in response to US support
of Israel in the Middle East war, caused severe energy shortages
and energy prices skyrocketed. Crude oil prices quadrupled in
just three months. The era of "gas lines" had begun, and by 1974
the country was in its worst recession in 40 years.
In anticipation of this Henry had become very aggressive
in paying down the corporation's debt in the years leading up
to this period. In his letter to shareholders in the 1970 annual
report he wrote:
It will be noted that the interest expense of Tele-

dyne, Inc. declined substantially in 1970. This decline
reflects the program of debt reduction, which has
127
Distant torce
been carried out during the past two years. The com-
bined short-term debt of Teiedyne, Inc. and Teledyne
United, which stood at approximately $180 milHon in
January 1969, and at $116 milHon in October 1969,
was completely eliminated by the end of fiscal 1970.
The debt reduction in 1970 was accomplished from
Teledyne's internal cash flow, without any conversion
of short-term to long-term debt. The debt repayment
was also made without payment of dividends by the
insurance and finance subsidiaries. On the contrary,
Teledyne increased its investment in Teledyne United
from $124.3 million to $208.5 million, primarily by
advancing funds for the repayment of Teledyne Unit-
ed's bank debt.
The combined annual interest expense of Teledyne,
Inc. and Teledyne United was $25.2 million in 1969
and $23.0 million in 1970. Interest expense of Teledyne
United in 1970, which totaled $14.0 million, included
$5.3 million payable to Teledyne, Inc., reducing Tele-
dyne's net interest expense for the year to $9.0 million.
The current rate of expense for Teledyne and Teledyne
United combined is below $20 million annually.
During the 1960s we had grown at a rapid rate both through

our aggressive acquisition program and our development of effi-
cientmanagement and financial controls. Shareholder equity

had grown at a compound annual rate of 94 percent, total assets
increased at an annual rate of 100 percent, and net income

grew at an annual rate of 138 percent. The all-important fig-
ure of earnings per share also compounded at 72 percent per

year. As a result of this sustained, rapid growth we had become
a corporation of substantial size. Our total consolidated assets
were approaching a billion dollars, not including the assets of
128
Our Second Decade: Growth Without Major Acquisitions
our insurance and finance companies which placed an additional

$600 million under our management. This spectacular growth
had pushed shareholders' equity past the half billion dollar mark.
Cash flow, the key financial measure of our growth potential,
was nearing the rate of $100 million annually. We had also been
able to reduce our short-term debt to a very small percentage of
capital, and we continued to reduce it further.
Our size and financial health allowed us to undertake proj-
ects of considerable scope, which had been beyond our reach in
earlier years, in spite of the economic and social ills of the 1970s.
We managed to overcome some early difficulties and achieve
exceptional growth in both sales and net income in our second
decade. From annual sales of $1.2 billion in 1970 we had gone to
$2.9 billion in 1980, and net income of $62 million grew to $344
million, all through internal growth without further acquisitions.
At this point, our cadre of talented and dedicated employees had
grown to some 55,000, with 131 presidents and general manag-
ers helping to achieve these results.
129
—
Distant horce
1970: New Directions
In the core business on which Henry had founded his company

aerospace and electronics —^Teledyne Systems was awarded a
contract to supply the launch computers for NASA's Delta Space
Launch Vehicles, These systems used our Micro-Electronic Mod-
ular Assemblies (MEMA) packaging techniques that we had
developed for the Centaur guidance system, and thus we were
providing the launch guidance for both the heavy (Atlas/Cen-
taur) and medium weight (Thor/Delta) rockets used for many of
that era's unmanned space payloads. Those computers are still
used today for the current versions of Thor launchers.

With our terminal descent landing radar systems, developed
by Teledyne Ryan Electronics, we were also involved in bringing
space payloads down safely at their destinations as well as getting
them safely off the ground. Teledyne Ryan's Doppler radar, that
had provided descent rate information to the astronauts on the
Apollo XI and XII moon landings, as well as on unmanned space
exploration missions, was chosen for use on the two upcoming
Viking unmanned Mars Lander missions. As an example of how
fast solid-state technology was advancing at that time, these sys-
tems had only nine discrete parts, compared to the 256 parts
used in the solid-state transmitter built for the Lunar Module
Landing Radar.
At this time we combined the original Amelco semiconductor
operation with Teledyne Continental Device, and later acquisi-
tions, to form the Teledyne Semiconductor Company.
Teledyne Continental Motors introduced the first of its
advanced Tiara Line of general aviation aircraft engines, after
some four years of development and thousands of hours of test-

ing. This new engine line offered higher performance capabilities
with substantially lighter weight, longer service life.
130
Meanwhile, Teledyne Isotopes delivered three of its Sentinel

RTGs (Radioisotope Thermoelectric Generators) to the US Navy
to power weather stations positioned on floating buoys in the Gulf
of Mexico. They provided vital hurricane location and tracking
information. These power systems generated electrical power for
the weather instruments and transmitters on these buoys for five
years or more without maintenance or refueling.
A significant development in our metals operations was the
installation of a new metal extrusion facility at our Wah Chang
Albany plant to make heavy tube and rod zirconium products for
nuclear reactor applications.
There was also considerable activity in our consumer and
commercial products area. Teledyne Aqua Tec added a tooth-
brush accessory to its very popular Water Pik oral hygiene
appliance, Acoustic Research added a new FM receiver to its
growing line of high fidelity speakers, and Teledyne Laars,

makers of gas-fired pool heaters, introduced a new line of tank-
less hot water machines for spas, hotels, restaurants and large
residential installations.
Teledyne Packard Bell, meanwhile, introduced a new line of
21 "-screen color television models. Many of these models were

housed in the handcrafted, solid wood furniture-grade cabinets
that Packard Bell was famous for. During that year, the company
achieved the highest market penetration in its history, with a 50
percent higher share than its previous high.

Distant Force
1971: A Difficult Economy and Labor Strikes
1971 was the first year in which we did not record a year-to-
year increase in net income and earnings per share. In that year
our consoHdated sales decHned 9.4 percent to $1.1 bilHon, and
net income was down 9.2 percent to $56.2 miUion. Earnings
per share dropped 11.7 percent to $1.58. These resuhs were due
in large part to the difficult economy that was emerging, and
in part to a strike of 3,900 United Auto Workers at our Mus-
kegon, Michigan, plant. Continental had two main operations
there. One made industrial gasoline and diesel engines for pickup
trucks, light trucks and industrial applications. At a separate
plant we made diesel engines for the US Army tank fleet and
for Israeli tanks and those of other countries as well. This latter
business declined significantly when the military began to use jet
turbine engines to power its tank fleet in the 1990s. Both sales
and net income declined in our industrial products, aviation and
electronics, and specialty metals segments. Sales in our consumer
products area increased slightly, but there was a decline in net
income.
Our insurance and finance subsidiaries, on the other hand,
showed a significant gain in revenues, and our equity in the net
income of these unconsolidated subsidiaries rose substantially,
offsetting to a large degree the income reductions in our other

product lines, confirming Henry's belief in the need to own
financial institutions.
In spite of this temporary setback, significant technical

accomplishments were being made by virtually all our operat-
ing units. Our bismuth-telluride-based thermoelectric genera-
tor that powered the Nimbus weather satellite launched in April
1969 was still going strong, some 10 months beyond its original
design life.
132
Teledyne Firth Sterling, in cooperation with Teledyne Wah

Chang, had developed an important new castable carbide cut-
ting tool material that outperformed sintered carbide materials
five-fold. The new process for producing this material required
a major scale-up of previous consumable and non-consumable

melting techniques.
In the geophysicsfield, one of Teledyne Geotech's seismom-
eters, which had been placed on the moon by Apollo 14 astro-

nauts, was transmitting important seismic information back
to earth. A number of the company's Strong Motion Accelero-
graphs, which had been put in place on vulnerable structures
such as nuclear power plants and large buildings to monitor
their response to earthquakes, were automatically triggered by
the severe February 9 earthquake that struck the Los Ange-
les area. They logged important information on the response
of those structures to ground movement. Teledyne Geotronics
aircraft immediately made precision aerial photographs of the
affected areas, which were very valuable for later analysis of the
extent of the damage.

At our annual meeting for that year we exhibited our new
Packard Bell 25" television-stereo combination unit in its fine
wood cabinetry, and our latest AR hi-fi speaker line using the
revolutionary acoustic suspension principle the company had
invented 16 years earlier. Teledyne Water Pik added a new breath-
freshener product to its well-known Water Pik oral hygiene device
and Shower Massage. In other consumer market activities, Tele-
dyne Acoustic Research expanded its European manufacturing

operation at Amersfoort, Flolland, to meet a five-fold increase
in European sales. A new, modern 18,000-square-foot facil-
ity replaced the original 5,000-square-foot facility. And Olson

Electronics, our retail outlet for consumer electronic products,
opened two new stores in this year, bringing our total number of
stores to 43, with plans for several more.
133
Distant Force
At this point, over 15,000 Teledyne Ryan Aeronautical Fire-
bee remotely piloted aircraft missions had been flown by the

military services, and the supersonic Firebee II, powered by a
Teledyne CAE turbine engine, had reached speeds of over 1,000

miles per hour in US Navy operations. Teledyne CAE had also
developed a low-cost, expendable jet turbine engine for use in
our country's most advanced cruise missiles, and Teledyne Iso-
topes' well-proven radioisotope thermoelectric generators were
chosen for NASA's 1972 and 1973 Jupiter probes.
In the area of commercial aviation, we were providing cast
magnesium thrust reversers for the Boeing 747 and in-flight data
recording systems for a variety of aircraft. Teledyne Continental
Motors began marketing its new Tiara series piston engines to
the general aviation market.
1972: The Downward Trend Reversed
By 1972, we were able to reverse the previous year's downward

trend and achieve sales increases in each of our major product
lines, as well as an increase in net income from all categories
except consumer products. The decrease in net income from our
consumer products segment was due in large part to the costs we
incurred in expanding our television and stereo product line to
compete on a national basis. Up until this time our Packard Bell
television line had essentially been a West Coast brand, and we
suffered from increased competition from both domestic national
brands and imports. During this year we expanded our distribu-
tion into the Midwest, East and South, and more than doubled
the number of retail outlets selling our televisions and stereos.
To accommodate our growth in this field, and

further to meet
the competition of lower cost imports, we also established new
manufacturing facilities in Tennessee and Mexico.
134
Teledyne Acoustic Research's penetration of the European

market continued at a rapid rate, after the previous year's expan-
sion of our production faciHty in Holland. The introduction of our
new professional LST (Laboratory Standard Transducer) speaker
system was an impressive success on the Continent with high praise
in both European and domestic audiophile publications.
During the year, Teledyne Isotopes Energy Systems division
received an order from the US Navy to produce what was then
the world's largest radioisotope thermoelectric generator. Named
the Sentinel lOOF, it was designed to produce a minimum elec-
trical output of 100 watts for five years or more. Designs for
still higher output RTGs were already on the company's drawing
board at that time.
Our strong participation in NASA's space programs contin-

ued with Teledyne Ryan's landing radar again guiding a manned
mission to a soft landing on the moon — this time the Apollo 16.
At that date, Ryan landing radars had assisted in soft landings
of all the lunar landing spacecraft: five manned Apollo missions

and five unmanned Surveyor missions. Teledyne Isotopes also
designed and produced four 30-watt SNAP-19 RTGs to power
the Pioneer F spacecraft on its 900-day flight to Jupiter.
Teledyne Systems' guidance computer was used to guide

NASA's Earth Resources Technology Satellite, also know as the
"Ecology Satellite," into polar orbit. Described by Dr. John Clark

of NASA as the most important unmanned satellite NASA had
ever made, it scanned the earth on a 24-hour basis for a year,
providing vital information, that had never before been available,
to agriculturists, geologists, water resource specialists, meteorol-
ogists, oceanographers and many other scientists.

In down-to-earth applications, Teledyne Sprague provided
The Boeing Company with a centralized hydraulic test station
that simplified test operations in the production of the 747 air-

craft. Teledyne CAE was chosen by the US Navy as the sole source
135
Distant hurce
to develop a preproduction, low-cost turbojet engine for its new

Harpoon anti-ship missile, and was chosen by the US Air Force
to carry out an eight-month demonstration phase for the engine
of their Subsonic Cruise Armed Decoy (SCAD) system.

A significant event in our electronics operations was the
licensing of Sumitomo Electric Industries, by Teledyne Electro-
Mechanisms, to use Teledyne's proprietary production methods,

on a royalty basis, for producing flexible etched circuitry com-
ponents. This type of electrical circuit, which is now common-
place, made possible a reduction of assembly costs of as much as
50 percent, weight by as much as 60 percent and volume by as
much as 80 percent in the production of electronic equipment.
Our insurance and finance operations provided approxi-
mately 30 percent of our revenues in this year, and about 42 per-
cent of our net income.
1973: An Improved Economy, But the Year of the

Arab Oil Embargo
Our consolidated sales for this year reached $1,455 billion, with
a net income of $65.4 million. These results were the best in Tele-
dyne's history up to that point, and we set new records in sales,

net income and earnings per share. Our consolidated companies,
consisting of product manufacturing, sales and service organiza-
tions, accounted for 62.4 percent of our net income, while the
unconsolidated insurance and finance subsidiaries contributed
37.6 percent.
Meanwhile, Henry continued his aggressive stock buyback
program. He made a tender offer to buy 1 million shares at $20 a
share in 1973, and 8.9 million shares were tendered. He bought
them all. The average outstanding common shares were reduced
from 35,088,278 in 1972 to 25,872,770 in 1973. This helped
136
raise the net income per share from $1.58 in '72 to $2.45 in '73.
We had 54,000 employees at the close of this year.
In 1973, the improved economic climate of that year ben-

efited most of our major product lines, with the exception of
our consumer products, where efforts to expand our television
and stereo sales continued to be costly and made little progress.
There was a generally high level of industrial activity during the
year, however, and this allowed a sharp improvement in our spe-

cialty metals business. Orders for our zirconium products, used
in nuclear power generation, were particularly strong, and our
tool and die steel sales, because of the generally high level of
industrial activity, increased as well. Demand for our electronic

components increased also, and our oil exploration activity,
because of the nation's energy shortage, was well ahead of the
previous year.
Growing national and international concern for the environ-
ment and public health presented a number of opportunities for
our various technologies. Teledyne Isotopes Energy Systems divi-
sion, for example, was chosen by the Environmental Protection

Agency to provide its Electra Cell hydrogen and oxygen genera-
tors for the Community Health Air Monitoring program. This
equipment was used in the first 23 stations across the nation that
monitored airborne concentrations of sulfur dioxide, oxides of
nitrogen, ozone, hydrocarbons, carbon monoxide, and particu-
late matter on a continuous basis. There were also options for
60 more stations to be installed at a later date. The company's
hydrogen generators were also chosen by the General Public Util-
ities Corporation for use in 45 remote air quality-monitoring sta-
tions near power plants in Pennsylvania and New Jersey.

Teledyne Analytical Instruments introduced a new system,
developed in cooperation with a major oil company, that can
detect as little as one part per million of oil in water for use
in pollution control and abatement programs. In a related area.
137
Distant Force
Teledyne Triple R played a vital role in the design of a major

wastewater management system, in Muskegon County, Michi-
gan. This system turns a potential pollutant into a valuable
community resource by using treated wastewater from urban
areas as a nutrient for growing various farm crops. The system
was designed to process up to 80 million gallons of wastewater
daily.
Another innovative product helped relieve the growing pres-

sure on the nation's forest reserves. Using the roll-forming tech-
nology developed for aerospace and other applications, Teledyne
Metal Forming introduced a line of steel floor joists for the con-
struction and home building industries, which are economical,

lighter than wood and easy to install.
Teledyne Isotopes Energy Systems division was a leader in
developing hydrogen as the ideal non-polluting fuel for almost

any energy application. The company was already designing elec-
trolytic hydrogen generating plants with capacities of 25 tons per

day. Energy Systems was also carrying out research to reduce
the capital costs of large-scale hydrogen plants by 50 percent,
and operating costs by 20 percent, in anticipation of a national
energy policy based on a partial or total hydrogen fuel economy.

All this was in the '70s, foreshadowing the interest in hydrogen
as an energy medium that is so much in the news today.
Near the end of the year, however, an event took place that
would have a profound effect on the United States and the world.
Syria and Egypt, with the support of the Soviet Union, suddenly
made a surprise attack on Israel in October. In order to prevent
the complete annihilation of that country, the United States
made a major effort to re-supply Israel with needed equipment
and materiel. Israel was finally able to push back the attackers
successfully. In retaliation for that action, the Arab oil produc-
ing nations cut off oil supplies to the western world. Oil prices
soared, gas lines became common and rationing was instituted.
138
This action was largely responsible for the worldwide recession

of 1974. Oil price had gone from approximately $2.50 a barrel to
about $10, and it became quite obvious that the world economy
was driven by energy costs. It is interesting that recently the price
of oil has reached over $60 per barrel.
1974: All-Time Record Sales, But Substantial

Insurance Losses
In spite of the Arab oil embargo and recession of 1974, sales of
our consolidated companies achieved an all-time record level of
$1.7 billion in that year. These results, however, were counter-

acted by a substantial loss in that year from our insurance group.
Profits from our life insurance group were satisfactory, but we
had adverse results in our property and casualty insurance activi-
ties, primarily because of the very heavy loss we experienced in
Argonaut's medical malpractice business, which I describe below

under the heading "The Malpractice Trap." As a result, our net
income declined from the previous year's level of $65.4 million
to $31.1 million, after a write-off of $104 million because of

Argonaut's loss.
Up until this point in Teledyne's history, our fiscal year had

ended on October 31, based on the original founding date, but
in order to meet the regulations governing insurance company
reporting and state-by-state control, we changed our reporting
year to the calendar year, beginning in 1974.
Because of the growing needs of the health care industry to
provide safer patient care. Argonaut developed a series of bul-
letins called Medical Alert Communications (MAC) for distribu-
tion as a public service to the company's professional liability
policyholders. This was the first publication of its kind produced
139
Distant Force
by the insurance industry, and was the forerunner of other edu-

cational and loss prevention materials that Argonaut produced.
Our stepped up international marketing efforts continued to
bear fruit in this year, with exports for the first nine months of the
year 20 percent higher than in the previous year and an approxi-
mate increase of 55 percent over 1972. We did, however, run into
the problem of delayed payment on some of our receivables, and I
reemphasized the policy I had expressed at our LaCosta manag-

ers meeting that exporters must pay close attention to the credit
risks involved, and not expect to discount their receivables.
In other activities of that year, Teledyne Readco was awarded

a contract to build the world's largest welding positioner to be
used in the final assembly and welding of the world's most power-
ful hydraulic turbine runner at Grand Coulee Dam, and Teledyne
Isotopes continued work on three prototype oxygen generators
for the US Navy's submarine program. Teledyne Ryan rolled out
two advanced-generation, high-altitude remotely piloted air vehi-

cles built under contract for the US Air Force's Compass Cope
program. These aircraft quickly set a world endurance record for
unmanned air vehicles.
The man who founded Ryan Aeronautical and brought it to
world renown, T. Claude Ryan, was inducted into the Aviation

Hall of Fame on December 14 of this year at Dayton, Ohio. It
was a well-deserved recognition of a life devoted to aviation and

pioneering at the advanced edge of aerospace technology. Barry
Shillito, president of Teledyne Ryan, and Bill Wagner, formerly
vice president, were among 10 new members added to the nomi-
nating board of the Aviation Hall of Fame. Bill had written the
book Ryan, The Aviator, which chronicled Claude's life, and had
just published another called Ryan Broughams and Their Build-
ers. It was a history of the renowned line of closed cabin mono-
planes, the most famous of which was Charles Lindbergh's Spirit
of St. Louis.
140
In our continuing efforts to streamline our operations and

create greater efficiencies, we combined the formerly inde-
pendent but related companies Teledyne AUvac and Teledyne
Titanium into one operating company under the presidency of
Teledyne Allvac's president John Andrews. Teledyne Titanium
had outstanding growth under the direction of Oliver Nisbet
and Buddy Vaughn, and had just completed a record year in sales
and profit. It was an effective addition to Teledyne Allvac where

a major part of the titanium production could be processed into
mill products.
In December of this year we had offered shareholders the

opportunity to exchange shares of common stock for a new issue
of 10 percent subordinated debentures due in 2004, at the rate of

$16.00 principal amount per share. The offer expired in January
of 1975, with approximately 1.9 million shares tendered.
The Malpractice Trap
Jack Bowley was running Argonaut at the time it was acquired.

He and Henry would sit in Henry's office for long periods, dis-
cussing Henry's intentions in running the company's investment

portfolios. He would explain to Jack how we were going to invest
more heavily in equities. All insurance companies were very sen-

sitive to the demands of the state Departments of Insurance that
sufficient reserves were held to meet claims in future years, and
Jack was worried about that. Jack and Henry became very close,
in that early period.
At one point, Jack and several of his associates proposed

to Henry that Argonaut should expand its medical malpractice
insurance business from its limited coverage for hospitals, which
it was already offering, to broader coverage that would include
individual physicians. After many sessions about this, Henry
141
Distant Force
finally said, "Jack, you may do this only if you reinsure 95 per-
cent of the risks on that business." Jack Bowley assured him that
this would be done and Henry allowed Argonaut to expand their
malpractice business in the early 1970s.

Some time later, I met some insurance brokers at a convention
who knew of Argonaut's medical malpractice insurance writings.
One of them said to me, "George, the reinsurance you think is
in place on that business is questionable, or even non-existent."
Well, I immediately returned to Los Angeles and explained to
Henry that a very distinguished insurance executive had told me
we didn't have any reinsurance on that business. We investigated
the whole thing and, as it turned out, we would have a large loss
of $104 million, reportable in the third quarter of 1974 —the big-
gest loss in our history.

We wrote off that medical malpractice business, but this
was the type of insurance that has "a long tail," meaning that
claims could be brought against those policies long after they
had been terminated. We set up an office in Chicago just for
handling those claims, and that office still exists today, some 30
years later. Argonaut had to increase reserves in later years as
well, after 1974, but not as much as for that initial loss.
Most of Argonaut's reserves at that time were held in the
form of marketable securities, with a large percentage invested
in short-term commercial paper and certificates of deposit, and
were adequate to cover the expected losses. The company's finan-
cial condition was sound, but we had to prepare to pay out those
reserves gradually over several years. We took steps to increase
premium rates for this coverage, cancel policies and discontinue
providing this coverage, and were able to deal successfully with
a number of lawsuits opposing rate increases and cancellations.
Well, Jack Bowley had misled Henry, and it had resulted in Tele-
dyne's only really big loss. In a short time Jack Bowley was no
longer with the company.
142
We then focused our efforts on redirecting Argonaut's activi-

ties back into its principal business, workers' compensation insur-
ance. As a step in this direction, at the end of the year we took two
of the top executives in our financial management, Jerry Jerome
and Charlie Rinsch, away from their duties at the corporate office
and reassigned them to deal with Argonaut. Jerry, who joined

the company in 1962 and had become Teledyne's treasurer under
George Farinsky in 1968, was made president of Argonaut.
Charlie Rinsch, who had joined us in 1965 as manager of
Corporate Planning and ultimately became vice president and
treasurer of Teledyne, Inc., worked with Jerry at Argonaut as
controller. Charlie had played an important role in setting up our
management and accounting systems in Teledyne's early years.
We later felt he was an ideal candidate to run Argonaut and we
appointed him as Argonaut's president in 1988, freeing Jerry for
other assignments. Charlie ran that company successfully through
the 1990s until his retirement in 2000. He contributed greatly to
Teledyne's and Argonaut's success over the years, and I'm sorry
to say he passed away in 2000, shortly after he retired.
After that pre-tax write-off of $104 million, Jerry and Char-

lie finally got Argonaut out of the malpractice business and back
on track, but it took several years. Both were assigned to duty in
Menlo Park for a long period of time many years later. In 1986,
when the spin-off of Argonaut was made, Charles Rinsch was
named CEO, and Jerry Jerome was put on the board with Henry
and me.
To prepare for any further difficulties this might lead to,
we consolidated each of our insurance company portfolios and

moved into short-term securities. Later, when the crisis had
passed, Henry reallocated the insurance company investments
into $900 million worth of bonds and $600 million in equities.
From that time on, Henry was always very careful that
Unicoa and the other insurance operations were always covered
143
Distant borce
by adequate reinsurance, Unicoa had been investing their assets

in real estate property, which was a typical insurance company
hedge, and Henry took great pains in educating them in his phi-
losophy of investment in equities.
In 1980, Jerry Jerome, our Life Insurance group executive,

estabHshed a new division of the United Insurance Company of
America that was located at our Century City offices with the
Teledyne Life Insurance Company. The new Group Division of
United took over most of the Group Life Insurance for Teledyne
companies, and also sought new group business outside of Tele-
dyne companies.
1975: Stock Buybacks Continue and Earnings

Per Share Soar
In 1975, we began to recover from the heavy losses we had experi-

enced in our casualty insurance business in 1 974. Henry continued
his stock buyback program and the average number of common
shares outstanding was reduced from approximately 22 million
to 16 million. This reduction, combined with the improvement in
the income of our consolidated companies, as well as of our life
and casualty insurance companies, resulted in earnings per share
of $6.09 compared to $1.31 in the previous year.

The income of our consolidated companies set a new record
of $82.6 million in this year, surpassing the previous record high
of $62.8 million that had been achieved in 1974. In our letter
to shareholders for that year we credited this improvement in
results to a combination of better cost control and increased pro-

ductivity, which improved our margins. We also had focused on
increasing our sales of higher-margin products, while deempha-
sizing our lower-margin lines.
144
The results of our life and casualty insurance operations

improved as well. A profit of $29.1 million was achieved, com-
pared to the previous year's loss of $31.3 million. These results
were achieved in spite of the fact that the casualty insurance
industry as a whole reported record losses in 1974, and indica-

tions were that 1975 industry losses would be worse.
In our third quarter of that year, our earnings of $25,133,000
were the highest for any quarter in the company's history, as were
the earnings per share of $1.61, which gave us a nine-month total
of $70,499,000, and $4.07.

At our May 14 annual meeting in Los Angeles, Henry spoke
of the company's performance, and addressed, in particular,
the medical malpractice problems of Argonaut. He emphasize

that those problems were being dealt with, and that as a result
of the actions being taken, the company's malpractice business
had a good chance of breaking even by the end of the year.
I also spoke on the company's operations and noted that 100
Teledyne companies had had record sales in 1974, and that 56
had record profits.
Energy resources were a major national problem at that time,
and the theme of our annual financial report for that year had
been nuclear energy. I made a few observations on the country's
energy situation and noted that dependence on a foreign source
of oil could ultimately lead to financial disaster. The first US
nuclear power reactor had been put on line in 1957, and, in the
17 years since that time, with 54 plants in operation, the nuclear
power industry had already had 210 years of reactor operation
experience and produced 350 million megawatts of electricity. I
also addressed the need for continued offshore exploration and

drilling in our coastal waters to further reduce dependence on
foreign oil. That was 30 years ago, and we are still essentially
facing the same problem.

Although the country's balance of trade had reportedly
145
Distant horce
improved at this time, the situation in the stainless steel indus-
try continued to worsen, in spite of voluntary agreements

between the US and foreign governments. Not since 1963 had
exports exceeded imports. At the end of 1974, there was a 3-
to-1 deficit. Imports accounted for 12 percent of the domestic
market. In 1975, the picture was even gloomier. The stainless
steel trade deficit was 6 to 1, with imports making up 20 per-
cent of the domestic market. Within the stainless steel business,
the wire rod imbalance, which was of particular importance to
Fred Kaufman's Eastern Group, had an import/export ratio of
160 to 1, with foreign suppliers providing 67 percent of the US
market. I pointed out two things to our managers in one of my
Intracom management newsletters that year: Don't rely on the
government for trade restriction assistance, and don't underes-
timate foreign competition.
In March, our Board of Directors declared a 3 percent com-
mon stock dividend payable on May 26 to shareholders of record
on March 31, 1975. In April, Henry announced his fifth buyback
offer: up to one million shares of our common stock at a price of
$18 per share. 3.6 million shares were tendered and purchased,
representing 19.6 percent of outstanding common stock.
In spite of our improving results, however, we had been

observing a pattern of reduced economic activity in the US for
six or seven months, and in February I issued a warning to that

effect to all our companies in my Intracom newsletter. I repeated
three cardinal actions, which I had mentioned many times before,
that should be taken immediately by company presidents. The
all
first was to cut back on all long-term commitments for materials

at fixed prices, as well as reviewing all purchasing commitments.
The second was to reduce all gross inventories to the bone. And
the last was to actively collect all past due and slow receivables,
and restrict shipments to all customers who were slow in paying
their accounts.
146
A very significant meeting of our executive staff took place at

Rancho Bernardo on July of that year, on Teledyne's 15th anni-
versary. At this meeting Henry introduced our new concept of
the "Teledyne Return," which I have described earlier, and I pre-
sented a detailed history of our financial system and its emphasis
on profits and net cash flow. I also presented a five-year financial
ranking of all Teledyne companies and all our Groups, based on
the concept of the Teledyne Return, and used it as an example of
how one can decide between choices of investment, and the deci-
sions facing company managers each week.
TRAP: Teledyne's Research Assistance Program
It was at this meeting that Henry and I also introduced a pro-

gram designated as TRAP, which stood for Teledyne Research
Assistance Program. Under the direction of Jack Hamilton, this
program was designed to promote cooperative research between
individual Teledyne companies and institutions of higher educa-
tion. Teledyne companies were encouraged to propose research

projects, on subjects of interest to them, to be carried out in
cooperation with selected universities. If approved, these proj-
ects were funded by the corporate office, with a general limit
of $35,000 per year for each project, with a three-year maxi-
mum. TRAP continued until 1996, a period of 20 years, during
which time 320 projects with an overall cost of $14.2 million
were carried out. Approximately 80 Teledyne companies and 112

US universities participated in the program, with six institutions
participating in 10 or more projects each. The American Gradu-

ate School of International Management in Phoenix, Arizona,
for example, participated in 40 projects with teams of gradu-
147
Distant Force
ate students conducting overseas marketing studies of interest to

Teledyne companies, and the Battelle Institute was involved in
16 studies covering a variety of technical subjects. Other stud-

ies involved UCLA, which participated in 10 projects, some of
which were studies of gingivitis disease for Water Pik; Carnegie
Mellon carried out 16 studies in the materials and microelec-

tronics fields; Penn State was involved in 13 projects related to
materials, computer technology and other technical disciplines;
and Harvey Mudd College had teams of senior students conduct

25 class projects concerning various problems of interest to Tele-
dyne companies.
TRAP was highly successful. It helped our companies develop
new products, new manufacturing processes and new markets.
A side benefit of the program was that it allowed us to identify
talented students and university personnel, who might become
valuable new employees, especially those interested in research.
Jack Hamilton was the program coordinator for most of its 20
years, and was ably assisted by Ethel Johns, who gathered and
maintained records on the program.
At the same time we started a matching gift program that
provided corporate funds to match charitable gifts by local com-
panies to charities of their choice. Berk Baker also introduced
our first issue of Teledyne Historian at this meeting. We planned
to produce it once each 10 years. The front pages of these issues
are shown in the pictorial section.
On Corporate Citizenship
We were also playing our part as good corporate citizens. Teledyne,

at this time, had two active programs for giving assistance to edu-
cation. One was our matching gifts for education program, which
was one of the most progressive matching gifts programs of any
148
corporation. The other was our contribution to the United Student

Aid Fund, which allowed student children of Teledyne employees
to receive education loans. At this point, we had extended 195
loans totaling $379,000 out of a total eligibility of $750,000.
This is an appropriate place to mention Vince dePoix, who

joined us at that time. Vince had been a classmate of ours at the
US Naval Academy, and had recently retired as the director of
the Defense Intelligence Agency at the rank of vice admiral. In
his long career in the US Navy, he had been selected to be the
first commanding officer of our first nuclear-powered aircraft
carrier, the Enterprise. He had held many other important jobs
in the fleet and in the Pentagon, including a two-year duty as
deputy director of engineering and management in the office of
the director of defense research and engineering, and a prior two-

year assignment at that office as assistant director of administra-
tion and management. We convinced him to join us and help run
Teledyne Wah Chang, where the US Navy's supply of zirconium
and hafnium was produced for the Navy's nuclear fleet. Since
Vince had not had anything to do with that Navy program when
he was on active service (that activity had been run by Admiral
Rickover), he was able to help us without any conflict of inter-
est. Vince was first my assistant on the corporate staff and was
later named president of Teledyne Wah Chang Albany, where he
replaced Steve Yih.
At this time, we were also involved in providing a number of
other products and services to the nuclear power industry, in addi-

tion to the exotic metals they needed. Teledyne Isotopes had been
active in this field since the beginning of the commercial nuclear
power era. One of our major services was the measurement of
background radiation levels at nuclear sites, before and after opera-
tions began, in order to determine the facility's radiological impact
149
Distant Force
on the environment. Our thermoluminescent dosimetry devices

monitored the radiation exposure of personnel, and we provided
precise analyses of nuclear fuel materials at all stages of their use.
These and many other highly technical services were provided to

major utilities throughout the United States.
Involvement in this field even extended back to the process

of enriching uranium for fuel use. Teledyne Cast Products was
awarded a contract to produce a large number of complex preci-
sion aluminum castings for the outer casings, or stators, of two
types of axial flow compressors used in the enrichment process.
The larger of these stators weighed approximately 3,000 pounds.
This program involved the pouring of some five million pounds of
special aluminum alloy. The goal of this program was to achieve
a 50 percent improvement in the output of enriched uranium.
Energy continued to be one of our nation's major concerns
during this decade, and we participated in many other energy-
related activities. Teledyne Controls, for example, produced the
first automatic engine health diagnostic system to help Consoli-
dated Edison of New York reduce the cost of operating 24 large
aircraft-type gas turbine engines at their Astoria generating sta-
tion. This computerized system, based on Teledyne Controls'
experience in producing monitoring systems for commercial jet
aircraft, was projected to save the company easily $500,000 a
year. More than half of these savings were expected to come

from lowering fuel consumption by increasing engine efficiency.
Meanwhile, Geotech was completing the first phase of a program

to provide a data acquisition and supervisory control system for
the Stingray natural gas pipeline, the largest offshore transmis-

sion system ever constructed in North America. It consisted of
230 miles of undersea pipeline, and two compressor stations, one
of which was located 100 miles from the Louisiana coastline on
an offshore platform.
In our core aviation and electronics activities, Teledyne MEC
150
was a major producer of traveling wave tubes (TWTs) for mili-
tary electronic countermeasure systems. MEC had also made a

breakthrough in TWT design that led to important reductions
in size, weight and power consumption for these devices, and
received a two-year Air Force contract to apply these advances to
high-power countermeasure systems.
In the previous year, Teledyne CAE had completed a three-
year development contract with the US Navy for the qualification
and acceptance of our CAE-developed turbojet engine to power

the Navy Harpoon missile, and this year we began building the
first of these engines under a 180-engine pilot contract. The short
life requirement of this engine, which weighed less than a hun-
dred pounds, allowed it to be built at low cost using unusual
design techniques. The same engine was entered in the Navy's
Tactical Sea-Launched Cruise missile competition, and a lon-
ger life version powered one entry in the competition for the US
Army's Variable Speed Training Target.
There was also a significant personnel change during the
year. Spencer Letts, who had been the company's general counsel
from the early days, had left in February of 1973 to enter private
practice. However, he had continued to be involved in many of
Teledyne's legal activities, and he rejoined our legal staff in this
year, reassuming his original position. Themis Michos continued
on as the secretary of the corporation.

Distant Force
1976: Another Record Year
We achieved another record year in 1976. Sales of our consoli-

dated companies reached $1.94 billion, compared to $1.71 bil-
lion in the previous year. Our insurance and finance operations

contributed revenue of $704 million and net income of $21 mil-
lion for overall totals of $2.6 billion and $135 million, respec-
tively. During the year, Jerry Jerome, Teledyne vice president
and treasurer, and chairman of Argonaut Insurance Company,
was named group executive of our Casualty Insurance Group of
companies which included Argonaut Insurance, Trinity Univer-
sal, Great Central, and Financial Indemnity, as well as Fireside
Thrift and Teledyne Life. This was in recognition of his out-
standing performance over the years in the management of our

financial operations.
Since net income rose to $135 million from $102 million in

1975, and with a further reduction in average common shares
outstanding from approximately 16.8 million to 12.3 million,
due to our continuing stock buyback program, earnings per
share reached $10.79 compared to $5.91 in the previous year.
Henry continued his buyback program with a sixth tender offer
to buy up to 1 million shares of our common stock at $40 per

share, closing on February 27. At previous year-end there were
13,611,930 shares of common stock outstanding. Approximately
2,500,000 shares were tendered and accepted in the new offer.
We also continued to decrease our interest expense through

repurchases of debt, including the redemption of approximately
$20 million of 3'/2 percent subordinated debentures that were
converted to common stock in April of that year. The deben-
tures were called at a price of $1,023, plus accrued inter-
est of $9.14 for each $1,000 debenture. The debentures were
convertible into 20.85 common shares per $1,000 debenture.
Approximately $16 million principal amount of debentures
152
Henry E. Singleton
J
George Roberts and Henry Singleton as room-
mates at the Naval Academy (1935-1937).
Henry Singleton and

George Roberts as
business partners at
Teledyne (1966-1993).
May 2, 1966 Teledyne listed and traded on the NYSE. At opening

i ceremonies (left to right) Berkley Baker, Teledyne; George Kozmetsky,
I
Teledyne director; Edward C. Gray, NYSE executive vice president;
:
Henry Singleton; Emil Roth, floor specialist in the stock; Arthur Rock,
; Teledyne director; and Claude Shannon, Teledyne director.
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Cathedral of
Milan where
Teledyne symbol
appears as part of
a mosaic.
$1,865,500
Teledyne, Inc.
Common Stock
Teledyne Historian published in 1970, 1980

Hayden, Stone & Co.
and 1985.
Teledyne's first published ad for

common stock May 2, 1961.
Teledyne Board of Directors April, 1987 (left to right) Art Rock, Henry Singleton, George
Roberts, George Kozmetsky, Fayez Sarofim.
Untrin Board of Directors October, 1998 (left to right) Reuben Hedlund, William E. Johnston,
James Annabel, George Roberts, Richard Vie, Jerry Jerome, Fayez Sarofim.
George Roberts presides at the Conquistadors del Cielo gathering in 1993.
Berkley Baker, Teledyne PR expert and 30 year employee with George Roberts.
George A. Roberts
were redeemed as a result of the company's call for redemption

of the bonds on March 5.
During the year, the technologies of two of our companies

were combined for the exploration of an offshore area known as
the Baltimore Canyon that lies off the east coast of the United
States. The area was surveyed by Teledyne Exploration to map

the subsea geologic strata of interest in the search for oil. Teledyne
Hastings Raydist provided their newest Raydist-76 radiolocation
system to determine the precise position of Teledyne Explora-
tion's survey ship as data was recorded during the four-month
survey. The proprietary data we developed from this 4,000-mile
survey was believed to be the most accurate ever produced for
this region. This information was of vital importance to oil pro-
duction companies when the area was put up for oil lease bids.
Teledyne Merla made a contribution to energy production with
its expanded engineering consulting and computer program ser-
vice to oil well operators. Offered on a worldwide basis, it pro-

vided information on using gas lift technology to increase well
productivity by injecting high-pressure gas which would bring
more oil to the surface, even on wells that had been considered
too depleted for economical production.
In the aviation field, Teledyne Controls designed and pro-
duced an experimental system for The Boeing Company that
eliminated many of the dials and readouts that crowded the
flight decks of modern commercial aircraft. The goal was to
improve flight safety, provide easier viewing of flight data and

reduce the flight crew workload, as well as reduce the cost and
weight of current systems. Two video monitors and two input
keyboards were used in the prototype system to provide all the
needed flight data.
Teledyne Ryan Aeronautical's remotely controlled Firebee

aerial targets were operated in Europe for the first time as a result
of a large contract from Aeronautica Macchi of Italy for our Fire-
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bee targets, support equipment and services. They were to be

used in support of NATO programs. At that date, approximately
6,000 Firebee targets had already been operational in US Army,
Air Force and Navy training programs,
Teledyne MECCA, producer of plastic products, instituted
a direct mail campaign to schools, churches and clubs to pro-
mote its "Color-Me Cup" products that allow the customers'
original artwork to be sealed inside the transparent double
walls of the cups.
Effective in January of 1976, we made a new Matching Gifts
to Education Program available to our employees, replacing a
previous program. Under this new program the company would

contribute two dollars for each one dollar of employee donation
up to $2,000, and dollar for dollar from $2,000 up to $5,000.
Many of our employees participated in this program, which

was administered by Bob Bell through the Teledyne Charitable
Trust Foundation.
We were all saddened by the fact that Charles Hastings, the
long-time president and founder of Hastings Raydist, passed
away in October. He had been preceded in death just months
earlier by his wife Mary. He and his wife had developed their
company together and perfected the Raydist precision radiolo-

cation system, which was state-of-the-art for many years. We
assigned Angelo Baldini to run the company, and placed it in
our Central Group. Carol Hastings Sanders, daughter of Mary

and Charles, later published a book titled The Story of Hastings-
Raydist which details their development of the Raydist system
and the founding of their company.
154
1977: New
Income Record and Expanded
Investment in Fortune 500 Companies
In 1977, each of our business segments again set new records for
net income. Our casualty insurance group was profitable for the
first time in several years. Consolidated sales were up approxi-
mately 14 percent over the previous year, with our specialty met-
als and industrial segments up 18 percent and 16 percent. Our
net income rose to $194 million, and sales from our consolidated
companies surpassed the $2 billion mark for the first time, at
$2.21 billion. We also continued to reduce our interest expense

by additional repurchases of our long-term debt. The number of
average common shares reached a new low of 11.8 million, and
earnings per share were $16.23.
This was the first year in which we adopted the equity
method of accounting for certain investments of our uncon-
solidated subsidiaries. As I mentioned earlier, Henry considered
equity accounting a nuisance, but it had become an accounting
requirement. The use of equity accounting on these investments
increased both our reported net income and earnings per share
amounts. If equity accounting had not been used, our net income
would have been $183.7 million or $15.35 per share, still signifi-
cant records.
We also began the development of our own in-house adver-

tising agency in this year, which ultimately resulted in saving the
corporation substantial sums. The credit for this development

goes to a very talented young lady by the name of Linda Meglin
who joined Teledyne Republic as their advertising manager in
1975, and stayed with the company for 20 years. She investi-
gated the requirements for becoming an accredited ad agency
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and found that it simply required having two clients. Republic

and Lakeland filled that requirement and legal steps were taken
to become accredited in Ohio.
When Angelo Baldini, group executive of the Central Group,
learned of these savings, he had Linda provide these services to
all 12 of his group companies. Ultimately, we created a separate
Teledyne company named TRL Productions (the initials of Tele-
dyne Republic Lakeland), with Linda as president.

TRL placed advertising for some 80 Teledyne companies
over the years, and saved a substantial amount of money. TRL
also produced collateral materials and organized exhibits for
many companies. As an example, in 1989, an ad produced by

TRL for Teledyne Post received an outstanding readership award
from Design News Magazine. The two-color, one-page ad titled
"Great Moments In Design" achieved a recall rating 20 percent-

age points higher than the average recall.
Over the years, a number of our technologies have had appli-
cation in the medical field. One of these products came from

Teledyne Avionics, which became the leading US manufacturer
of acoustic impedance meters used in the diagnosis of middle ear
disease. The technique doesn't require any voluntary response
from the patient, thus tests can easily be performed on infants
and small children. In another medical application, Teledyne
Philbrick logarithmic amplifiers were chosen by a major medi-
cal equipment manufacturer for use in their Computerized Axial
Tomography (CAT) scanners. 125 of these log amps were used
in each scanner.
Early in the year, we placed the first fully integrated, produc-
tion-scale resource recovery facility in the United States on stream
at Cockeysville, Maryland. This facility was designed and oper-
ated by Teledyne National to effectively dispose of some 1,500
156
tons of municipal waste each day, and at the same time to recover
tons of valuable and useful materials, as well as produce energy.
Various metals are separated out and sold, glass is processed into
aggregate for lightweight concrete blocks with improved insulat-
ing properties, and combustible materials are segregated for use
as industrial fuels. Pretty standard today, but pioneering in its
time frame.
Ryan Aeronautical received two more contracts for the
development of new supersonic target drones for the US Navy;
McCormick Selph was chosen to supply the explosively actuated
crew escape system for the modified Boeing 747, which carries
the Space Shuttle Orbiter during tests and ferrying operations;
and Teledyne Brown Engineering produced an immense 137-ton,
42-foot diameter fabricated steel structure that was installed at
the 150-foot level of the giant test stand used in testing the Shut-
tle's liquid hydrogen and liquid oxygen fuel tanks.
The question of hydrogen as a fuel emerged again with the

award by the Brookhaven National Laboratories to Teledyne
Continental Motors of a contract to study near-term applications
for a hydrogen-fueled vehicle. Here we are, over a quarter of a
century later, and these proven technologies are just being seri-
ously considered.
Teledyne Monarch Rubber participated with the Ford Motor
Company, providing some 8,000 engineering samples of rubber
parts to the Ford laboratory for the development of bushings and
engine mounts for various new car models. And Teledyne Inet was
chosen to provide an Uninterruptible Power System for the Social
Security Administration's Computer Teleprocessing Complex.
By the end of this year, Teledyne was the largest shareholder in
nine Fortune 500 corporations. Our insurance subsidiaries held
28 percent of Curtiss-Wright common stock, 22 percent of Lit-
ton, 22 percent of Brockway Glass, 20 percent of Walter Kidde,

20 percent of Reichhold Chemicals, 18 percent of National Can,
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and smaller amounts of five other companies. Most of these stocks

were held by our Argonaut and Unicoa subsidiaries. We actually
held enough shares in six of these corporations to effectively have

control over them, but Henry never exercised that capability. He
never even attempted to seek a position on the boards of those
companies. For a long time there was considerable speculation
in the investment community that Henry was planning to take
over some of these large corporations, and this may have caused
unease some managements. In fact, however, he went out of
in
his way to assure those managements, as well as the investment
community, that he had no such intentions. Even when we were

Curtiss-Wright's largest shareholder in 1981, during the take-
over attempts by Kennecott, a Curtiss-Wright spokesman said
of Singleton, "He's been absolutely scrupulous in staying out of
our affairs and, specifically, in avoiding getting involved in the
Kennecott matter."^
That many didn't believe him was an indication of how little
they knew of Henry's integrity and determination to follow his

own course. And, of course, as the ensuing history has shown,
he held to his word.
1978: Further Records in Sales and Income
Each of our business segments, except consumer products, set new

records in sales and net income in 1978. We ended the year with a
net income of $248.5 million, with earnings per share of $19.13.
Sales of our consolidated companies had reached $2.44 billion.
Of these sales, $562 million were sales as contractor and as sub-

contractor to the United States government, primarily by our
aviation and electronics segment. International sales had reached
LA Herald Exaniitrer, }anuary 5, 1981.
158
$190 million in this year. Industrial products accounted for 37

percent of our revenues, specialty metals 29 percent, aviation and
electronics 22 percent, and consumer 12 percent. Net income
tracked these results closely with industrial products providing
41 percent, specialty metals 31 percent, aviation and electronics
20 percent, and consumer products 8 percent.
In this year, the use of equity accounting for certain invest-
ments of our insurance and finance companies resulted in a
decrease of our net income of $16.9 million, or $1.31 per share.

Our insurance and finance group, however, showed an especially
significant gain in this year, with revenues of $779 million and
net income of $73 million.
Some significant events in our manufacturing operations
included the pouring of the first gun mount casting for the US
Navy's Phalanx Close-In Weapon System by Teledyne Cast
Products. Readco, meanwhile, also completed what was believed
to be the largest coil winder ever produced. It was designed to
wind the baseball type, superconductive magnet coils for use in
fusion research at the Lawrence Livermore Laboratory in Cali-

fornia. If that brings up an image in your mind of the way your
mother used to wind her knitting yarn, consider this: Winding
a single coil took about nine months, and the 20-foot diam-
eter finished coil weighed about 172,000 pounds. The winding
machine itself weighed about a third of a million pounds and
was 27 feet high.
As a member Hughes Helicopter team that produced

of the
the Advanced Attack Helicopter for the US Army, Ryan Aero-
nautical began production of the total airframe structure. The
Army planned to begin full production in June 1980 with an
initial need for over 500 aircraft.
Teledyne Controls was providing various US air carriers with

the well-known ACARS electronic systems that enabled them to
use a new automatic digital communications network. It elimi-
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nates up to 70 percent of air-ground voice communications traf-

fic, reducing flight crew workload and lowering costs. As Henry
had predicted, the world would soon be digital, even replacing
analog voice communications in some situations.
It may seem far afield from our usual aerospace and military
business, but we even applied our technologies in a program to
help protect the Greek Parthenon and other historic sites in and
around Athens. Teledyne Geotech's meteorological instruments
were used by the Greek government in studies of air pollution
from automobiles and industry, and its effect on the deterioration

of the marble in these irreplaceable structures. Our instruments
helped determine where the pollutants came from, how they
were dispersed or concentrated, and what concentrations were
involved. Data from these instruments and air quality monitors
were fed into a Geotech digital recording system and stored for
later analysis.
We also ordered our third oil-drilling rig in this year. It was

one of a patented design series of mat-supported, jack-up plat-
forms specially built for use in our Teledyne Movible Offshore

operations. As I mentioned earlier, we didn't anticipate the oil field
glut and slowdown in oil production that would follow shortly.

Meanwhile, Teledyne Engineering Services was helping to
build one of the largest liquefied natural gas processing plants
in the world. Located on the northern tip of Africa, the facility's
pipelines stretched some 800 miles into the Sahara desert to the
source of supply. We provided engineering analysis of the plant's
critical pipes and support systems, which had to be designed to
operate at cryogenic temperatures.
A lesser-known and most unusual Teledyne activity started
within our Teledyne Packard Bell operation was participation
in the US Job Corps program. Teledyne Economic Development
operated a number of these centers, which offered courses of
study in automotive skills, culinary arts, welding and electron-
160
ics, as well as other vocational studies and some basic high

school subjects. We opened two new centers in this year: one in
Tucson that accommodated 250 students, and one in Jackson-

ville, Florida, that also had an enrollment of 250 students with
150 living at the facility. This brought our total to six centers
around the country. Young people entered these centers with
low reading comprehension, poor mathematical skills and no
vocational training. Studies made in that year showed that more
than 93 percent of the graduates who were available for place-
ment got jobs, went on for further schooling, or joined one of
the armed forces.
1979: Growth in Spite of Renewed Energy

Shortages
A second round of energy shortages developed in this year follow-

ing the Iranian revolution that had just occurred. All of our busi-
ness segments continued to show significant growth in 1979, with
the exception of our consumer product lines, which remained the
same. Total consolidated sales reached $2.7 billion, an 11 per-
cent increase, with industrial products returning $936 million,
specialty metals $841 million, aviation and electronics $643 mil-
lion, and consumer products $285 million. Government market-
ing activities remained at a significant level and grew modestly
to $548 million, with international sales also showing significant
growth to $230 million.
Our insurance and finance operations returned an additional

$880 million for a combined total revenue of approximately
$3.6 billion. Walter Lenhard, chairman and president of Unicoa
Corporation, announced the election of Andy Kelley as president
and CEO of the United Insurance Company in April of 1979.
161
Distant hone
Andv had been executive vice president since 1976, and had been
with United for 22 years. Jerry Jerome was also elected chairman
of the board of United.
Walter retained his chairmanship and presidency of Unicoa
Corporation, the holding company that owned United Insurance,
Pvramid Insurance and General Life Insurance of Wisconsin,

and continued to be extremely active in the affairs and prog-
ress of United itself. Throughout his career he represented United
Insurance and the industry as an important senior spokesman for
Home Service insurers.
Home Service Insurance was designed to help low-income
persons who could not afford large lump sum semi-annual or
annual insurance premium payments, and who otherwise would
not be able to have any insurance at all. Insurance company
employees visited policyholders at their homes and collected their
small premium payments each week. The system had a number

of problems, ranging from the high cost of employing people to
make these collections, to the risks of their being robbed while
on their rounds. To respond to these problems we changed to a
monthly collection schedule, calling the policies ""Monthly Debit
Ordinary." We lost some policyholders when this happened, but

it improved the system somewhat. We eventually discontinued
this type of policy, and today home service insurance is virtually
non-existent.
In March of this year Teledyne paid an 8.5 percent stock div-
idend. There were approximately 13,500,000 shares of common
stock outstanding at that time. During the year. Dun and Brad-
street changed our credit rating to 5A1 — their highest rating.
1979 was a very active year for our engine operations. Tele-
dyne CAE delivered its 1,000th turbojet engine for the US Navy's
anti-ship Harpoon Missile, just two days short of four years since
the first engine was delivered in 1975. A remarkable example of
advanced turbine engine technology, this instant-start power-
162
plant weighed less than 100 pounds and delivered 660 pounds
of thrust.
At the lower end of the power spectrum, our Teledyne Con-
tinental Motors Industrial Products Division introduced a new,
two-cylinder, liquid-cooled engine with a 25-horsepower maxi-
mum rating for the construction, industrial and turf mainte-
nance industries, and Teledyne Wisconsin Motors introduced a
new line of single- and twin-cylinder air-cooled diesel engines in
the same power range for similar applications.
Meanwhile, Teledyne Continental Motors Aircraft Products

Division entered into the development of a new, high-perfor-
mance, low-fuel-consumption, four-cylinder aircraft engine with
Rolls Royce Motors Ltd. of England. Teledyne manufactured

these engines at their Mobile, Alabama, facility for marketing
in the US, Canada and South America. They were also built by
Rolls Royce, Ltd. in England for marketing in Europe and else-
where under a licensing agreement with Teledyne.
As I'm writing about engines, I'm reminded of the fact that
while Teledyne at this point was just 20 years old, many of our
component companies were far older. On June 9 of this year, Tele-
dyne Wisconsin Motor celebrated its 70th anniversary. The com-
pany set an early milestone in 1921 when a world speed record
of 170 miles per hour was set by the "Wisconsin Special," a race
car powered by one of the company's engines. And if that doesn't
go back far enough, in just two more years, in 1981, Teledyne
McKay, our manufacturer of welding consumables, celebrated its
100th anniversary! But the oldest of all was Wirz, the precursor
company of Teledyne Packaging, which was founded in 1836!
There were milestones in our military and space markets

as well. Teledyne Systems began delivery of its new TACNAV
Tactical Navigation Set to the US Navy for use in its antisub-
marine warfare helicopters. Several foreign countries, including

West Germany, England, Australia, Italy, Japan and Taiwan, all
163
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expressed interest in variants of this system for their own needs.

Teledyne MEC also was providing three critical components for
the US Navy's electronic ship defense system designed to alert

ships to the threat of missile attack. The new system was the
first multi-beam electronically scanned electronic warfare system
used on a Navy ship.
And, expanding on Henry's original interest in and develop-

ment of inertial guidance systems, Teledyne Systems Company
made its first delivery of nine units of the new NASA Standard
High Accuracy Inertial Reference System for spacecraft. This
Dry-Tuned-Rotor Inertial Reference Unit, called DRIRU II, was
designed to provide a standardized system to meet the demand-
ing requirements of the space programs of the 1980s. It was a
self-contained, strap-down, three-axis, dual-redundant, attitude
rate-sensing unit for use where precision pointing accuracy, high
reliability and low power consumption were needed. It went on to
play an important part in many of the country's space activities.
Its first use was in controlling the launch and insertion into circu-
lar orbit of the 5,200-pound Solar Maximum Mission Observa-
tory in 1980. Over the next two years, seven scientific instruments
monitored solar flares, which can cause radio blackouts, disrupt
satellite communications and affect the earth's weather.
We were all very excited and pleased with the performance

of the components and systems we had built for NASA's space
programs. They were helping to provide mankind's first close-up
look at worlds so far away they were little more than blurred dots
to ail but the most powerful telescopes. After an 18-month, 400-
million-mile journey to Jupiter, the NASA Voyager I space probe
began sending back spectacular pictures of Jupiter's surface and
its moons in this year. All of the scientific data and the pictures
we received on earth were processed and formatted for trans-
mission by eight large-scale digital hybrid microcircuits made by
Teledyne Microelectronics. These microcircuits, the largest we
164
had produced to date, provided a GG percent reduction in cost
over earlier designs, twice the memory capacity, nine times the
radiation shielding and a 51 percent reduction in weight. The
Voyager probe was then already on its way to Saturn, nearly a
billion miles from earth. Voyager II, with the same complement
of our microprocessors, was scheduled to follow on that same
path, leaving in July of that year.
Meanwhile, the Pioneer II space probe, powered by four SNAP
19 RTGs built by Teledyne Energy Systems, had already made the
historic first flyby exploration of the planet Saturn. These Tele-
dyne generators provided all the electrical power for the science
instruments, communications and control systems aboard the

craft. Originally scheduled only for a scientific encounter with
Jupiter, it was decided to extend the mission to Saturn because
of the exceptionally long service life the generators exhibited. At

its flyby of Saturn in September of 1979, nearly seven years after
the generators had been fueled, the actual remaining power level
being produced was 117 watts, more than 30 percent better than
the design requirements.
During that year, incidentally, I had nominated Henry Single-
ton for membership in the National Academy of Engineering,

and he was elected. Election to the Academy is the highest pro-
fessional distinction that can be conferred on an engineer, and
honors those who have made important contributions to engi-
neering theory and practice, or who have demonstrated unusual
accomplishments in pioneering new and developing fields of
technology. Henry certainly fit several of those criteria, and his
election was certainly well deserved.
165
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International Marketing
As I mentioned earlier, marketing was a major theme at the man-

agers meeting we held at La Quinta, California, in 1974, and
I presented a plan at that meeting that I had developed for our
international marketing efforts. I hired Leo Killen, whom I had
known when he was an executive of North American Rockwell,
to head up our international office in Washington, DC, and super-
vise and provide export assistance. He later relocated his office to
Geneva, Switzerland. Russ Kiernan, among his many contribu-
tions to Teledyne's success, at one point headed our international
marketing efforts from the corporate office. He had this to say
about our international activities:
As the decade of the 1960s came to a close, and

in the early years of the 1970s, Henry recognized the
advantages of developing international markets for the
company's products and services. A few companies had
already been engaged in foreign markets and had even
established limited overseas manufacturing facilities.
To meet these growing operations, Teledyne's Interna-
tional Marketing organization was established in the
early 1970s with offices in Geneva, Switzerland, and

Singapore. Other corporate international marketing
offices were soon established in other countries to func-
tion as the eyes and ears for all Teledyne companies
who might have interest in overseas activities. They
proved very effective in providing much needed insight
into the cultures and unique marketing and business
methods of foreign countries.
In order to enhance the international awareness of
other Teledyne product lines, we also conducted market-
ing trade shows in selected locations, under the super-
166
vision of Berkley Baker's staff at the corporate office.
These shows proved very effective and gave Teledyne

companies a better understanding of the advantages of
working through the International Marketing Offices.
It was often necessary for home-based Teledyne
companies to send their sales or technical personnel to
assist in negotiations. The international office staff sup-

ported these activities in many ways, such as providing
interpreter services whenever there was a language bar-
rier. In my region of activity, Japan and China, this was
a very vital service.
Will Strong was in charge of our international activities in

South America, Asia and the Indian subcontinent from 1973 to
1991. He recalls the uniqueness of Teledyne's office in Japan.
This office operated as a classic trading company, in the sense
that it bought and sold Teledyne products for its own account,
and was not simply a service office for the Teledyne companies.
Peter Katsuno, who 25 years earlier had joined others to estab-
lish a successful trading company in Japan called Tokyo Sales, was
about ready to retire when he learned of the opportunity at Tele-
dyne. What he thought might be a few more years added to his
business career finally became more than 20 years with Teledyne.
"It took us a couple of years to get this operation up to speed,"
he reported, "but it became very successful with sales of about
$60 million annually in our peak years. We accomplished this
with a maximum staff of about 45. A few of these were account-

ing and technical people and secretarial staff, but most were sales
persons who spent almost all their time in the field calling on
Japanese customers.
"We represented many Teledyne companies including sell-
ing columbium and niobium to the Japanese nuclear industry for
Wah Chang, and AUvac. We also made many sales for Electron-
167
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ics, Systems, Geotech, Relays, Analytical Instruments, and Ryan

as well as for Water Pik, Packard Bell, Olson Electronics and
Teledyne Total Power engines."
Overall international sales of Teledyne products and services
through all of our Corporate International Offices were in the
$750 to $800 million range annually.
Telling the World About Teledyne

We also took a very important international marketing step in
August of 1979 by carrying out a Trade Mission to Korea, the
Republic of China and Japan. Our purpose was to create an

awareness of Teledyne in those countries, so that our companies
could go into those markets recognized as part of a substantial,
progressive, highly regarded, technologically capable corpora-
tion. The mission included technical seminars, a film presenta-
tion, brochures and a physical exhibit of our products. Berkley
Baker and his staff, Jim McGowan of our Ryan organization
and Linda Meglin, head of our in-house agency, TRL Produc-
tions, produced the impressive array of printed, audio-visual
and exhibit materials that formed the core of the presentations.
The exhibit of products and supporting graphic materials occu-
pied about 6,000 square feet of space, and an 88-page brochure,
titled "Teledyne Profile," was printed in Chinese, Korean, Japa-
nese and English versions. A 20-minute audio-visual presenta-
tion provided a broad survey of Teledyne's products, services and
technologies.
Russ Kiernan and his three Asian CIO offices and Barry Shil-
lito, president of Teledyne Ryan Aeronautical, and his staff, as
well as representatives of many of our operating companies, also

contributed greatly to the success of the mission.
In December, we presented our trade show to the Republic of
168
China Over 10,000 people attended, including Premier

in Taipei.
Sun, Minister Li and many other ranking government, military

and industrial leaders. We were told by the US Trade Center that
it was the largest single-corporation trade show ever to visit those
countries at that time.
This effort was also taken in Europe on several occasions as
a corollary to our participation in the Paris Air Show and those
in England.
Because of increased activity in the People's Republic of
China, undoubtedly helped by our Far East Trade Mission, a
CIO office was established in Hong Kong, managed by Norman
Choy, reporting to Tom Hanley, who was our vice president of
Teledyne International Marketing in Singapore. Will Strong,
head of our Latin America international operations, established
a new CIO in Rio de Janeiro during this year, and a new sub-
sidiary, Teledyne do Brasil Comercio e Industria Ltda., was also
formed to provide a legal umbrella for the operation of that CIO.
It was legally authorized to carry out both commercial and man-
ufacturing activities for any Teledyne company that wanted to
establish some kind of direct operations in Brazil.

In their January 7, 1980 issue, Forbes magazine published
the "32nd Annual Report on American Industry," which rated
the performance of over 1,000 companies for the five-year period
from 1975 through the last reported quarter of 1979. Teledyne
ranked 12th in profitability, 15th in growth and sixth in mar-
ket performance in the entire group. In a sub group of compa-
nies called "Multi-Companies," Teledyne was first in return
on equity, first in return on total capital, second in growth in
earnings per share, and 26th in growth in consolidated sales.

In another sub group called "Electronics and Electrical Equip-
ment," Teledyne was frst in return on equity, first in growth in
earnings per share, third in return on total capital, and 19th in

five-year growth of sales. This performance was certainly out-
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standing by any criteria, but particularly so in a field of more

than 1,000 major companies. We were also particularly proud
of the performance of our management and accounting staffs in
being able to release our 1979 earnings to the press by January

8, and to have our annual financial report to shareholders in the
mail by January 30.
On a final sad note, near the end of our second decade. Bob
Jackson, after many active years as president and director of Tele-
dyne Ryan Aeronautical, and later as a director on the Teledyne
board, passed away in 1979 after a lengthy period of declining
health. His contributions to Teledyne over the years were greatly
appreciated, and I felt that I had lost a good friend.

Beginning Our Third Decade
We had emerged from our second decade in business as one of

America's leading and most successful corporations, and we
looked forward optimistically toward the third. In 1980, our
consolidated companies achieved $2.9 billion in sales, with a net
income of $344 million and earnings per share of $15.24. The
chart on page 170 shows how remarkably we were able to con-
tinue the virtually uninterrupted growth that we had achieved
in the early acquisition years, and had maintained through the
following years of internal growth. Our industrial segment sales,
in spite of a labor strike at certain locations and the gradually

approaching economic recession, had exceeded one billion dol-
lars, and our insurance and finance companies came close to that
with revenue of $994 million. Our second quarter sales of $765.6

million and net income of $61 million were the best of any quarter
so far in our history. In 1961, our sales had been $4.5 million with
an income of $58,000, and a net income per share of $0.01!
1980: Our Virtually Uninterrupted Growth

Continues
In Henry's continuing buyback program, we issued approxi-

mately $486 million face amount of 10 percent debentures in
exchange for 3,037,285 shares of our common stock in this year.
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This transaction was the only significant issuance of long-term

debt by the company in the previous five years.
Our specialty metals companies achieved sales of $899 mil-
lion, aviation and electronics $727 million, and consumer prod-

ucts returned $284 million. These results were achieved through
our system of allowing many diverse companies to operate essen-
tially autonomously in serving many different markets. It was in

this year, incidentally, that my own former company, Teledyne
Vasco, celebrated its 70th anniversary. Fred Kaufman, our East-
ern Group executive and president of Teledyne Vasco, held an
open house for employees and their families, and some 1,100
enjoyed plant tours.
International sales had increased substantially to $333 mil-
lion, and sales to the United States government amounted to
$673 million. These activities brought us a total revenue of
$3.9 billion, and a net income of $409 million.
Energy and the environment, national concerns that were
often at odds with one another, continued to be areas in which
we contributed considerable creativity and innovation, generating
both sales and income for our company. One activity in which
we contributed solutions to both fields was our instrumentation
of the 2,250,000-kilowatt Navajo power generating facility in
Arizona. Teledyne Analytical Instruments provided monitoring

equipment that helped this facility burn 24,000 tons of low sulfur
coal each day without discharging pollutants into the environ-
ment. Environmental considerations comprised nearly one-third
of the $200 million cost of that facility. Our oil-in-water analyz-
ers, capable of detecting oil in the parts-per-million range, also
continuously monitored the effluent collected from floor drains
and sump pumps, and assured that the facility's water treatment
system reduced the concentration to 4 parts per million or less
before the water was discharged.

Teledyne Laars attacked the energy conservation problem
172
with the introduction of a new hne of high-efficiency pool heat-

ers that used a newly engineered finned copper heat exchanger.
At 78 percent efficiency, the new line was about 8 percent more
efficient than the industry standard and exceeded the 75 percent
efficiency standard that the State of California mandated to go
into effect in 1982.
In other areas, Teledyne Ryan was awarded a significant
contract by the US Air Force to develop the High Altitude High
Speed Target called the Firebolt. It was to be capable of flying
at altitudes between 35,000 and 100,000 feet at speeds from
Mach 1 to four times the speed of sound. It was in this year, inci-
dentally, that we divided the original Teledyne Ryan Aeronautical

into two separate companies, in view of the growing diversity of
their operations. The original Ryan Aeronautical continued in its
field of aeronautical engineering, while their greatly expanding

activities in the electronics field became Teledyne Ryan Electron-
ics. Roy Fields, who has been with the company for 26 years, left
his position as executive vice president of Teledyne Ryan Aero-

nautical to become group executive of the Pacific Group which
included both companies. Steve McCarter became president of
Teledyne Ryan Aeronautical, and Hudson Drake, who had been
vice president and general manager of electronics programs at
Ryan, was made president of Teledyne Ryan Electronics.

Speaking of electronics, Hudson recalls an interesting story
about Henry that took place at a profit plan meeting at the cor-
porate offices, early in his career, when he was still general man-
ager of Ryan's electronics operation. Hudson had brought in the
company's newly developed Doppler navigation system to dem-
onstrate. He was on the floor of the conference room, he said,
plugging in various power supplies, making interconnections,
and programming in data for a demonstration, when suddenly he
realized that Henry Singleton was on his hands and knees along-
side him helping to get the system set up and running. "I was
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very surprised. Here was a brilliant man with a doctorate in elec-
trical who undoubtedly knew more about electronics

engineering
than would ever learn, helping me put this system together. He
I
was very interested in the technology and what we were doing,

and very kind," Hudson said. "From a leadership standpoint,
that was really a lesson for me." Henry never really lost his inter-
est in hands-on experience with the kind of advanced electronic

systems that had been the start of his company.
In the consumer product area, Teledyne Water Pik was very
active in this year, with the introduction of a new travel ver-
sion of its oral hygiene device, a steamer version of its shower

massage, and an electric massager that provides both heat and
vibratory massage.Gene Rouse, who had spent 20 years in the
development of Water Pik products, and the management of the
company as president, announced his retirement in August of
this year. Dave Mutchler, our group executive for the Consumer
Group that included our Acoustic Research and Olson Electron-
ics, as well as Water Pik, took over the management of Teledyne
Water Pik as president. He also continued in his role as group
executive. Dave had joined Teledyne in 1976 as head of Teledyne
Acoustic Research. He was another alumnus of Litton Industries
where he had been president of their Electron Tube Division.
One of the original Teledyne personalities, Teck Wilson, was
vice president of the Systems Company for many years, and even-
tually accepted the assignment to open the Brussels, Belgium,
Corporate International Office, which he operated until 1976.
He then returned to become president of Teledyne Ryan. Teck
announced his retirement on September 1, 1980, and moved to
South Carolina, where he continued to serve us as a consultant to
several Teledyne companies. He made a substantial contribution
to Teledyne's success throughout those years, and we were sorry

to see him go.
174
Another event of considerable interest to me involved a person

who did not work directly for Teledyne but contributed greatly
to our company. An independent organization known as Mate-

rials and Methods had been working exclusively for Teledyne
in the area of metals and materials research and development.

Dr. Earl Parker, who headed the company, was awarded the
1979 National Medal of Science by President Carter at a White
House ceremony on January 14. Dr. Parker's medal was granted
for research that involved modern materials development and for
his work on tough, strong, new alloys. Having known Earl for
over 25 years, I was very pleased to see him receive this honor.
I was very shocked and saddened to learn, as I disembarked

from a TWA flight in Pittsburgh in October of that year, that Bob
Bellhad just succumbed to a heart attack at our corporate offices.
Bob had served as chairman and president of Packard Bell until
1968 when it became part of Teledyne, and then served as vice
president and chairman of the Teledyne Charitable Trust Founda-
tion for many years. He had a long history of service to the com-
munity in Los Angeles, in addition to his work at Teledyne. Bob
had received many honors in his career and served many phil-
anthropic and charitable organizations. His passing was widely

regretted throughout the community as well as at Teledyne.
1981: Sales Exceed $3 Billion in Spite of Recession
By the end of 1980, inflation had accelerated to such a degree

that the Federal Reserve abruptly decreased the money supply
growth rate. The result was the 1981-82 recession and a very
sluggish economy. In an October issue of Intracom, under the

heading "Orders Are Hard to Find," I quoted Albert Sommers,
one of my favorite economists with The Conference Board, who
175
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said, "Recession appears to have begun; its onset, after a suit-
able study, will probably be placed in August. The evidence of
its beginning has suddenly become rather abundant." I also men-

tioned a speech that Jack Kemp had given before the Economic
Club in Detroit, Michigan, which put some historical perspective
on the current economic conditions, and I enclosed a copy of
his speech with the hitracom. I then cautioned our managers:
"Together, these two items should cause each of us to be very
cautious with our capital expenditures, commitments to buy, and
employment levels."
In spite of this, the consolidated companies continued to
achieve good results. Net income was $421.9 million compared

to $343.8 million in 1980, and sales increased from $2.93 bil-
lion to $3.24 billion. Industrial products once again led the way
by a substantial margin in both sales and net income, with the
specialty metals and aviation and electronics segments holding a
strong second and third place.
Sales to the US Government grew significantly to $787.5 mil-
lion, with the aviation and electronics segment accounting for

most of those sales, undoubtedly stimulated by the continuing
arms race between the US and the Soviet Union, and our coun-
try's space programs. International sales also grew once again to
$353.4 million.
Sales and income of consolidated companies were the best
of any third quarter in our history. Return on sales of 8.2 per-
cent was significantly ahead of the previous year, and was the
best of any quarter in that year. Inventories dropped from the
second quarter, but receivables were up in dollars and as a per-
centage of quarterly sales. Revenue from our insurance and
finance operations contributed $1.1 billion for a total revenue
of $4.34 billion.
We further upgraded our specialty metals production capa-
bilities in 1983 with the installation of a new high-precision
176
rotary forging machine at Teledyne Allvac. It was the first
machine of its size and capabilities in the US devoted to the pro-

cessing of high-temperature, corrosion resistant and titanium
alloys. It enabled us to supply products with superior metal-
lurgical properties for applications that require high levels of
precision and reliability, such as jet engines, gas turbines, and

a variety of products in the nuclear, biomedical, chemical and
petrochemical industries. The new $20 million forging facil-
ity represented the single largest expenditure in the company's
expansion and modernization program at the time. It increased
the total size of the facilities at Monroe and Bakers, North Car-
olina, by 80 percent, adding 265,000 square feet, and creating
some 500 new jobs.
In our effort to spread the word about Teledyne products to

the international community, 21 of our companies participated
in the Paris Air Show of 1983. My old alma mater, Teledyne
Vasco, introduced its new VascoMax T-250 at the show in that
year. Unlike other standard maraging steels, VascoMax T-250
contained no cobalt, a strategic material that many nations,

including the United States, had to obtain from foreign sources.
In addition to being cobalt free, the new alloy used less molyb-
denum than the standard 250 grade. This steel, which had prop-
erties consistent with cobalt-bearing 250 alloys, was used in
high-strength structural parts and in tooling applications, for

which we provided such mill products as billet, bar, forgings,
plate and sheet. This alloy was later awarded the prestigious IR-
100 award by Industrial Research and Development magazine,
as one of the "100 Most Significant New Technical Products" of
that year.
We continued to be active in various petroleum industry busi-
nesses as well. It is somewhat ironic that oil platforms, scattered
offshore in many parts of the world producing energy for the

world, had special energy needs of their own. One of these was
177
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providing electricity for the electrical systems on these remote

installations, which were often unmanned. Teledyne Energy Sys-
tems was selected to provide thermoelectric generators to provide
electrical power for instrumentation and telecommunications
equipment on 53 of these unmanned oil production platforms in
the Arabian Gulf. Each installation required four or five Energy

Systems Model 5T Telan thermoelectric generators, plus storage
batteries, gas and electrical distribution panels, and other sup-
port equipment. Thermoelectric generators convert heat energy
directly into electricity without moving parts, providing an ideal,
virtually maintenance-free electrical power source for remote

locations such as these.
To keep up with the rapidly growing demand for geophysical
exploration services in the search for new sources of oil, Tele-
dyne Exploration also added a new geophysical survey ship, the
Casey Chouest, to its fleet in this year and placed an order for
another that was delivered later in the year. This expanded our
fleet from four in 1980 to six in this year. These vessels, rang-
ing in length from 165 to 210 feet, were outfitted to our specifi-
cations for state-of-the-art seismic surveying. On average, each
of these vessels surveyed more than 10,000 miles of sea bottom
each year, to provide precisely located seismic profiles for the oil
production industry.
Teledyne Brown Engineering, meanwhile, was producing gas
centrifuge service module assemblies for the US Department of
Energy. These modules are used in conjunction with a centrifuge
to enrich uranium hexafluoride for use as a fuel in nuclear power
generating stations. The 144 service module assemblies and 24
aisle modules we delivered in this year equipped approximately
one-half of the first Department of Energy enrichment plant built
in Piketon, Ohio.
Other space, military and government programs continued to
provide us with substantial business opportunities. The success-
178
ful launching and flawless landing of the Space Shuttle Columbia

in that year was a source of pride to the many Teledyne people
whose work contributed to that success.
This one program is an example of how deeply Teledyne
contributed to our country's space successes. Teledyne Micro-
some 6,000 hybrid microcircuits. Vasco's
electronics provided
VascoMax T250 alloy was used in the hydraulic controls oper-
ating the Shuttle's fuel flow mechanism. Wah Chang's colum-
bium alloy was used in the nozzles of its thruster engines.
AeroCal designed and provided the cryogenic hot gas seals for
the main engines. Thermatics supplied specially insulated wires

and cables for the airframe and instrumentation wiring. Semi-
conductor provided an analog-digital converter, and Electron-
ics, a transmitter. Lewisburg command antennas were aboard,
as were pressure transducers by Taber and castings by PICCO.
McCormick-Selph supplied the external tank range safety sys-
tem and seat escape cartridges, and several Camera Systems
cameras filmed the separation of the solid-state boosters from
the Shuttle. Relays provided their TO-5 transistor relays for the
navigation system and the portable life support system used

by the astronauts, and Kinetics supplied high-amperage power
transfer switches.
By this time, Teledyne Systems Company's digital computers
had been used to control a total of 73 straight successful launches
since its first use aboard a Delta rocket in 1973. Thirty-four of
those launches had been aboard Delta vehicles and 39 aboard
the Centaur rocket, and it went on to be used in many more
unmanned and manned launches.
Teledyne Brown Engineering played a multiple role, including
design work for the solid rocket boosters and integration of the
onboard equipment packages. Teledyne Brown, more
scientific
than any other Teledyne company, has contributed innumer-

able products and services for NASA space programs for over 50
179
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years, and continues to do so today as part of the new Teledyne

Technologies organization.
During the year, Teledyne Continental Motors, General
Products Division, became one of three companies awarded con-
tracts by the US Army to each build 11 prototype High Mobility
Multipurpose Wheeled Vehicles (HMMWV) in the development
of the vehicle to replace several of the Army's older vehicles. It
became, as is well known today, the HUMVEE.

One of our valued executives, Barry Shillito, announced that
he would be resigning as a Teledyne vice president in January
of that year. Barry had joined Teledyne in 1973 after serving in
the Nixon administration in various important posts, including
Assistant Secretary of Defense. From 1973 to 1976 he was presi-
dent of Teledyne Ryan, and for four years previous to his resigna-
tion he served as a corporate vice president in our Washington,
DC, office. He contributed his considerable expertise during 1979
in the planning and execution of our Far East Trade Mission. We
were very pleased that he agreed to continue to work with us on
a part-time basis from his Washington office to assist our compa-
nies in marketing, governmental and international matters.
Russ Kiernan, chairman of Teledyne International Market-
ing, also announced his intention to resign in February 1981. He
had taken on many demanding tasks for Teledyne over the years
as company president and group executive. He became respon-
sible for our Far East CIOs in the early '70s. Many of his inter-
esting reminiscences of his years with Teledyne were mentioned
earlier in this document. Henry and I both deeply appreciated his
many contributions to Teledyne's success.
180
1982: The Worsening Economy Impacts Sales

and Income
In 1982, the nation's economy was worsening, and by the end of

the second quarter of this year it was quite apparent that these
worsening conditions were having an adverse effect on the sales
and earnings of many of our product hnes, particularly specialty

metals, industrial and aircraft engines, and consumer products.
Our earnings from oil service activities were also lower. The
decline in equity in net income of our unconsolidated subsidiar-
ies was due primarily to deterioration in the underwriting results
of the casualty insurance companies as well as the inclusion, in
our 1981 results, of the $15.6 million of equity in Curtiss-Wright
Corporation's gain on sale of its Dorr-Oliver subsidiary and its
interest in the Kennecott Corporation.

Net income for the year declined to $269.6 million from
$421.9 million in the previous year. Consolidated sales fell to
$2.86 billion from $3.24 billion in 1981. Sales from our insur-
ance and finance operations remained basically the same at
$1.18 billion. Total revenues fell to $4.04 billion, from $4.34 bil-
lion in the previous year.
It is interesting to note, however, that sales in the aviation
and electronics segment, which Henry had originally chosen to
be the backbone of his new company, did not decline. Teledyne

MEC received an Excellence Award from the US Navy in that
year for its performance in the Aegis shipboard defense system,
and continued to supply its TWT electron tubes for that pro-
gram. Teledyne Systems had developed a new airborne military

computer for the US Air Force, which combined light weight,
compactness and low power consumption, and it successfully
passed verification testing in that year.

Ryan Aeronautical was then conducting target operations for
181
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the Navy and Air Force at overseas locations, and received a con-
tract for the operation and maintenance of the Remotely Piloted

Vehicle Facility at Wallace Air Station in the Philippines. Under
a separate contract it performed target operations at the Army's
White Sands Missile Range in New Mexico. Ryan had already
developed a complete family of aerial targets, both subsonic and
supersonic, and had produced over 6,300 of its famous Firebee
aircraft. At that time, Firebees had flown more than 30,000
operational missions.
Ryan's Electronics division was also awarded a new contract
by the Navy to provide a complete, self-contained navigation sys-
tem, including a Doppler radar, computer display, and interface

units for the EA-6A Tactical Jammer Aircraft. Ryan's AN/APN
200 Doppler radar was recognized as the world's most accurate
navigational radar and was used by all the military services, as
well as NATO. Under a contract awarded by Boeing in that year,
they designed and produced optical transducers to transmit data

on aircraft control surface positions to the cockpit displays via
fiber optic cables. This reduced weight substantially and pro-

tected the information being transmitted from electrical interfer-
ence. That seems pretty straightforward now, but this was being
done over 25 years ago.
It was in September of this year that Claude Ryan, one of the
really great pioneers in early aviation, passed away at age 84. For
more detailed information on this outstanding man and his con-
tributions to the art of flight, refer back to my earlier discussion
of the Ryan organization.
182
1983: Sales Approach $3 Billion Again as the

Economy Recovers
During the 1981-82 recession, the US metals industry under-

went a more severe and longer downturn than most other US
industries. The economy had largely recovered by the
overall
end of 1983 and continued to grow for almost seven years, but
the general metals industry did not. Our own metals operations,
however, because of the unique and very specialized products we
made, did not suffer quite as much.
The performance of our consolidated companies continued to
show modest gains, led by further increases in sales of our aviation
and electronics segment. Sales to the US Government increased
from $993.6 million in the previous year to $1,110.7 million in
this year. Total sales of our consolidated companies increased

from $2.86 billion in the previous year to $2.98 billion, and net
income rose from $269.6 million to $304.6 million. Our insur-
ance and finance operations contributed sales of $1.22 billion for

total revenue of $4.20 billion.
During the second quarter of this year, Henry continued his
program of repurchasing the company's common stock, and we

acquired 287,000 shares on the open market, reducing outstand-
ing shares to 20,370,531.
NASA and the military continued to be important custom-
ers for our products. Teledyne Controls was chosen by NASA

to develop a data acquisition and control system, named DACS,
which would permit NASA to simulate the thermal and mechani-
cal stresses experienced by full-scale aircraft and spacecraft dur-
ing high-speed flight and reentry.
Ryan Aeronautical delivered its first Apache helicopter fuse-
lage to Hughes Helicopter, Inc. ahead of schedule in this year.
The company had participated in the development and testing
183
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of the Apache more than 10 years, and a production run of

for
more than 500 was planned. The production program got off
to a shaky start, however, and the company was having a dif-
ficult time delivering one hand-built airframe a month while the
schedule called for three. Hudson Drake was transferred from
his position as president of Ryan Electronics and made presi-
dent of Ryan Aeronautical in 1984 when the program was just
in its earliest stages. Hudson determined that the problem was
a bottleneck at the Center Mate Assembly Station and decided a
second station needed to be built. "I had to visit Henry and ask
for $5 million to build a second station on the assembly floor,"
Hudson said, "at a time when the program was already some
$65 million in the hole in cash! To his credit, Henry OK'd the
request, and with the new station we got on schedule with deliv-
eries. We reached a maximum rate of 12 airframes per month,
and delivered over 1,000 shipsets before I left corporate. This
was a very profitable program for Teledyne, and Henry's very,
very impressive decision certainly paid off for the company, as
well as the country. The Apache became, and still is, the pre-
mier attack helicopter in the world."
Another Ryan milestone was the successful completion of five
missions in a series of seven scheduled flight tests of the Ryan Fire-
bolt supersonic target. In its fourth flight, the Firebolt cruised at
Mach 4, four times the speed of sound, at an altitude of 100,000
feet. No other target had ever flown higher and faster under simi-
lar conditions. Twenty more test flights were scheduled after the
completion of the first seven.
When Hudson had taken over presidency of Ryan Aeronau-
tical in 1984, however, the company's other profitable subsonic
Firebee aerial targets were beginning to show their age, and
he decided that future applications for other unmanned aerial
systems were overdue for investigation and development. As Bill
Wagner explained in his 1992 book Fireflies and Other UAVs,
184
"He [Hudson] took a long range approach to the problem and

initiated a two year study to develop an affordable vehicle that
would be applicable in military, governmental and civilian
applications. The result was the company-sponsored develop-
ment of the Model 410 UAV. Design criteria were modest ini-
tial cost, low operational cost, simple maintenance, all-weather
day/night operation, conventional landing/takeoff, long range
and endurance, high service ceiling and large load carrying
capability."
Perhaps the peak of Ryan Aeronautical's work in the UAV field
was the development and initial manufacture of the RQ-A UAV,
later named the Global Hawk. This state-of-the-art unmanned
aerial vehicle is now well known for its present highly success-
ful mission, carrying out vital, long-endurance surveillance and
intelligence flights in Afghanistan and Iraq. It can fly at altitudes
up to 30,000 feet and has an endurance of more than 30 hours.

(Teledyne Ryan Aeronautical was acquired from Allegheny
Teledyne, Inc., in 2004, by the Northrop Corporation. In an
April 4, 2005, press release issued by Northrop, the Global Hawk
is credited with having achieved 4,000 combat flight hours on
March 23, 2004, and has achieved more than 6,500 total flight
hours accumulated by multiple aircraft.)
It's difficult to remember now, but a great part of our early
history took place during the so-called "Cold War," and even
into the '80s there was still great governmental concern about
the transfer of our advanced technologies to countries that were

unfriendly to us. In my October 1983 Intracom, I reminded all
our managers of a program called Operation Exodus that was

being carried out by the US Customs Service to restrict the flow
of high technology data to certain countries. Detentions and sei-
zures had risen markedly at that time on shipments of products

or goods that were considered suspicious. We were required to
comply with all necessary export licenses and other documenta-
185
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tion in regard to these types of shipments, and I reminded our

companies of those requirements.
Just a few months later, Teledyne Geotech, under group exec-
utive Jack Hamilton and company president Gordon Breland,
teamed up with our Washington office, the US Department of
Commerce and US Customs agents to stop an illegal shipment to
Russia, which put two Colorado men in jail. Joe Schirard, vice
president of contracting and administration, became suspicious
of an order for one of our seismometers used to detect and mea-
sure nuclear explosions. He told the Colorado firm they would
need an export license or an end-use certificate. They didn't
know what an end-use certificate was, but quickly sent an export
license. Their unfamiliarity with an end-use certificate and the
speed with which they acquired an export license aroused his
suspicions, so he sent the license to Rick Wilkins in our Wash-
ington office, who took it to the Department of Commerce. It
turned out to be a forgery. To make a long story short, we were

told to ship the item, which was intercepted by Customs, who
then substituted a dummy container of the same weight, filled
with cement. It was traced through West Germany, and then on

to Russia. Case closed.
In more mundane activities, Teledyne Water Pik scheduled a
network prime time advertising campaign to introduce its new
line of oral hygiene and personal care products. It was the larg-
est and most comprehensive national campaign in the history of
the Water Pik brand, and continued the use of celebrities such
as Jonathan Winters, Pearl Bailey, Glenn Ford, Carol Channing
and many others who contributed their famous smiles to the
campaign.
186
1984: Major Stock Buyback and Further Growth

in Sales and Income
Sales rose from $2.98 billion in 1983 to $3.49 billion in 1984,
and net income increased substantially from $305 million in the
previous year to $574 million in 1984. Once again, our avia-

tion and electronics operations made substantial sales gains over
the previous year, rising from $1.10 billion to $1.49 billion, with
industrial segment sales reaching $994 million, and specialty met-
als increasing to $731 million. Consumer products also showed a
modest increase to $283 million.
The results of our casualty insurance subsidiaries decreased

significantly in this year, as a result of economic conditions that
affected the entire casualty insurance industry. In spite of this,
overall sales for our insurance and finance operations increased
from $1.22 billion to $1.36 billion in this year.
In 1984, Henry continued his aggressive stock buyback pro-
gram with his eighth and final major tender offer that acquired
8,661,053 shares of common stock at $200 per share, reducing
the number of shares outstanding at year-end to 20,370,531.

This purchase was financed through internally generated funds
and through bank loans of $800 million. We repaid $300 mil-
lion of these notes in the same year. The internally generated
funds were obtained from sales of marketable securities by our

consolidated companies, and from repayment of advances and
return of amounts invested in our unconsolidated subsidiaries.
This increased our net income per share by approximately $6.54
for this year.
Our very active Teledyne Wah Chang operations achieved
another milestone in this year with the casting of a 1,900-pound

vanadium ingot that measured 10.5 inches in diameter and 105
inches in length. Previous ingots had averaged about 850 pounds.
187
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The ability to produce high-purity ingots in larger sizes improved

yield and product quality, as well as more timely delivery to our
customers. Our vanadium metal was used at that time in fusion
energy research, and also as a component in a vanadium-gallium

alloy to produce superconducting wire by our patented process.
For the first time in its history, Teledyne Ryan Aeronautical

became involved in a program where the end product was not for
an aircraft. The company was chosen by Lockheed Missiles and

Space Company to participate in the development and production
phase of the Navy's Trident II missile program, a submarine-based
weapons system. The contract covered the production, test and
documentation of two systems. One was an Analog Data Proces-
sor and the other a Digital Data Processor, both for use in test-
ing the Trident Missile electronic systems. The Lockheed Missiles

and Space Company also chose Teledyne Systems to develop and
manufacture two computers for each MILSTAR communications
satellite, used for data handling and spacecraft management.
I haven't mentioned much about our semiconductor opera-
tions, but, I assure you, they were quietly going along developing
state-of-the-art products that were used in literally hundreds of
critical space, military, commercial and consumer applications,
and providing steady cash flow for the corporation in the process.
Teledyne Semiconductor made several additions to its CMOS

product line. One important one was the its new dual power
MOSFET driver integrated circuits used in switch mode power
supplies, motion control systems, alarm drivers and incandes-
cent lamp drivers. Two other proprietary devices, an integrated
circuit and an analog-to-digital converter, were also brought to
market.
We entered a new business in this year with the formation
of a company, which we called Teledyne Monolithic Microwave,
to work in the rapidly growing gallium arsenide field. They pro-
duced microwave products such as microwave amplifiers, oscil-
188
lators, receivers, transmitters and repeaters for military use in
electronic defense, communications and radar. Also in the field
of semiconductor and hybrid microcircuit production, Teledyne

TAG introduced an enhanced version of its HAS-1000 automatic
hybrid assembly equipment. TAG was a leading manufacturer
of automated production machinery for the semiconductor and
hybrid industries.
Teledyne Grystalonics, our manufacturer of high-reliability
semiconductors and silicon transistors, received certification of
its facility for compliance with the new JAN-S requirement for
space-level transistors from the Defense Electronic Supply Genter
in 1984. Grystalonics was one of only two US transistor manu-
facturers to receive this facility approval, which qualified it to bid
on many important programs.

Government procurement was a moving target, and we had to
be constantly aware of new requirements that affected our terms

and pricing on government contracts. The Defense Appropriations
Bill for Fiscal Year 1984 included a provision requiring contractors
(and subcontractors) to provide a written guarantee on each sys-
tem and each component, which was not an easy thing to do since
many of our products were on the cutting edge of technology, and

pushing the state-of-the-art in many cases. And the equipments
often were used under the most hostile conditions.
This new requirement specified that the seller must bear the
cost of repair, replacement or re-procurement in the event of fail-
ure to meet the government's performance requirements specifi-

cally delineated in the production contract or other agreement.
This new provision applied to all contracts awarded after March

8, 1984.
There was no time limit on these obligations and hence no
limit on the extent of the contractor's financial liability. It was
not clear how a contractor could reasonably be expected to war-
rant the performance specifications on a weapons system that
189
Distant Force
had never been built before. I warned our companies that they
must carefully consider this new liability when negotiating and
pricing contracts of this sort.
It was with the deepest regret that I learned that Angelo
Baldini had succumbed to a heart attack in Reading, Pennsyl-
vania, in January of this year. Angie was our Teledyne Central

Group executive and president of Teledyne Avionics. He had
been executive vice president and treasurer of Automated Spe-
cialties (later renamed Teledyne Avionics) when we acquired it
in 1965. He was one of our first and finest group executives and
was responsible for 15 companies, including those of our Lake
and Northern Groups. As I said when I announced his passing in
an Intracom: "His touch was golden, fair and kind." We missed

him greatly.
Our First Spin-Off
1984 was also the year in which we made the first spin-off of one
of our major units, US Ecology. Teledyne Isotopes, which we had
acquired in 1967, specialized in the detection and measurement
of radioactive nuclear isotopes, down to trace amounts. Among
their many products and services, they did radiation measure-
ments for environmental purposes around nuclear power plants,
and also collected and disposed of radioactive waste from hospi-
tals and laboratories that used these materials.
At that time nuclear waste disposal looked like it was going to
be a really big business, and there wasn't any public opposition to
it. Larry Kulp, who was president of Teledyne Isotopes, wanted

to get deeper into that business and had learned of a company,
named Continental American Royalty, that was for sale. They
owned a potash mine in Carlsbad, New Mexico, as well as some
oil and gas properties and also had a 30 percent interest in a
190
company called Nuclear Engineering Company, or NECO. Larry

felt that the deep mines this company owned would be ideal for
storage of these waste materials, and Nuclear Engineering Com-
pany would complement his operations, so we acquired the com-
pany in 1972. We sold the potash mines in 1974 and bought
the remaining shares of NECO, and thus became involved in the
business of nuclear waste disposal, operating burial sites in Ken-

tucky, Illinois, Florida, Nevada and Washington state. Eventu-
ally this was renamed US Ecology. It also operated a number of
sites for the disposal of hazardous chemical wastes.
At about this time, the public was starting to become very
concerned about the safety of burying these materials. It became
an emotional issue, and there was a great deal of opposition by
environmentalists and other groups. Henry and I decided that
there would be never-ending problems in this business and that
no auditor could ever determine what the eventual cost of these
operations would be, no matter how safely the materials were
stored. Despite these problems, US Ecology did about $100 mil-
lion in sales in its best year.
In keeping with Henry's philosophy that the shareholders
should be given the opportunity to decide whether or not they
wanted to be in this kind of a business, we decided to spin these
operations off to them under the new name American Ecology.
Thus shareholders could opt to sell their interests in that business
without selling their Teledyne shares, if they wished. In the first
quarter of this year, we distributed one share of American Ecol-

ogy stock to our shareholders for each seven shares of Teledyne
common stock.
Bill Prachar, one of our young corporate attorneys, had been

the principal attorney on all the nuclear cases we had had, so
he was very familiar with all the problems that this kind of an
operation faced. Henry convinced Bill that it would be a good
opportunity for him to accept the presidency of American Ecol-
191
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ogy, and he did. Bill did a brilliant job of running that company
for many years, dealing with the opposition of environmentalists
and local governments and the many legal issues it faced.
1985: Reduced Overall Sales, Led by Slump in

Aviation and Electronics Sales
Our sales declined in all segments of our operations in 1985,

with a major decrease in our aviation and electronics segment.
This resulted in a 6.8 percent overall decrease, compared to a
17.3 percent increase in 1984, and a 4 percent increase in 1983.
Aviation and electronics, however, continued to lead with a reve-
nue of $1,368 billion, compared to $931 million for our industrial
operations, $693 million for specialty metals and $265 million
for consumer products. Total revenue of our consolidated opera-
tions was $3,256 billion.
Net income before taxes for each sector were $118 million
for aviation and electronics, $83 million for industrial products,
$78 million for specialty metals and $38 million for consumer
products, with a total operating profit of $317 million. In spite
of a slight decrease in revenue from consumer products, this area
posted an increase in income before taxes compared to the pre-

vious year's results. Sales of our insurance and finance opera-
tions did increase to $1,461 billion, but this was not sufficient
to counterbalance the declines in our consolidated companies.

Net income for 1985 was $546.4 million. At year-end there were
11,710,000 common shares outstanding, and net income per
share was $46.66.
192
1985: Technical Achievements
During the year, Teledyne Brown received one of the first con-
tracts awarded by NASA for the development of a permanently
manned US Space Station. The two-year engineering contract was
to develop the design requirements and configuration of a micro-
gravity and materials processing facility for use aboard the sta-
tion. The module was to be used for material science experiments
including crystal growth, solidification of alloys and composites,

and containerless processing. In addition to this major contract,
Brown also received contracts from the Defense Department, the
Air Force and the Army for other programs.
Teledyne Microelectronics had recently perfected a custom
hybrid microcircuit packaging system that could withstand up
to 250 degree Celsius temperatures. This high-temperature capa-
bility is vital in many aerospace, military, energy and industrial
applications. Their new technology was already being used in
major US Air Force strategic missile applications at this time.
Teledyne MEC had also been chosen by the US Air Force

to design and develop new technologies and manufacturing
improvements for the production of traveling wave tubes used
in many sophisticated electronic countermeasure systems. This
effort was part of the Air Force's technology modernization pro-
gram in partnership with individual contractors.
Columbium was another of the exotic metals produced at
Wah Chang. They had developed the capability of producing this
metal in ultra-high-purity form. This was used in particle accel-
erators, huge machines used in research into the basic nature
of matter at the subatomic level. These accelerators depend on

superconductive magnets and radio frequency cavities, which in
turn require the columbium metal we produced. Our new ultra-
pure material permitted these machines to produce a much stron-
ger magnetic field, with lower power consumption.
193
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One of our company's earliest executives, Allen Orbuch, was

elected vice president of Teledyne, Inc. by the Board of Directors
in this year. Allen had joined the company in 1965 after nine
years at Litton, where he had known Henry. He had served as

president of Teledyne Systems for many years, and later became
one of our group executives, a position he had held since 1973.
The employees of Teledyne Stillman, manufacturers of
tubular heating elements for small appliances, water heaters
and other applications, led by president Karl Schaefer, success-
fully decertified the International Association of Machinists

and Aerospace Workers with a 198-to-l vote, but it wasn't easy.
The company had to courageously persevere through intimidat-
ing and sometimes violent experiences to successfully conclude
a 14-month strike.

expenses on research and development contracts and lower mar-

gins. The 10 percent debenture debt we had incurred in our
acquisition of 8,661,053 shares of our common stock was com-
pletely retired in 1986, with a final payment of $97.5 million.
This had been preceded by payments of $402.5 million in 1985
and $300 million in 1984.
This was a year of significant management realignments in

our company. At the annual meeting in April, Henry announced
that he was giving up his title of chief executive officer and that
I would assume that title in my position of president.
addition to
He would remain chairman of the board. He told the sharehold-
ers that the title change was in recognition of my leadership since
I joined the company as president in 1966. He reiterated those
comments in the only Intracom that he ever wrote.

Henry was 69 at the time of the announcement. He stressed
that the realignment would not mark any major change in Tele-
dyne's management style, and told shareholders that he antici-
pated that we would continue to work together as a team, as we

had for the previous 20 years. Indeed, we did work very closely
together for the next 10 years.

Claude Shannon also retired from the Board of Directors
at this time, and was elected director emeritus in honor of his
26 years of invaluable service to the company's shareholders.

Dr. Shannon, who was a member of the company's original
board, was Donner Professor of Science Emeritus at the Mas-
sachusetts Institute of Technology. He received many honors in
his distinguished career as an educator and scientist. He had a
master's degree in electrical engineering and a doctorate in math-
ematics from MIT. Before joining the faculty of MIT he was a
scientist at Bell Laboratories, where he wrote "A Mathematical
Theory of Communication," a treatise that earned him recogni-
tion as the "Father of Information Theory." He had retired as an

active member of the MIT faculty in 1979.
195
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Fayez Sarofim, who was the founder, chairman, president

and chief executive officer of his investment firm, Fayez Sarofim
& Company, in Houston, Texas, was elected to the board at that
same meeting. Fayez was one of our early investors and a major
shareholder, and in later years became an important advisor to
Henry in investment matters. As I mentioned earlier, he had been

introduced to Henry in the very early years of the corporation by
Arthur Rock, who had been a classmate of Sarofim's.
Bob Gary, one of my long-time metallurgical colleagues,
retired in this year after 40 years of service at Teledyne Vasco. Bob
had joined Vasco in 1946 as a metallurgical engineer and worked
in numerous management and metallurgical capacities during his
career. In 1965 he was named vice president, technical director

and finally assistant to the president. One of his career highlights
was the 1962 publication of the book Tool Steels, which he co-
authored with me. He had recently completed a revised edition
of the book, which was recognized as the definitive work in the
tool steel industry.

A final change of a more somber note was the passing away
of William W. Shannon (1917-1986) in May 1986. Bill had a dis-
tinguished association with Teledyne that began in 1964 when

the company he had founded, Servo-Mechanisms, was acquired
by Teledyne, and he was made a vice president of Teledyne. He
and Henry had a very close association, and as I mentioned ear-
lier, Henry was deeply affected by his passing.
Another event of particular significance in 1986 was that we

distributed all the outstanding common stock of the Argonaut
Group to our shareholders on September 30. (I'll discuss the
rationale behind this in detail later under the subhead "Insur-
ance Gompany Spin-offs.")
This was also the year in which a record-breaking, non-stop

circumnavigation of the earth was made by a Teledyne Continen-
tal Motors-powered aircraft named the Voyager. This 26,178-
196
mile uninterrupted journey was accomplished without refueling

in 216 hours by the flying team of Dick Rutan and Jeana Yeager,
and created another milestone in aviation history in which Tele-
dyne companies participated. The unconventional one-of-kind

aircraft, designed by Dick's brother Burt Rutan, was powered
by two liquid-cooled Teledyne Continental engines, one located
in the nose and one in the rear in a pusher configuration. This
combination allowed either engine or both to be operated at any
time. Both were used when power was needed for takeoff and
to climb to higher altitudes to avoid weather. Just one engine
was used in cruising mode to conserve fuel. Teledyne's liquid-
cooled engines were chosen because they were designed to offer
less cooling drag than air-cooled engines.
The engines were the smallest and newest of Teledyne's liq-
uid-cooled aircraft engine line. These 200-cubic-inch, 110-horse-

power, fuel-injected, four-cylinder models were chosen because of
their compactness, low cooling drag, high power-to-weight ratio
and exceptionally low fuel consumption, as well as their extreme
reliability. The patented liquid cooling design of this engine is
one of many technical innovations Teledyne Continental Motors

made. The engine can be seen at the Smithsonian Institution.
Unfortunately, 1986 was also the year in which the Space
Shuttle Challenger exploded, raising questions about continu-
ing the US manned space exploration program. Global fallout
from the Chernobyl nuclear reactor accident, which occurred on
April 25, was also of great concern at this time. Teledyne Iso-
topes was called upon to monitor the distribution of radioac-
tive products in samples of air, water, milk and vegetation taken
throughout the US. The first positive results were found in sam-
ples from nuclear utility customers from Texas to the East Coast,
taken in the week ending May 12. The values found were easily
detectable, but were well below levels potentially harmful in milk
for human consumption.
197
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In a corporation of our size it was perhaps inevitable that
we should experience a few tragedies. One of these occurred in

December of this year. Six of our employees were killed in the
crash of one of our corporate aircraft. Four were employees of

Teledyne Post and the other two were the pilot and copilot of the
plane. These gentlemen were on trip from the Midwest to visit
one of their company's suppliers in Pittsfield, Massachusetts,

when it crashed near Pittsfield. While it is impossible to replace
human life, Joe D'Annunzio, president of Teledyne Post, estab-
lished a memorial fund for their families. We were all saddened
by the event.
A more upbeat subject in this year was Teledyne's gift of
some 595,000 aerial photographs, produced by Teledyne Geo-

tronics, to the University of California, Santa Barbara. The gift
was appraised at a value of $1.8 million. UCSB was chosen as the
recipient because of its unique facility for housing the collection

and its resources for cataloguing it for public use. UCSB is well
known for its predominant status as the largest repository for
such material of any academic library. The gift was presented to

the Chancellor of the university by the Teledyne Charitable Trust
Foundation in June of this year.
1987: Another Flat Year
In 1987, our operating companies were doing what they did best,
pursuing sales and profits in their fields, within the constraints

of current economic conditions. Our overall sales remained rel-
atively unchanged. Sales increases in our specialty metals and

consumer segments were offset by a significant further decrease
in our industrial segment results. Our operating profit from the

aviation and electronics segment included gains before tax of
$9.4 million on the sale of property and equipment. Sales to the
198
US Government and international sales also decreased, as did the

sales of our insurance and finance businesses, which went from
$1.31 billion in 1986 to $1.07 billion in 1987.
Our net income for this year of $377.2 million, or $32.25 per
share, compared to the previous year's net income of $238.3 mil-
lion, or $20.35 per share, included gains on the sales of invest-
ments and an after-tax credit.
We were always very proud of the promptness and efficiency

with which we were able to close our books and report to our
shareholders. This year, our report for 1986 was available for
distribution on January 21, only 19 days after the closing of our

fiscal year on January 2. This was a real tribute to the hard work
of all our companies and our corporate staff, and the reporting
system developed by Charlie Rinsch and Jerry Jerome, under the
leadership of George Farinsky.
The Board of Directors announced on January 23 that an
initial cash dividend of $1.00 per common share would be paid
on February 25 of that year. It was the first cash dividend paid
in the company's history. Additional cash dividends of $1.00 per
share would be paid in each quarter for an annual rate of $4.00
per share.
1987: Planning for Our Retirements and

Choosing New Leaders
Flenry was 70 and I was 68 in this year, and a number of our

key directors and company managers were over 65. The question
of successors, and in fact the whole question of just what would
happen to Teledyne in the coming years, was widely surmised.
In an article in the June 16, 1987, issue of Financial World, the
possibilities discussed ranged from spinning off large parts of the
199
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company or breaking it up, to taking Teledyne private or selling
out. Henry's response was: "We're not particularly persuaded by

quick temporary gains. We'd rather get something permanent.
And it takes time. If there's anybody who wants us to do some-
thing real fast that's going to be astonishing in terms of increased
earnings or something, I don't know how to satisfy such desires."
When pressed about spin-offs being a good way to boost share-
holder value when acquisitions are too pricey, he replied: "You're

thinking in the short term, I'm in the long term. So I wouldn't do
anything like that for a temporary rise in the price of the stock.
"You know, there are companies that will sell one division
and buy another because today this division generally sports
a low multiple and the one they're buying has a high multiple.
And they think that may rub off on the whole company. That
absolutely turns me off. The whole concept is repulsive. We
don't do things like that. We look at the economic long term
possibilities."
At the same time, I was also actively looking at people within

the organization who might be candidates to fill top management
positions. We were hiring a lot of younger managers and giving
them considerable responsibilities to see how they could handle
things, and I could see a number who could handle my job.
In this year, Teledyne Energy Systems completed what was

believed to be the world's largest radioisotope thermoelectric
generator (RTG) for the US Department of Energy's Oak Ridge
National Laboratory. Fueled by three capsules of Strontium-90
fluoride fuel, the device produced 660 watts of electrical power at
28 volts DC. Because of the great length of time that certain radio-
isotopes produce heat, these generators can be designed to produce
electricity for 20 years or more without refueling. This unit was
designed to produce at least 500 watts of power continuously for
200
approximately eight years. We built this device in support of the
Defense Waste Byproducts Utilization Program, to develop secure

and reliable power sources for critical defense needs, as well as to
demonstrate practical use for nuclear waste products.

Nuclear science was also used by Teledyne Isotopes to make
measurements of radon concentrations more than 6,000 New
in
Jersey homes in one of the largest and most comprehensive radon

studies ever undertaken. Radon is a naturally occurring radio-
active gas that is associated with certain geologic formations.

The study was to determine the correlation between radon gas
concentrations, certain types of home construction, and the inci-
dence of lung cancer.
Twenty of our companies exhibited their products and ser-
vices at this year's Paris Air Show in June. Lindbergh's Spirit of

St. Louis aircraft, built by the forerunner company of the Ryan
Aeronautical Company, and the Rutan Voyager aircraft that
circled the earth non-stop, powered by Teledyne Continental
engines, were used as the centerpiece of our exhibit. An exact
duplicate of the Continental liquid-cooled engine used on the
Voyager flight was officially installed, in a black tie reception, at
the Smithsonian National Air and Space Museum in Washing-
ton, DC, on December 14.
In an unusual honor for a commercial company, Teledyne

Ryan Aeronautical received Congressional recognition in its 65th
consecutive year of operations in San Diego, California. The Con-
gressional Record containing the tribute was published in April.
In other activities, Teledyne Geotech was installing a mod-

ern microearthquake telemetry system in Ghana, Teledyne Merla
was offering oil and gas well producers a unique patented and
cost-effective method of sealing leaks in pipelines, and Teledyne
Controls was selected to provide two series of avionic systems
for the US Air Force Douglas C-17 airlifter aircraft, which was
scheduled to go into production in 1988.
201
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We made many things that were very big and many things
that were highly precise, but doing both at the same time was a
real challenge. Teledyne Pipe had that task in producing launch

tube sections for the Peacekeeping Missile Launching and Han-
dling System. These huge tube sections, which were 98.7 inches
in diameter and of various lengths, could not deviate from a per-
fect circle by more than plus or minus 60/lOOOth of an inch. In
addition, the tubes could not deviate from a true circle by more
than 45/lOOOths of an inch in any 30-degree segment. Teledyne
Pipe was an approved fabricator for the Westinghouse Electric
Corporation and the US Air Force. They produced a trial order
that successfully met these requirements, and the company was
given an order for 75 more of them.
TRAP, our research assistance program, reached its 10th
anniversary, with Teledyne companies having participated in
over 100 research projects with more than 50 educational insti-
tutions in the US and Canada. TRAP funding gave our compa-

nies a cost-effective means of developing new technologies and
processes, and gave educational institutions access to equipment
and materials that would normally have been beyond their reach.
(Refer to full story on page 147.)
In our continuing effort to remind our employees of the

corporation's ethical policies, rules and principles of conduct,
we new revised ethics booklet. Our previous booklet
issued a
applied only to US domiciled companies. The revised booklet rep-
resented current thinking to make it applicable to non-domestic
companies and activities and to improve the clarity and readabil-
ity of the text. The new version was sent in 1987 to all companies
for distribution to and reading by all employees. Each company
received a compliance card, to be signed by each employee, certi-
fying that the material had been read. Our insurance companies
had their own code of conduct publication.
To help our companies keep abreast of the latest technologi-
202
cal innovations that might be of use in their businesses, and to
encourage cross-poUination of ideas between our companies, in
July of this year I announced in an Intracom that Tecl< Wilson

had become director of the newly formed Teledyne Technical
Advisory Board. The first issue of a Technology Newsletter^ that
was to be published regularly by this board, was distributed in
January 1988.
1988: Facing New Problems
This year began, unfortunately, with the first of a series of legal

problems that were to occupy us for a number of years, involv-
ing actions that were brought against certain of our companies
by the US Government regarding our ethical conduct on vari-
ous contracts. Rather than discuss these events piecemeal as they
occurred, I have summarized them later in this book under the
heading "The Whistle-Blower Era" on page 213.
Needless to say, Henry and I were both appalled at these
developments. We had always conducted our business on a

strictly ethical basis, and made every effort to instill a strong
sense of ethics in all our managers and executives. In addition to

the ethical considerations, these matters posed very serious prob-
lems for our manufacturing operations, since about one-third of
our sales were to the US Government.
To further add to our woes of that year, our property insurance
companies incurred large losses due to Hurricane Hugo and other
weather related damage in the southwest region of the country.
However, 1988 was our peak year in terms of both revenue
and profit. Teledyne was the 105th largest US corporation, in
terms of sales, at that time."^
''Forbes, September 27, 1993.
203
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Our financial report for 1988 was available for distribution
on January 21, only 19 days after the closing of our fiscal year
on January 2. Revenues in this year increased by $352 million to
$4.6 billion, after the steady decrease we had experienced since
1984. This was due primarily to an increase of $143.9 million in
sales of our specialty metals and an increase of $108.8 million in
our aviation and electronics segment. Our operating profit had

increased by $27.3 million in 1988 and $157.3 million in 1987
to $392 million, for a return on sales of close to 9 percent and a
return on equity of more than 19 percent. The 1988 increase was

due to improved operating results of our specialty metals compa-
nies, which experienced strong demand for their products in the
transportation, capital equipment and aerospace industries. This

was in spite of the last two years of recession that the country
had experienced. Also we had gained tighter control of our labor
costs and productivity was improved in the years 1984-86, and
again strongly in 1988.
In our insurance operations, the improved performance of
our accident and health segments were partially offset by lower
results in our life and liability insurance segments. In this year,
Henry sold off Teledyne's interests in Brockway, Kidde and Reich-
hold Chemicals for a gain of some $300 million. And, during the
year, we paid four cash dividends of $1.00 per common share in
the months of March, May, August and November.
In March of this year, I announced that the reorganization
that we had been planning was now fully in place, and that now
all companies in Teledyne Industries would report to one of our
two senior vice presidents. Bill Rutledge or Hudson Drake. Bill
and Hudson had worked with me for several months on this
plan. The new organization combined companies that had simi-

lar technologies, markets and opportunities. Bill Rutledge would
head the specialty metals and manufacturing companies in the
Eastern Group, and Hudson would head the aerospace and elec-
204
tronics companies in the Pacific Group, a division that worked

out very well.
Gordon Bean, who had left us for a short time because of a
heart problem, had recovered and rejoined us as corporate trea-
surer at the end of the year and was put in charge of the company's
retirement plan. With the departure of Charlie Rinsch in January
to his assignment as president of Argonaut Insurance, we under-
took a complete reorganization of the treasurer's office. Doug
Grant, controller-chief accounting officer, and Stan Smalley,
controller-finance and administration, were assigned to report to
me through Gordon, who would continue to supervise the Inter-
nal Audit department and Data Center. Doug Grant continued
his supervision of Tax Administration, Accounting and Report-
ing, and was assigned supervision of the Planning and Analysis
Groups and Government Relations. Stan Smalley continued his
oversight of Cash Management, Banking, Investments, Corpo-

rate Data Processing, Fleet Management, Real Estate, and Risk
Management.
There was considerable continuing activity in the defense
market in this year. A "Thrusted Vector Radar," designed and

built by Teledyne Ryan Electronics, was put into orbit from Cape
Canaveral as part of a data gathering mission for the nation's
Strategic Defense Initiative (SDI), popularly known as "Star
Wars." The data that were successfully acquired were used in
the development of defense satellites designed to identify, track
and direct defensive weapons against hostile ballistic missiles.
This radar was one of the most complex that Ryan Electronics
had ever built, and was completed on a very short schedule of 19
months from contract start to delivery. Teledyne Microwave and

Teledyne Monolithic Microwave, in a joint effort, developed a
new type of miniaturized electronic delay device that represented
205
Distant Force
a major improvement for electronic countermeasure decoys

designed to protect aircraft and ships from missile attack by con-
fusing or misleading enemy radars.
A major milestone in the Harpoon engine program was
achieved in when Teledyne CAE delivered its 5,000th
January,
J402 sustainer engine for the Harpoon anti-ship missile. Har-

poon had been introduced into the US Navy arsenal 12 years
earlier, and 315 had been launched to test their reliability. They
achieved an amazing 99.37 percent reliability record, in spite of

the fact that 86 had been stored longer than their designed five-
year shelf life, and some had been stored for up to 10 years with-
out maintenance.
During the year, two of our companies received especially
large contracts for their products. Teledyne Continental Motors,
Aircraft Products Division, was one of the two largest producers
of piston engines for general aviation aircraft. That industry had

been in deep recession for almost a decade, and the company
sought new products to survive. Their quest was answered with
the receipt of a $48 million Air Force contract for turbine engine
ground power generators, and an additional contract of $28 mil-

lion for these same products from the Army.
Teledyne Continental Motors, General Products Division
also received a $97 million contract from the Air Force to build
Crash, Fire, Rescue trucks. This was the first departure from the
division's primary product, diesel tank engines, into the field of
complete vehicles.
One event in this year that was not planned for, but which
ended successfully, was a nighttime sea rescue carried out by the
crew of Teledyne Exploration's Casey Chouest seismic survey
vessel. At the end of one of its survey jobs in the Gulf of Mexico,
they received a radio distress call from an offshore drilling rig
some 80 miles southeast of Galveston. One of the legs of the plat-
form had hit a soft spot in the ocean floor and the rig was listing
206
dangerously. The 34-man crew had abandoned the rig in two

escape capsules. A Coast Guard helicopter had sighted the two
capsules and directed the Teledyne vessel to the scene. The rescue
was complicated by darkness and 10- to 14-foot seas. Light was
provided by the Coast Guard helicopter, and the crew of our
vessel was able to successfully recover the men from the capsules
without injury.
In my final Intracom for 1988, Teledyne's 28th year in busi-
ness, I pointed out that while there were some distressing events
in that year, there were also some positive signs. We had strength-
ened many of our businesses, diversified products into promis-
ing new areas, and made significant organizational changes that
would brighten our future.
With an apology for speaking about my own company at an

ASM meeting in 1988, where I was the keynote speaker, I told how
Teledyne had addressed a problem that had been raised by Nobel
Laureate Robert Solow regarding the need for greater interchange
of ideas between the academic world and industry. He had stated:
"Technology and innovation are the prime sources of economic

growth. Revival surely doesn't happen in the time span of one
or two years. But if we are to grow, if we are going to prosper,
it will have to be done. We can't stay rich with second-rate tech-
nology, and lackluster productivity. To rectify the difficulty we

have demonstrated in transferring developments into commercial
applications, we need greater cooperation between academia and
the business community, whereby developments achieved on the
campuses are brought to life in the marketplace."
I explained that Teledyne, with 120 largely autonomous

companies working in many diverse fields and technologies, had
decided that a central R&D laboratory would not be appropri-
ate. Instead, 13 years earlier, we had designed a university/indus-
207
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try program that would both assist universities in their research
activities and supplement our individual long-range company

R&D efforts. This was the program I've already described, called
TRAP, or Teledyne Research Assistance Program. My model for
this program was the fine relationship I had established many

years earlier with MIT and Morris Cohen, and with Carnegie
and Bob Mehl. The results of TRAP, however, were many times
more effective in that it included the whole world of university
capability.
In my speech, I also explained that we did not limit the sub-

ject matter of the research grants we offered. They might include
law, accounting, marketing, economics and social sciences, but
most grants were in the technological fields. We included support

at both graduate and undergraduate levels, non-profit research
institutes and even national laboratories. In the previous 12 years
we had had 164 projects with 70 different institutions. Several

had been in Canada and one in the Middle East.
Virtually all of these projects, with the possible exception

of a few with National Laboratories, were undertaken without
government funding, and were specific to our company's needs
and to a particular university's talents and desires. Several of
these projects involved mathematical modeling of processes and

devices, which could lead to considerable economy in design and
prototype costs.
Typical projects included the modeling of more efficient gas-
fired water heaters (Purdue); flow and temperature profile of

metal in rolling mills and rotary forges, metal flow and solidifica-
tion of aluminum, magnesium and nickel alloys (Colorado State);
and research by the physics department of Stanford University
on thin-film high-temperature semiconductors. Another favorite
of mine was the program at Drexel involving the fabrication of

a three-dimensional, carbon-carbon high-temperature compos-
ite turbine wheel, a lovely industry/university cooperative, multi-
208
disciplinary, high technology project that involved both textile
technology and materials science.

In concluding my talk I outlined the problems of the future
that we would have to solve if our country was to maintain its
technological edge and competitiveness, particularly in the areas

of lowering the cost of goods and providing the energy resources
needed, as well as using them in a more efficient manner. I pointed
out that while Teledyne was relatively small in comparison to
other companies in the US and the world (125th in the US at
that time) that our research budget with universities was reach-
ing $1.6 million per year, through TRAP, supported by another
$400,000 contributed by our sponsoring companies. If just 300
companies in the US were spending that much, there would be
a total of $600 million available to support basic and applied
research at universities, more than one-third of the funds avail-
able to the National Science Foundation at that time.
Finally, we were also very sorry to have to report Betty Den-
ton's death in this year. She had been Henry's executive secretary
from the very first day of the corporation's existence and had
served him and the company exceptionally well for 28 years as
well as four years previously when they were at Litton together.
With her close association with Henry, and involvement in the
many events and decisions that came from that corner office, it
is sad that she is not with us today to contribute her recollections

to this document.
209
Distant Force
1989: Henry Retires After 29 Years of

Brilliant Leadership
1989 was a landmark year in the history of Henry's company.

After 29 years at the helm of Teledyne, guiding it through one
of the most outstanding corporate success stories in the history
of American business, and over some rough seas, as well, Henry
Singleton retired as an employee and officer of the company
he created. I became vice chairman and chief executive officer.
Henry, however, remained chairman of the board for another

two years, with continued interest in the company he founded.
Henry's retirement didn't come as a surprise to me, as his first
stock buyback decision had, because Henry and I had discussed

both of our approaching retirements for some time. Henry was
73 in that year, and I was 70. We had had many discussions
about his retirement in the months leading up to that event, and
about the management restructuring we would have to make. We
also discussed my retirement, which would follow shortly after
his. I proposed to take a reduction in my salary to compensate

for the additional expense of my replacement's salary during the
transition period, but Henry objected to that.
Teledyne's sales in 1989 were essentially flat at $3.5 billion,

matching 1988's results closely, but the company's net income
declined substantially from $392 million to $259 million. In
spite of the many activities we were involved in for military and
aerospace markets, profit from the aviation and electronics seg-
ment was considerably lower than in the previous year. This
was primarily a result of higher than expected costs on certain
defense contracts, and decreased demand in the defense sector.
However, sales in our specialty metals segment had increased in
210
each year since 1985, made a large increase in 1988, and did so
again in 1989. Consumer segment sales also increased steadily
since 1985. We paid four dividends of $1.00 per share to share-

holders during this year.
Results of our insurance company operations were reduced
by losses due to severe storms in the Southwest, as well as by
the effect of strengthening the reserves at our casualty insur-
ance companies. I was very pleased, however, that Jerry Jerome
agreed to assist me by assuming the duties of group executive
of the Casualty Insurance Group, which included Trinity Uni-
versal, Financial Indemnity and our thrift and loan company.
Fireside Thrift.
Teledyne Ryan delivered the 500th airframe for the Army's
Apache attack helicopter during this year, and also received a
contract from the Naval Air Systems Command for the develop-
ment of a Mid-Range Unmanned Air Vehicle to be used by the

Navy, Marine Corps and Air Force. The new contract was valued
at $69.6 million and was one of the largest orders the company
had received in its 67-year history. Teledyne Brown, in conjunc-
tion with a German firm, was awarded a contract to produce 522
Tank Weapon Gunnery Simulation Systems.
Teledyne Electro-Mechanisms was awarded a Department
of Defense contract to develop and produce advanced multilayer
interconnection circuitry for the Airborne Self-Protection Jam-
mer program, and Teledyne Gurley developed an optical encoder
that could determine angular position with an absolute accuracy
of plus or minus one arc second (1/1, 296, 000th of a revolution)
for radar tracking, machine tools and other precision angular
measurement applications.
Unfortunately, several of our companies in the San Francisco
Bay Area were damaged in the earthquake that hit this area in
October. Teledyne MFC in Palo Alto, Teledyne Semiconductor

and Teledyne Microwave in Mountain View, Teledyne CME in
211
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Santa Clara, Teledyne McCormick Selph in Hollister, and a num-

ber of the offices of Fireside Thrift were affected. There was some
structural damage, considerable water damage and prolonged
power outages. I company managers that this was
pointed out to
a good reminder that each company needed to have a practical
emergency plan for this type of event, and that all employees
should be made aware of it. No personnel were seriously injured,
and they all reacted promptly to minimize damage.
Among our other personnel changes in that year, Bill
Rutherford, senior vice president of Teledyne Industries, Inc.,

resigned. He had served in this position since 1969 when Ryan
Aeronautical joined Teledyne. He was chief executive of Con-
tinental Motors and vice president of Ryan Aeronautical. Bob
Steenberge assumed management of the Microwave Group
when Bill left.
Jim McGovern, who was formerly Acting Secretary of the Air

Force, following over two years as Under Secretary, joined Tele-
dyne as special assistant to Hudson Drake, senior vice president

and Pacific Group executive. Jim was a Naval Academy gradu-
ate, with 10 years of active Naval service as a fighter pilot, with
a record of over 2,000 hours' flight time and 250 aircraft car-
rier landings in high-performance, supersonic aircraft. He also
served five years on the staff of the Senate Committee on Armed
Services as general counsel, and subsequently as staff director
and chief counsel of the committee prior to his appointment as

Air Force Under Secretary. We welcomed his unique expertise
and the contribution they could make to our operations.
Hudson also announced that Robert Rieth, president of Tele-
dyne Brown Engineering, was appointed group executive of the
Aerospace Group, in addition to his duties as president of Brown.
Rolf Wyer, who formerly held that position, was appointed to
Hudson's staff, where he focused on special assignments until his
retirement in 1990.
212
Will Strong, who had been with us since 1973 managing

our international operations in Latin America and the Far East,
transferred from his position in Teledyne International Market-
ing to Teledyne AUvac/Vasco as vice president international sales
and marketing.
The Whistle-Blower Era
I think it's appropriate to interrupt this chronological discussion

of our operational results at this point to address the serious legal
problems we began to encounter. Over the years we performed
work on a substantial number of defense contracts for the US
Government. Many of these contracts included price re-determi-
nation clauses, and most could be terminated at the convenience
of the government. In addition, virtually all defense programs are
subject to curtailment or cancellation due to the annual nature of
the government appropriations and allocations process.
As a defense contractor we were also subject to various audits,
reviews and investigations by the government, relating to our
compliance with federal contracting requirements. If any of these
investigations led to an indictment, the operating unit involved,
and even the entire company, could be suspended for an indeter-
minate time from participating in new government contracts.
As I have said, Henry and I had strongly expressed our poli-
cies on many management meetings, as well

ethical behavior in
as in published rules of ethicalconduct that we had distributed

to all our companies. More important, we took immediate and
strong steps to improve the ethics awareness and compliance of
our operating units. Several presidents of our companies resigned
or were fired, and a number were reprimanded for lax ethics
standards. We instituted a renewed ethics compliance program,

which I presented to all our company managers in a series of
213
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face-to-face management meetings, to assure that none of these

violations would occur again.
To put these so-called "whistleblower" suits into perspec-
tive, it should be noted that these actions were brought under
the qui tarn provisions of the False Claims Act, which was origi-
nally enacted in 1863 to combat Civil War profiteers, and was

modernized in 1986. As amended, the False Claims Act, by
guaranteeing successful plaintiffs a 15 to 30 percent share of the
amounts recovered by the government, encourages those who
know of alleged fraud against the government to file False Claim
actions; it also protects their jobs. For example, in one action
that involved one of our units regarding improper testing (which
I'll discuss in detail later) we settled the matter, without admis-
sion of wrongdoing, by paying a $2.15 million fine. The person
who made these accusations received approximately $430,000 of
that amount.
At this point, I think it is important to note that in the next
six years 407 suits were brought against government contractors,
and Teledyne was the subject of five of these. The entire industry
had suffered through a series of these problems.
In 1986, our own corporate auditing staff had uncovered evi-

dence of overcharges on a Navy Helicopter contract involving
Teledyne HydraPower, makers of hydraulic components, and we
informed the US Defense and Justice Departments on this mat-
ter. On August 15 of 1990, the president of that company was
charged with making false statements to the Defense Department
and faced a maximum prison term of five years and a fine of
$250,000. We ultimately paid $11.9 million to cover the over-
charges, as well as interest and fines for this indiscretion. Our
action was applauded and later was very helpful in getting our
other cases resolved satisfactorily.
On January, 14, 1988, the Defense Logistics Agency of the
government suspended the Teledyne Electronics Division from
214
receiving awards on new government contracts. The suspension

was issued in the connection with the government's investigation
of defense industry procurement practices in an action called
"Operation 111 Wind." The Defense Logistics Agency later lifted
the suspension on July 14 of that year.
This action arose out of Teledyne Electronics' use of a mar-

keting consultant to assist it in obtaining a second Air Force
contract for its hand-held transponder test sets used in the IFF,
Identification Friend or Foe, systems used on military aircraft
and ships. The central issues of the case were whether Teledyne
Electronics authorized or had knowledge of a consultant's pay-
ments of bribes to a government official, and whether it had
falsely certified that it had not agreed to hire the consultant to
solicit the contract or pay him a contingent fee on the award of

the contract.
Teledyne was completely successful in its defense of the bribery
charges. There was disagreement among the company's employ-
ees, as well as procurement experts, however, as to whether the
agreement with the marketing agent should have been disclosed
to the government. We accepted responsibility for failing to dis-
close the terms of that agreement. On April 13, 1989, a federal
court jury acquitted three of our Teledyne Electronics officials of
bribery. However two officials were convicted of conspiracy and
wire fraud.
On May 5, 1989, agents of the Federal Bureau of Investiga-
tion and the Defense Criminal Investigation Service executed a
search warrant on our Teledyne Systems Company and removed

a number of documents relating to contracts and pricing. The
company had been accused, by two former employees, of making
inflated estimates and overcharges on defense contracts. The con-
tracts, which were the subject of these actions, were sole source
negotiated contracts, which are not subject to price competition.

The law requires that the contractor on this type of procurement
215
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provide the government with all costing and pricing data that
have a significant effect on the negotiations.
A number of Teledyne Systems employees received subpoenas
On November 28 of 1990,
to testify before a federal grand jury.
the Justice Department joined another suit against Teledyne in
this matter.
While we were still occupied by the Teledyne Systems action,

another whistleblower suit was brought against our Teledyne
Relays Company by an employee. It was charged that the com-
pany's testing procedures had been improper, although at the
time we believed they had been fully compliant with government
rules. Later, in April 1993, we were suspended from making fur-
ther delivery of these products to the government for one year by

the Defense Electronics Supply Center. However, we had already
voluntarily suspended shipments of these products as soon as
the investigation began and before the DESC order. We had also
immediately assigned a team of 10 of our own management and
engineering personnel to investigate our testing procedures. About
2,000 man-hours were spent on this internal investigation, and we
found only minor discrepancies in the test procedures we used.
Since about 90 percent of these products went into govern-
ment programs, this suspension severely curtailed our sales of
these items. We took immediate steps to alter our testing proce-
dures to meet government demands. We were confident that the
suspension order would be lifted in the near future and we con-
tinued to build these products to meet our backlog using revised
testing procedures. The products involved were our TO-5 type
relays, which incorporated an electromechanical relay in a tiny,
hermetically sealed TO-5 type transistor case. They were widely
recognized as the industry standard for subminiature electrical
switching relays in applications up to one ampere.
While this suspension had a severe effect on Teledyne Relays'
operations (more than 30 percent of the division's 500-plus
216
employees had to be laid off because of this suspension), it also
had repercussions in the defense community. We provided more

than half of this type of relay to contractors who used them in
dozens of military and space programs, and in some cases we
were the sole source for these products. Consequently, the sus-
pension on shipments was lifted in just a few months. Litigation

on this matter, however, continued into 1992, when it was finally
settled. In order to resolve the issue without further litigation, we

eventually pled guilty to making false statements and agreed to
pay a fine of $17.5 million.
In anticipation of the gathering storms clouds that were

enveloping us, as well as all other government contractors in the
US, we had held a government contracts compliance and ethics
seminar in Los Angeles on March 6, 1989. This followed the
publishing of our ethical policies booklet in 1987. The seminar
was conducted by the Washington, DC law firm of Crowell &
Moring. While we had long emphasized the necessity of ethical
behavior in all our dealings, there were vast changes that had
taken place in government procurement regulations and prac-
tices in the previous eight years, which had to be understood and
taken into consideration. This first seminar was for our corpo-
rate staff and group executives.
A second seminar was held in Dallas in March for group
executives and company presidents. Another seminar on the
same subject was held for all Teledyne internal auditors, and we
continued with this series until hundreds of our executive, finan-
cial, engineering and marketing employees had been schooled in
the intricacies of these complex regulations. At these seminars,
here is what I had to say:
Many of you have been associated with government

procurement procedures for years. Well, you can forget
most of what you know, for the rules and regulations
217
Distant Force
have changed. I suggest you pay serious attention to the

exf)erts we have brought to explain the new rules and
regulations and their interpretations. Concentrate, as
you hear these experts, on the changes you will have to
make in your selling, manufacturing, quality control,

and cost and pricing activities.
In January, Teledyne Electronics was suspended

from prime and sub contracts by the Defense Logis-
tics Agency. We have spent months in presenting to the
DLA our program for the next three years in compli-
ance with their release of that suspension. In addition,
we have empowered a special government compliance
team from our internal audit and legal departments to
keep us clear of any actions that would be considered
questionable in this new environment. I am sure that
we will be cleared soon.
Just a word about the Teledyne Electronics case [see

page 214]. Three employees were acquitted on counts
of briber)' as the jury believed their statements that they
did not know that the consultant they had hired was
bribing a US Naw official. The> did not know that one
of our own employees, who had been recommended to
us by that official, was in on a scheme to convince us to
hire the consultant. The fee was to be split four ways.
One employee was acquitted on all counts, but two were
found guilt>' of making false statements and spent three
months in a minimum-securit\' location. The acquitted
man is back on his job, but the others can no longer be
employed by Teledyne. Teledyne Electronics, inciden-
tally, accounted for less than two percent of Teledyne
sales, and had 500 employees.
I concluded mv lecture as follows:
218
A word on the law. It is a new tenet that a corpo-

ration is presumed guilty of a criminal act by any one
of its employees. Thus when the scheming crook, who
brought down his fellow workers at Electronics, turned
state's evidence and pleaded guilty to bribery to get a
light sentence, Teledyne itself was presumed guilty. I
am holding each of you responsible to carry the mes-

sage to your employees that you mean business. You
are going to be held responsible for their behavior in
future years.
We continued to aggressively defend against the actions that

were brought against us in suits involving Teledyne Systems,
Teledyne Ryan, Teledyne Neosho (overhaul and repair of turbine

engines) and Teledyne Relays in relation to both contract perfor-
mance and environmental matters. Based on the information we
had at that time we didn't believe the outcome of any of these
matters would have a material adverse affect on our financial
condition. However, these actions were the tip of an iceberg that
continued to plague us and many other major corporations for
several years.
A research bulletin published by the Donaldson, Lufkin &:

Jenrette investment firm, written by Vice President David S.
Moore, sheds further light on the matter of the sundr)^ suits that
had been brought against us. Under the heading "Viewpoint" the
report states:
Recent negative articles in Business Week, The

New York Times, the Los Angeles Times and various
news services have adopted a bias regarding Teledyne's
existing suits, whistleblower investigations and poten-

tial suits which appear to blatantly distort the current
facts.While the whistleblower-bashing may continue in

the near term, we also believe that one or more positive
219
Distant Force
legal developments and a more even presentation of the

facts are possible in the near term, which should begin
the process of rebuilding investor confidence.
Later in this bulletin, under the heading "Important Points,'

the following was said:
Contrary to the negatively biased tones of recent

articles on Teledyne, we note the following: (a) During
the last six years, 407 whistleblower suits have been
filed in the United States against DOD (Department
of Defense) suppliers. Teledyne has been named in five
of these suits (1.24 percent of suits versus Teledyne's

0.8 percent of the total defense components budget)
of which one has been dropped outright and only one
has actually proceeded to litigation, (b) In the last 18
months approximately 340 voluntary disclosures have

been made to the DOD of which Teledyne made two
(0.6 percent), (c) Teledyne is one of the very few defense
companies which publicly discloses whistleblower suits
prior to litigation, or highlights voluntary disclosure

actions, (d) At Teledyne Relays only one individual was
indicted; not even the test engineer's direct supervisor
was indicted, (e) The DOD has not chosen to issue a

company-wide suspension for Teledyne's defense opera-
tions (which it has used for other companies in recent

years) and in fact will likely consider lifting its suspen-
sion of Teledyne Relays (the only current suspension
at Teledyne) in the near future. Looking forward, we
believe that one or more positive developments are pos-
sible during the next 60 days on the outstanding and
currently sealed legal charges against Teledyne based
on potential lack of data, questionable sources, or other
issues.
220
I've included the above material not to condone or excuse the

missteps that some of our divisions made, but merely to put these
events into perspective.
Although it hardly seemed necessary, after all our meet-
ings, distribution of manuals, training sessions and seminars on
the subject, I was asked to again explain Teledyne's position on
unethical or illegal conduct that might seem to bring gain to an
individual company or the corporation as a v^hole. I did so in a
lengthy Intracom message that explained our policies in great
detail. The final message could be expressed in one sentence:
"Just as Teledyne will not tolerate unethical or illegal conduct
among its employees for individual gain, we will also not tol-
erate such conduct for company gain.'' Unfortunately, as I've

explained, the message just did not get through to a few people.
221
222
Our Fourth Decade Begins
Continued Operational Progress in 1990
The decade of the 1980s was over. It was an eventful period for
Teledyne in which the fortunes of some of our companies changed

dramatically for various reasons. Some companies continued
the rapid growth that characterized Teledyne's performance in
the 1970s, and for others it was a period of consolidation. The

domestic oil business had all but disappeared, metal prices had
dropped, foreign competition and supply increased, government
regulations and presence escalated, and the economy experienced
drastic changes.
Our companies responded resourcefully by eliminating prod-

uct lines, diversifying into new businesses and markets, adjusting
costs and productivity, and cutting back as necessary to survive.
We closed a few operations, and made changes in management and

organization. We also spun off some financial and service com-
panies to shareholders who benefited as their shares of common
stock increased. Teledyne common stock sold for a low of $96 and
a high of $154 during that decade, and closed the year 1989 at
$134. In 1989 the value of the combined stocks of American Ecol-
ogy, Argonaut Group and Teledyne generally exceeded $400.
We started the decade of the 1990s facing different external

forces than we had 10 years earlier, and saw new opportunities
as well as new challenges.
223
Distant Force
1986 1987 1988 1989 1990
Sales $3,241.4 $3,216.8 $3,534.6 $3,531.2 $3,445.8
Net Income (loss) 238.3 377.2 391.8 258 9 94.8
Net Income (loss) Per Share 4.07 6.45 6.81 4.66 1.71
Assets 2,719.8 3,091.7 3,268.2 3,463.5 1,666.1
Stiareholders' EquitY 1.636.6 1.976.0 2,138.4 2,326.9 523.5
Outstanding Shares 11,709.478 11,667.978 11,320,289 11,189,969 55,412,845
In 1990. Teledyne distnbuted to its shareholders all o1 the outstanding common stock ot Unitrm. Inc . the parent company ol Teledyne's
former insurance and finance subsidiaries
In 1987. the Company changed its method of accounting for pension expense, as required by SFAS No. 87. Income on continuing
operations before income taxes includes a credit of S23 2 million in 1990. S22.9 million in 1989. $30.5 million in 1988 and $26.7 million in
1987 compared to pension expense of $47,8 million in 1986.
The Company has paid cash dividends of SO 80 per share each year since 1987. Income per share and cash dividends per share have been
adjusted for the 5 for 1 common stock split distributed March 1. 1990
1990: New Challenges
Sales had remained relatively constant since 1988, with $3.45 bil-
lion in this year compared to $3.53 billion in 1989. Sales in our

aviation and electronics segment had not changed significantly
since 1986, but our specialty metals sales, after increasing each
year since 1986, declined in 1990 primarily due to the economic
slowdown in the steel and automotive industries. After increasing
steadily since 1986, our consumer segment sales also declined in
1990, due to the disposal of certain operations in 1989.

Income from our operations in 1990, however, dropped
substantially to $95 million, or $1.71 per share, compared to
$259 million, or $4.66 per share, in 1989. Operating profit
before tax in the aviation and electronics segment was adversely

affected by approximately $90 million, of which $35 million was
due to provisions for losses from the performance of development
and the initial production of fixed price contracts. These losses
were significantly higher than those in the prior year. As well as
the economic slowdown in the steel and automotive industries
affecting our industrial and metals businesses, estimated losses
224
on the disposal of certain operating companies, settlements for

aircraft product liability and strikes at certain engine manufac-
turing locations also adversely affected the 1990 results.

Because of a decreasing market for its products and declin-
ing product prices, we decided to close our Teledyne Ohio Steel
operation, which made forged and spin cast iron rolls for the
steel industry. All its physical assets and property- were later
sold to a privately held company. We number
also disposed of a
of other companies, including Monarch Rubber and some that
served the petroleum industry. Another major company sold at
this time was Acoustic Research, our manufacturer of AR brand
high fidelity speakers and related audiophile products. It was
bought by Jensen International, another prominent company in
the high fidelity field. These actions reduced our total personnel
from about 43,000 to 24,000.

In one of his Intracoms for 1990, Bill Rutledge isee following
page) offered some year-end thoughts:
The first year of the new decade has just about run
its course. Many of our companies have performed
admirably in the face of deteriorating market condi-
tions. However, for Teledyne as a whole, our financial
performance has been unsatisfactory. During 1990, we

have experienced a number of major shocks related to
defense contract overruns, product liability, plant clo-
sures, union strikes and contract compliance issues. For

those who have been involved in these crises, 1990 has
been a very difficult year.
As we approach the new year, I would ask all of us

to reflect on what we have accomplished during 1990,
and to gear up mentally and emotionally for the chal-
lenges of 1991 and beyond.
225
DisCsnf fomnr
Bill Rutledge Becomes President
b was in this vear that I was elected vice chairman of the board,
and cootinued to serve as chief executive officer. One of our
most important coocems from the mid '80s onward had been to
find the rig^ man to take over the operatit^ management of the
corpofatioa when Hairy and I were ready to retire. Henry had
made a number c^ very dose hiends in his early years, and he
was ahmfs very loyal to those friexids. He really cherished those
trienddiips. Amon^ these men were Allen Orbuch., Mar\- Bhtz,
Bill Rnthertofd and others. He had had a dose relationship with
Kll Rntherfocd at Litton Industries, whidi continued later when
Bill came to Tekdyne throiî the Ryan/CcMitinental acquisition.
How'ev-er. in 1986, 1 had recruited a gentleman named Bill
m our ccMnpany as a group executive. Bill came

trcNon f MC, where he was defense systems international divi-
' re pcendent and general manager. He had a bachelor of
" ZTCC in metallurgical engineering from Lafayerre Col-
~? =Ter's degree in financial management from George
- "irrersity- He wss also a graduate of the Stanford
Executive J -
One oi his many strengths was his considerable experience in

dealii^ with government oxitracts fcM- large machinery, indud-
ii^ lar^ military tran^xxt vdudes. In the next four years he
had met our expectations and we had decided that Bill Rutledge
woold indeed be a very acceptaUe candidate as my successor,
and so we kept moving him up throi^;h the ranks ver>' quickly.
In 1987 he was dected vice pre^dent ai Tekdyne, and in 1988
became a senior vice president. Then, in June of that year, he
was appointed executive vice president of Tdedyne, Inc., respon
siUe fcir the ^>ecialty metals and industrial s^ments. and Hud-
son Drake was named senior vice prendent and president of our
aero^Mce and electronics segment.
226
We made Rutledge president of Teiedyne in 1990, and he

Bill
took over the operational management of the company. He also

became a member of our Board of Directors, which increased
the number of directors on our board to seven. Later, in 1991, he
became Teledyne's president and chief executive officer, and finally,
in 1993 he became chairman in addition to his CEO position.
Hudson Drake became Rutledge's second in command.
He held a BA degree in economics from UCLA, an MBA from
Pepperdine University, and was also a graduate of the Execu-
tive Program at UCLA's Anderson School. He began his career
at the Autonetics division of Rockwell International m 1958 as

a staff engineer, and left that company as a department man-
ager in 1968. In that year he won a Presidential appointment
as a White House Fellow inWashington, DC, and served in the
White House until 1970, when he was appointed Deputy Under
Secretary of Commerce.
As I mentioned earlier, Hudson had joined us in 1972 as vice
president and general manager of Teiedyne Ryan Electronics and
became its president in 1980. He was responsible for moving the
company from its role as a subsystem manufacturer to a devdoper
and producer of complete Doppler radar navigation systems f<wr
US Navy helicopters and US Air Force strategic aircraft, a devel-

opment that contributed substantially to Ryan s sales and profit.
In 1984, Hudson was promoted to president of Ryan Aeronauti-

cal, where he played an important part in the company's very-
profitable Apache Attack Helicopter program and many other
significant Ryan programs. Then, when he became a senior vice
president of Teiedyne in 1988, his responsibilities included six

companies that achieved revenues of SI. 5 biUion in 1996. After
Teiedyne merged with Allegheny, he went into that corporation

with Bill Rutledge, and finally retired in 1997.
In addition to these realignments, the Board of Directors
elected Gordon Bean and Gar>- Riley as vice presidents, and
J.
IX&lflHf fovcv
Doqâs J. Grant as tveasoicr. Judith R. Ndson was elected gen-
and secietaiy.
eral counsel
Jack Hamikoo, after 40 years with Teledyne Geotech,

lemcd. Jack had senml as pceskient of Teledyne Geotech for
many ^cars, was gitoap ^nt^ûivt^ of the Southwest Group from
1970 ID 1989, and ran TRAP for many years, as I've described.
We woe pleased that he agreed to cootinue his association \%ith
Teledyne in manaîi^ Teledyne Minerals and he also continued
CO serpe oo the Teledyne CharitaUe Trust Foundation Committee
and the Technical Advisory Board. Jack has remained my friend
oper the 3iear&, and contributed safne<^ his menKMies of Teledyne
ID this book.
Insuiaiice Company Spin-offs: 1986-1990
In January 1990, our Board <^ Directors approved a plan to

spin ofiF the rest of our insurance and finance subsidiaries to our
sliaiclioldcrs, snbfect to various regulatory procedures, as we had
done with Aigonauc in 1986. The IRS rolii^ in this matter was
that the în-off would be tax free to our diardiolders.
Unknn became the name for the new entity that combined
Ikated Insurance Company ai America and its sub»diaries with
Trinity Uuversal Insurance Company and Hreside Securities
Cocporatioo and its subsidiaries. These subadiaries represented a
r raiJii i ifitl ammal iiirinmf> n^ ^1 I hillinn I jatiPTj in fiirrhfT finanrial
motes, Teledyne announced a five-for-ooe stock March

sjp\it in
and paid a cash dividend of $0.20 per share on May 22. The
ssock had been trading at over S330, and the spbt brought it into
a more practical trading raiê. It was the first split since 1981.
The ^lin-off was cooqileted on April 20, with Unitrin stock
certificaiBS mailed to sfaareliolda^ The stock traded under the
22«
C}ur Frjurdi Decade Begins
symbol UNIT on the NASDAQ National Maikef S^sem.

JeiTv Jerome then resigned his post as a Tekdrne Tke fxesidenc
and became chief execnnre officer and piesidenr of die newcom-
pany. Dick Vie, who was president of Uniod Insmance, retained
diac post and became a senior rice president and direcoor of Uni-
trin. Allen Herbert remained as president of Financial IwAn i m ii
y
and was made a vke president of Unkrin. Henrr became chair-
man of Unitrin and I became a member of the board.
managrment snccessioa pioljfc
Part of oar planning for the m
was our deci»on n> spin off oar insorance and finawnp compa-
nies and let them stand alone, as mc had <ioae with US Ecolo^.
We wanted Teledyne's shareholders to own them, and keep own-
ii^ them if tfaey wanted to, and to prosper br that ownecd^pL
Most of the equity investments that Henry had made throng the
insurance companies^ such as Coniss-Wriîff, LitGoo Indnstries
and others, went to Tefedyne sharehokkrs in ths way.
Argonaut was the first financial nnk that we had span o£L We
did that in 1986. We had acqoitcd Aiguuam in 1969 fior S87 mil-
lion. At the time c^ the spin-o^ it traded at S20 a share with a
value of S234 milhoo. Shareholders receiied ooe share of Argo-
naut Group common stock on each share of Tefedyne aMuwum
stock. In additioa to gtvii^ oar shareholders increased Ik-Ailiiiaii
in handlii^ their iniesii iientSr k coadnned n> provide them with
substantial incooie for many years atterward. By 1990 k was

tradii^ in the h^ 70s- In that year, Argooant^s net inmme had
jumped compared to $S1.6
to S89.7 millioo, or S9.76 per share,
million or S8.26 per share in 1989. Earned premnms had giown
to S458.7 million coiiq»red to $415.7 millian ~ - svwus : —

gruwih was atifihuted to growti î _i râmcni:
year. Part of this
income, inchidii^ a S12.8 millian dividend oo the CortBS-Wright
shares that Hairv had directed them to acspure.*
*
Los Amgeies Times. fxiBBsrr - . 19W.
Distant horce
This was a prime example of the things Henry did to create

value for our shareholders, which the analysis made in the book
Good to Greats mentioned earlier, did not take into consideration.
In an article in Institutional Investor^ investment analyst
Leon Cooperman, who was a long-term investor in and supporter

of Teledyne, had this to say about Argonaut: "Number 1, the
company returned 18 percent on shareholders' equity last year,
compared with 15 percent for the rest of the market. Number
2, the company is committed to enhancing shareholder value; it
has bought back 2.3 million shares since 1986, and management
owns 30 percent of the outstanding shares so they think like —
owners." He also noted, in scrutinizing the company's invest-
ment portfolio, that it only contains government securities, high-
grade municipals and corporates. "They have zero junk bonds.
How many insurance companies today can say they don't have
one penny of junk bonds in their portfolios?"
The final assignment I ever received from Henry Singleton

was, unfortunately, given to me in his home a few weeks before he
finally left us. Knowing he had a brain tumor, he had a final con-
cern about our 1986 spin-off of Argonaut Group, Inc. The board
of Argonaut in 1989 had agreed with Henry that a study should
be made to sell the company to another group or company so that
we could be excused from managing the entity. He was disap-
pointed as an investor in the performance of the stock (under $20
per share) and hoped that we could sell it for at least $30 a share.
An outside firm had been hired to help do this job. After a num-
ber of months, the effort was cancelled by the board as no buyers
were found. Henry always thought that the management of the
company, not wishing to be replaced, had failed in the marketing
effort. He told me on that sad day that, if he left us, it would be
my duty to replace the management and solve his problem.
Fortunately for my assignment, two young men called me to
inquire about Argonaut. They were both involved in the insur-
230
ance businesses of their families, the Watson family of San Anto-

nio and the Gray family in New Orleans, and both were close
friends in recreational sailing activities in the Gulf of Mexico.
Mark Watson had actually assisted his father in the sale of a suc-
cessful company in Texas to a major insurance firm. They knew
of Argonaut's businesses and thought they could help. After a
few interviews I was able to talk them into joining, getting Mark
Watson to become the president and Mike Gray, a vice president,
in early 2000. They added much to the company, added qualified
people to the board and made acquisitions. They also moved the
company headquarters from Silicon Valley to San Antonio, and
as I make these notes in 2007, they manage a company whose
stock has traded above $30 per share during all of 2006.
In our operational activities this year, security of information

continued to be an important government concern at this time,
and Teledyne Lewisburg became TEMPEST test facil-
a certified
ity listed under the National Security Agency's "Endorsed TEM-
PEST Test Services Program." TEMPEST was a government
security program devoted to testing a wide variety of sensitive
electronic equipment and certifying it to be free of spurious radio

frequency emissions that could permit unauthorized persons to
remotely detect and obtain classified data from these systems.
Lewisburg's services involved test and certification of computers
and peripheral equipment, communications devices, telephone
equipment and avionics instruments.
Because of our country's involvement in Operation Desert
Shield at that time, TeledyneBrown was awarded an emergency
contract to temporarily halt its production of green and brown
"woodland" camouflage screens for the US Army and shift its
entire capacity to the manufacture of tan desert screens.
Teledyne Ryan, meanwhile, was having the most productive
231
Distcvit Force
year in its history with its backlog at an all-time high. It had active
contracts for Firebee aerial targets for all three military services
as well as its ongoing Apache helicopter airframe production.
New orders extended Apache production into 1994, bringing the
total contract order to 849, with an option for 18 more.
Just at year-end, our Teledyne Continental Motors General
Products Division was awarded a $10 million increment as part
of a $342,841,544 cost-plus-incentive-fee contract for a technol-
ogy demonstrator and tank system design analysis.
I have mentioned my management newsletter called Intra-

com a number of times. The first edition of Intracom was issued
in October 1966 at the first management conference I had the
pleasure to plan and conduct at Teledyne. Berkley Baker and
I devised its format, and that design lasted for the ensuing 24
years. I issued and signed 336 of them. Henry did one. Number
336, dated October 1, 1990, was the last I was to sign as presi-
dent of Teledyne. The very next issue became the responsibil-
ity of the new president. Bill Rutledge, and it introduced a new
feature titled "Profitable Growth News." As usual, Berkley did
a great job in assisting me in the publication of those 336 issues
over those 24 years.
232
1991: A Milestone Year — Henry Singleton

Returns to Ranching
Our management realignments continued in 1991. Henry Single-

ton stepped down as chairman of the board in order to devote
more of his time to his ranching interests.'^ He did remain a mem-
ber of the board, however. I assumed the chairmanship, retiring
from active management of the company, and Bill Rutledge who

was then president, also became chief executive officer. In this
year I had also reached my 50th year of service to the company,
which began on June 1, 1941, when I joined Vasco as a research
metallurgist. I must say, it had been an exciting and rewarding
journey.
It was for the first time in Teledyne's 31-year history, at our
annual shareholders' meeting in April, that anyone other than
the founder had served as chairman of an annual meeting. That
honor had become mine, and I must say I approached the event
with some trepidation, but also with a great deal of pleasure.
"Henry," I quipped, "has always introduced me to make a speech,
and now I can say whatever I want first!
"I am proud that I have been named chairman, to replace my

long-time friend, teacher and associate. But no one can replace
this man, and only his continued presence on the board, and his
service as chairman of the executive committee makes it possible
for me to be willing to continue to serve.
"And I ask you to join me in a tribute of our appreciation for
the efforts of this entrepreneur, Henry Singleton."
This resulted in a prolonged standing ovation for Henry.
George Kozmetsky, co-founder, was at that meeting and was
also greeted with applause when I introduced him. I pointed
"^
Forbes, September 27, 1993.
233
Distant Force
out that in all Teledync's history, he had never missed one of

Teledyne's shareholders' meetings. I also introduced a number
of other important people who were present, including one of
the original investors in Teledyne, Arthur Rock, and that very
significant shareholder and investor, Fayez Sarofim.
After the official business of the meeting and the re-election

of its members, I was able to introduce Bill Rutledge as president
and new CEO and allow him to discuss the past year's perfor-
mance of the company, as I had done many times before.
Our sales in that year declined from $3.45 billion in the pre-
vious year to $3.21 billion, and we suffered a net income loss of
$25.4 million or $0.46 per share. This loss was due in large part
to a restructuring plan that included the possible sale or closure
of 24 of our operations, which accounted for some $515 million
in sales, or about 16 percent of our total 1991 revenue. Many of
these companies were mature and no longer in a growth mode

as they had been in the early '80s. About three-quarters of these
companies were in our industrial products segment. This action
was taken in order to place a more concentrated focus on our
technology-based businesses in which we had significant leader-
ship roles.
The best performing companies that remained were in our spe-
cialty metals segment in which we had recently made significant
capital investment. A new rolling mill for high-temperature alloys
at our AUvac facility was one example. This segment accounted

for about 30 percent of our operating profit for the year.
Operating profit decreased $148.4 million in this year, as

well, primarily due to the estimated cost of the restructuring
plan of $107.6 million, but also because of the general economic
slowdown that affected all of our segments with the exception of
consumer products.
234
In 1991,we also entered into a settlement agreement with

over 700 members of the United Auto Workers Union, resolving
an 11-month strike at our facilities in five cities where piston and
turbine engines were manufactured and overhauled. The agree-
ment settled all pending unfair labor practice charges involving
the parties.
At the end of this year, we closed our Teledyne Packaging
operation in Chester, Pennsylvania. This plant produced alumi-
num collapsible tubes used for the familiar toothpaste tubes and
for cosmetics and other products. Demand for these products
had declined substantially as the industry switched to plastic
tubes. There was no longer enough demand for their products to
warrant continuing operations at this facility.
At mid-year. Bill Rutledge reported that only two of the more

that 20 streamlining actions, such as plant closings that were
planned, had been accomplished, but that he felt that the restruc-
turing would be complete by the end of the year.
1992: Results
We were still coping with a number of government litigations I
described earlier. They were slowly being resolved, but were still
consuming a large amount of the attention of our legal staff.
The restructuring activities, as Bill Rutledge had predicted, were

essentially complete by this time. In spite of these problems, we
did achieve a net income of $33.2 million on sales of $2.89 bil-
lion in 1992. This was in comparison to a net loss of $25.4 mil-
lion and sales of $3.21 billion in 1991. The reduction in sales
volume was due in large part to the loss of sales for operations
that were closed or sold, representing some $308 million in this
year. Among the operations that had been chosen for sale or clo-
sure were three in energy exploration, drilling and supply; two
235
Distant Force
in engine manufacture or overhaul; six in aviation related com-

ponents, hydraulic devices and instrumentation; three in welding
systems and equipment; six in metal, wood and paper businesses;
and four in electrical equipment manufacturing.

At our 1992 annual meeting, a video was presented that
described some of the interesting events and products of the year.
Teledyne Brown Engineering had received two major contracts,
one dealing with the Strategic Defense Initiative, or Star Wars,
and the second as the Payload Mission Integration contractor for
the Space Shuttle.

Teledyne Continental Motors, General Products Division
was having great success with its high-mobility Crash Fire Res-
cue vehicle, with an order for 228 from the US Air Force. The
company was also actively pursuing commercial markets for
this product.
Ryan Aeronautical had rolled out its new Model 350

Unmanned Air Vehicle (UAV), for a market that was continuing
to grow in spite of decreases in worldwide defense spending. It
was successfully launched from beneath an F-4 Phantom aircraft
at 15,000 feet, validating its launch and recovery performance

characteristics. An initial customer order for 29 of the compa-
ny's Model 324 Scarab UAV, and associated ground support and
recovery equipment, had also been successfully completed, and
an additional order for 27 more was received.
In the consumer products area, Teledyne Laars was market-
ing an advanced pool heater, known as the H-E for high effi-
ciency, which offered an efficiency rating of 87 percent. It could

save pool owners as much as 45 percent on their fuel bills. The
company's overall line of pool heaters had an average efficiency
rating of 80 percent, the highest average rating on the market at
that time. Teledyne Water Pik, noted for its oral hygiene appli-
ances, and Shower Massage, had introduced two new air filtra-
tion products that combined multistage filtration with negative
236
ionization to achieve higher levels of reduction in dust, pollen

and tobacco smoke than other products.
Other industrial products and facilities were featured as
well, including Portland Forge's new facility for closed-die
impression forgings and Teledyne AUvac's new high-perfor-
mance rolling mill.
1993: BillRutledge Appointed Chairman and

CEO — Restructuring Continues
The company, in 1993, reported a net loss of $116.5 million,

or $2.10 per share, compared to a net income of $33.2 million
or $0.60 per share in 1992. These results were partially due to
winding down of certain military programs and reduced defense
spending, as well as softness in the aerospace market. An addi-
tional factor was the cost of the realignment and restructuring

program that had been undertaken, and certain special items
related to post retirement health care and insurance benefits.
In 1993, I resigned as chairman, but remained on the board,

and Bill Rutledge became chairman and chief executive officer.
I had made arrangements to hire Donald B. Rice as soon as he

had retired as Air Force Secretary, and he was made president
and chief operating officer in 1993. In addition to his tenure
as Air Force Secretary from 1989 to 1993 under the first Bush
administration, Don had been CEO and president of the RAND
Corporation's Santa Monica "think tank" for 17 years. Don is a
chemical engineering graduate of Notre Dame, and has a doctor-
ate in economics from Purdue.

We feh that Don had the managerial skills needed to make
an important contribution in his new position. Throughout his
career he had a well-known reputation for integrity, and one of
237
Distant Force
his first efforts as president was to accelerate internal audits to

ensure that the company complied with government contracting
rules. Because of his previous jxjsition as Air Force Secretary,
he had requested an opinion from the Air Force general coun-
sel, the department's ethics officer, regarding his new job, and it
was concluded that he was not prohibited from joining Teledyne.

Certain restrictions were placed on him, however, including the
requirement that until August of 1993 he was not to participate
in any matters related to our subcontract agreement for the F-22
jet fighter, and not represent Teledyne in any ongoing Air Force
matters, or any government matters that he had personally or
substantially been involved with when he was Air Force Secre-
tary. He assiduously followed these orders.

Though Henr>' and I remained on the board, we became fur-
ther removed from the general operational decisions of the cor-

poration.
Another person who had participated significantly in the
corporation's growth and success, Arthur Rock, resigned from
the board a year later in 1994. Art had been on the board since
the ver>'^ first year of the corp>oration's existence. In recognition

of his significant contributions to Teledyne's success, the board
approved the endowment of an undergraduate fellowship at the
California Institute of Technology in his honor upon his retire-
ment. Not long after, in 1995, George Kozmetsky, Teledyne's co-

founder and executive vice president from 1960 to 1966, also
resigned after 35 years of service as a director.
Another notable retirement in this year was that of Berk-
ley' Baker who had joined Teledyne virtually on "day one" as
assistant to the president for public relations, and worked with

Dr. Singleton and me throughout our entire tenures. During
Berkley's 28 years of service in that f>osition, he helped Teledyne
present its best face to the public, from the earliest acquisition
years through the difficult years of our legal problems. He was
238
instrumental in setting up the corporation's identification system

that helped make the Teledyne name and logotype recognized
throughout the world. Berkley did a tine job for us and I was verv
glad to have had him on my team.
On July 15, 1993, the board approved a major realignment of
Teledyne, consolidating its operating companies from 65 into 21,
and eliminating the group executive layer of corporate manage-
ment. It was estimated that this would result in an annualized
reduction of approximately $70 million in the company's over-
head and administration costs through the elimination of about
1,200 management and support positions, or about live percent
of Teledyne's total employees. Some 18 million square feet of
facilities were also eliminated.
Bill Rutledge said, in the company's second quarter report of
that year, "We have streamlined our operations in order to take
full advantage of the opportunities before us. The realignment

will assist us in addressing the increasingly complex business envi-
ronment of the 1990s and beyond. Our customers will be better

served by operating units which have more robust capabilities."
Donald Rice added: "The new, streamlined Teledyne allows
us to continue our emphasis on highly entrepreneurial compa-
nies that can take advantage of both US and international busi-
ness opportunities. We are consolidating product lines that have
similar customers or related technologies to further improve the

delivery of services and products to our global customer base.
"The realignment will raise the average sales volume per

operating company to approximately $120 million from $40 mil-
lion. These larger companies will each better sustain critical mass
in management expertise, technology and market opportunities.
We will also be better structured to continue the commerciaHza-
tion of our defense-related technologies."
Rutledge also stated, "Our 1991-1992 restructuring focused
Teledvne on those businesses in which we have a signiticant
139
Distant horce
leadership position. Moving to a more flexible, flatter organiza-

tion enables us to strengthen customer value through relentless
improvement of our products and services. This is our path to

profitable growth."
In the third quarter of this year we welcomed Frank V.

Cahouet as the seventh member of our Board of Directors. Frank
was chairman, president and CEO of the Mellon Bank Corpora-
tion in Pittsburgh, Pennsylvania. Frank came with a distinguished
background in finance, operations, and executive management

through his banking experience with a wide range of industries,
and he was a fine addition to our board.

Another item of interest in this year was that Dr. George
Kozmetsky, co-founder of Teledyne, and long-term investor
and member of the Teledyne board, was one of nine individu-
als selected to receive the National Medal of Technology at the
White House in Washington, on September 30, 1993. This is the
highest award bestowed by the President of the United States for
extraordinary achievements in the commercialization of technol-

ogy or the development of human resources that foster technology
commercialization. George was, at the time, director of the IC2

Institute at the University of Texas at Austin. In 1977, he founded
the IC2 Institute at UT Texas, which is an international research
center for the study of innovation, creativity and capital.
1994: Litigation Continues and an Earthquake

Disrupts Some Operations
In 1994, certain of the company's legal problems were settled

by the company to avoid the risk and expense of further litiga-
tion and to resolve them in the best interests of the company

and shareholders.
240
A further problem of a different nature occurred in this year

when a severe earthquake struck Cahfornia. Our Teledyne Elec-
tronic Systems facility was located at the epicenter of this quake at
Northridge, California, and sustained major damage. In addition

to the physical damage to the facility, power, water and phone
service were also disrupted and the facility was inoperative for
several weeks.Due to damage to roads and bridges, as well as to

their homes, many employees, including even the corporate staff,
were unable to report for work for several days.

During 1994, 25 Teledyne companies that were deemed of
low profitability or poor future growth potential were disposed
of by sale or closure. As was approved by the board in 1993, 65
companies with related products, technologies and markets were
consolidated into 18 and more than 1,000 additional administra-
tive positions were eliminated.
Because of reduced government spending on defense and the
winding down and restructuring of certain military programs,
sales in the aviation and electronics segment declined in 1994.
Specialty metals showed an increase of $57.3 million over the
previous year, but the industrial segment declined somewhat
due to reduced demand for military vehicle development and for
some commercial products. Consumer product sales increased
slightly, with improved profit, in spite of the cost of new prod-

uct development.
In September, Bill Rutledge announced that the Teledyne cor-
porate offices would be relocated to the 14th and 15th floors of
the South Tower, at 2049 Century Park East, consolidating all
West Coast corporate employees and departments in one loca-

tion. The move was planned to improve communications and
operational efficiency, as well as to reduce overall occupancy

costs. This move ended the company's occupancy of the 1901
Avenue of the Stars location, where Henry had directed the
growth and success of his company for 27 years from his famous
241
Distant Force
corner office. My office was adjacent to his on the 18th floor of
that building, which housed the main corporate offices, and the
17th and 19th floors had related offices and a fitness center. The
1901 building will always remain Teledyne's headquarters in my
memory, as I'm sure it does for all employees who had worked
there. We also had corporate facilities at 1925 Bundy Avenue,
and these were also moved to the new building.
It was in this year that I decided it make a payback

was time to
to the institution that had trained me and me on the course

set
of what 1 can only describe as a wonderful career. I made a land-

mark gift of six million dollars and pledged an additional two
million dollars through a challenge grant to further education
and research in electronic materials, to my alma mater, Carn-
egie Mellon University. It was used to construct a 70,000-square
foot-building named the George A. Roberts Hall. Teledyne also
established a $250,000 Challenge Fund, on a one-for-two match-
ing ratio, as an incentive for friends and supporters outside Tele-
dyne to contribute. The ultimate cost of the building was $16.6
million, of which the university raised an additional five million
dollars. It was finished and dedicated in 1999 and contains the
Singleton Room in Henry's memory, the most popular meeting
spot on the high tech campus.
Unwanted Overtures
For the first time in our history, after having successfully acquired
over 150 other companies, we became subjected to an unwel-
come takeover bid by another corporation. On November 28,
1994, the WHX Corporation, parent of Wheeling-Pittsburgh
Steel of Wheeling, West Virginia, under Chairman Ron LaBow,
had made an unsolicited merger proposal in which Teledyne's
stockholders would receive $22 per share, in a combination of
242
cash of $11 per share and the balance on a tax-free basis in a

WHX convertible preferred stock.
On December 19, 1994, we advised WHX that the Board
of Directors of Teledyne had conducted a careful evaluation of
factors and circumstances it considered relevant, including its
view that there was no significant value to Teledyne stockholders

associated with the proposed merger, and that the board unani-
mously concluded that it had no interest in pursuing the pro-
posed merger. It was pretty obvious to us that LaBow had his
eyes on our pension fund, which had a surplus of $928 million

and would have been useful to his company in meeting future
demands of the United Steelworkers Union at Wheeling-Pitts-
burgh Steel, which were pending in 1996. In the December 22,

1994, issue of the 'Wall Street Journal it was stated:
WHX expects higher pension costs in 1996 when it
negotiates a new contract with the United Steel Work-

ers Union ... WHX is currently hamstrung in the type
of pension plan it can offer because of an agreement
with the Pension Benefit Guaranty Corporation stem-
ming from its emergence from Chapter 11 bankruptcy
in 1991. The USW has indicated that it wants a much-
improved pension plan when that agreement expires in
1996.
As we stated in a letter to our shareholders on January 31,

our significant legal issues relating to the 1980s had largely been
resolved. We had tightened our business focus around those com-
panies with the most promising prospects by disposing of more
than 25 others. Our cost structure was also improved by con-
solidating the remaining 65 operating companies with like prod-
ucts and markets into 18 larger companies. This had helped us
eliminate a layer of corporate management and more than 1,000
administrative positions. The effectiveness of these changes
243
DistmmiFonx
became af^jareot in our fourth quarter results, which showed a

maiked iiii{xovement over past quarters, and we resumed pay-
meiic f)i quarterly dividends on our common stock.
XTHX's [Mincipal business, basic steel, is a highly cyclical
induscryand was coaqrfetely different from our businesses. There
lioald be no benefit to our aviation, electronics, industrial and
consumer businesses from such a merger. Even our metals busi-
nesses were completely different. WHX sold steels by the ton,
while our unique high-purity specialty- metal alloys are sold by
the pound to coaq>letely different markets.
Then, on December 21, after we had re^xxided negatively to
WHXs pfc^x>sal, they notified us that ihey were filing for fed-
eral antinust clearance under the Hart-Scott-Rodino Antitrust
Inqnovements Act <rf 1976, seddi^ clearance, which it subse-
quently received, to purchase up to $15 miUion worth, but less
than 15 percent, <rfTdedyne's outstanding common stock through

the open market or privafidy nôdated purchases or otherwise.
1995: We Leave the Defense Electronics Business

and Takeover Bids Continue
In this year, we aided our participation in the defense electron-
ics systems business with the cash sale of substantially all the
business and assets of Teledyne Electronics Systems to Litton
Industries in January'. This essentially ended the company's par-
ticipation in the very business area on wiiich Henry had founded
Teledyne. This sale did not include any of Teledyne Electron-
ics' real estate, and did not include that company's Lewisburg,
Tennessee, operations or its commercial encryption business.
This transacticm resulted in an after-tax gain of about S30 mil-
lion. This amount, in conjunction with the value of the retained
244
real estate, totaled well over half Teledyne Electronic Systems'

annual revenues.
Our main attention, however, continued to focus on the
WHX matter. On January 4, 1995, our Board of Directors
adopted a Stockholder Rights Plan intended to deter further
coercive and unfair takeover tactics, and to give the company's
Board of Directors the ability to respond, on the basis of the
best interests of Teledyne and its stockholders, to any unsohcited
takeover attempts. This was an action that had been adopted
by over a thousand other public companies in recent years. This
plan assured that any transactions involving our company would

be on terms that our board approved, and that would treat all
shareholders fairly.
In March, however, we hired Goldman Sachs & Company

and announced that we were soliciting offers for the possible sale
of the entire company. While several parties expressed interest in

acquiring certain of our individual companies, we didn't find any-
one interested in buying the company as a complete unit at that
time. We received and responded to inquiries on this matter from
several third parties other than WHX, but also gave them the
opportunity to respond as well. Our stock price jumped 1~ per-
cent immediately following our armouncement of mtent to sell.
WHX Corporation then launched a hostile proxy- effort

The
to replace our board members with members of the WHX
board, who clearly had a fiduciary dut>- to WHX shareholders
and not to our shareholders. At the same time, WHX made an
offer to buy Teledyne for S22 per share — S18 in cash and S4 in
WHX common stock. By attempting to act as both a and seller
an inside-track bidder for Teledyne, the WHX slate had a clear

and irreconcilable conflict of interest. Though Mr. LaBow had
expressed assurances that WHX was not intending to replace our
current management if a takeover were successful, we decided it
was prudent to protect our executive management by authorizing
245
Distant Force
a $26.8 million severance package for 260 of our management

executives.
In April, the Institutional Shareholders Services, one of the
nation's largest institutional shareholder advisory firms, recom-
mended to its clients that they vote to reelect Teledyne's current
Board of Directors and reject the two nominees of the WHX cor-
poration who were seeking to win seats on the Teledyne board.
Both of these men were WHX directors. Their report went on to
say that the current WHX offer was widely recognized as inad-
equate. Moreover, it stated, "WHX's conflict of interest should
not be ignored. WHX has every reason to press for a quick sale,
since Teledyne was emerging from a period when its performance
struggled under the weight of a mountain of government con-
tract litigation, a good portion of which has been settled. More-
over, the company's most recent quarterly report demonstrates
that the business is improving."
In spite of these recommendations, one of the WHX nomi-
nees, Mr. LaBow, was elected to our board. We still had six of
the seven seats on the board, and had received about 83 per-
cent of shareholder votes. This support by our shareholders was
undoubtedly influenced by the fact that our financial performance
had begun to improve through the hard work of our new execu-
tives and our employees. First quarter results, released just before
the annual meeting, showed a 160 percent increase in income

before special items and an 18 percent increase in sales.
We were still interested in selling Teledyne to the right buyer,
but the WHX offer was clearly below the company's value. Some
analysts, the Wall Street Journal reported at the time, had pro-
jected that our mix of aerospace, industrial and consumer opera-
tions could fetch as much as $2.1 billion, if sold piecemeal for top
dollar, or 80 percent more than WHX's $1.2 billion takeover bid.

Henry invited higher offers and said he was prepared to vote his
shares for the buyer if the price was high enough. We were actu-
246
ally having discussions with four different groups at the time. We

were in a favorable turnaround situation and we were determined
to judge offers on the basis of projected company earnings and
not on the results of the difficult period we had just emerged from.
However, we did not receive any adequate offers in our attempt to
sell the company, and we took it off the market in October,

At the same time, we were rapidly resolving the remaining
disputes with the Justice Department regarding certain contracts
with the Pentagon. In the end we paid more than $180 million in
fines and penalties to finally resolve these matters.
In spite of these problems, our operating companies contin-

ued to develop new business. One outstanding accomplishment
in this year was Teledyne Ryan Aeronautical's winning, along
with its four other team members, the coveted Phase II contract
for the advanced development and flight testing of the Tier II Plus
high-altitude endurance unmanned aerial vehicle. The team went

head-to-head with some of the most highly respected names in
the aerospace industry to make this win. The 31-month Phase II
contract was valued at $164 million and was expected to lead to
a Phase III development, which included the production of up to

eight additional UAVs.
As our original cadre aged, there were continuing retirements
of the "old guard." One of these was Stan Smalley, Teledyne
director of risk management, who retired on December 1 after
more than 32 years of service. Stan started out with Teledyne

Systems in 1963 and transferred to the corporate staff in 1965,
where, except for a three-year assignment with Teledyne Life,
he made significant contributions to the treasurer's department
through numerous assignments and responsibilities.
247
Distant Force
1996: Further Hostile Takeover Attempts
In February of this year, WHX made another unsolicited bid of

$1.78 billion, or $32 a share, for our company. The bid included
$22 in cash and the remainder in WHX stock. WHX also
announced that it intended to nominate a slate of directors at

our April 24 annual meeting, thus initiating another proxy fight.
This was WHX's fourth bid since November 1994. We were the
larger and more profitable of the two companies with a 1995 net
income of $162 million on revenue of $2.57 billion, or $2.88 per

share, versus WHX's net income of $78 million on revenue of
$1.36 billion, or $2.07 per share.
We again hired Goldman Sachs to help evaluate the new bid
and to assist us in the event of a proxy fight. We had planned a
debt offering of $400 million, but Goldman Sachs advised us that

in spite of a favorable interest rate environment at the time, the
debt offering was not advisable because of the uncertainty that

the new WHX offer had created. This refinancing of our debt had
been projected to save the company some $10 million a year.
To counter this repeated attempt to acquire and control Tele-
dyne, we sent our shareholders a letter on March 26 presenting
our position. First, we rejected the WHX offer as wholly inad-
equate and far below the values that our business plan would pro-
duce. In mid-1994, our stock was trading at around $17 per share,
well below its intrinsic value. The 1994 price level reflected the
market's lingering concerns over effects of the government con-

tracting problems on the company's performance, as well as our
discontinuance of a dividend. But in 1996 at the time of our let-
ter, our stock was trading at approximately $29 per share. We felt
this was a tribute to the successful implementation of our business

plan and the resolution of our significant litigation problems.
Our 1995 results clearly demonstrated the strength of our
recovery. Revenues had risen 15 percent to $2.6 billion from
248
$2.2 billion in 1994, and income (absent unusual items) increased

65 percent to $131.7 million from $79.6 million in 1994. We
felt this momentum could be continued for the rest of 1996 and
beyond, and we approved an increased quarterly dividend of
37.5 cents, payable in cash.
By contrast, WHX's common stock had fallen from about
$19 to about $11 per share from mid-1994 to the time of our let-
ter, a decline of 42 percent. This was in spite of the $15 million

gain from the sale of 2 million shares of Teledyne stock they had
owned, and the fact that they had not had to pay for a defined
benefit pension plan for their employees, which was a remnant

of its bankruptcy. That would end when they would be required
to negotiate a new labor contract in the current year. Their net
income for 1995 was only $55.1 million compared to $63.2 mil-
lion in 1994.
We felt it was important that we have information on WHX's

business plans and financial projections, since a major portion of
the offer was in their stock, and this had not been provided.
Meanwhile, our board was still actively evaluating other
measures to boost shareholder value. One of these was selling
additional businesses that didn't fit future business plans or that
were only marginally profitable. We had recently signed a defini-
tive agreement, for example, to sell our combat vehicle operation

to the General Dynamics Corporation for $55 million.
The Friendly Merger
On April 1, just a little more than three weeks before our sched-
uled April 24 annual meeting, all of our problems with WHX
ended when we announced that we had reached an agreement
with the Allegheny Ludlum Corporation to make a strategic
merger of our two companies.
249
Distant Force
Dick Simmons was chairman and CEO of Allegheny Ludlum

and I had known him from the early years when he was a metal-
lurgist at Latrobe Steel. Just as I had worked my way up through

the ranks at Vasco, and then Teledyne, he had gone to Allegheny
Ludlum where he became chief metallurgist and finally president.
We had known each other through the metallurgical societies we

belonged to all these years. He let it be known through some bro-
kers that they might be interested in Teledyne and Bill Rutledge
was notified about that. I then called Dick and arranged to meet
him with Bill. Our discussion seemed promising, so I arranged a
meeting at the Los Angeles Country Club to see if we could reach
an agreement. Dick brought two of his top people, and of course
Henry and I were there with Bill Rutledge, Don Rice and some
of our directors including Diane Creel.
Rice and Simmons sat at one end of the table, and Henry and
I were at the other. I got Henry talking about his history and the
history of the company, because I thought this was a nice way for
Simmons and his people to learn about Henry and his company,
right from the founder's mouth.
Well, at any rate, we all became happy about the possibility of
making this friendly merger. The details were later worked out and
the new company was to be called Allegheny Teledyne, Incorpo-
rated. Under the terms of a definitive agreement that was approved

by both our Boards of Directors, Allegheny Ludlum sharehold-
ers were to receive one share of Teledyne stock for each share of
Allegheny Ludlum stock they held. Teledyne shareholders were to
receive 1.925 shares of the new company's common stock for each
of their Teledyne shares. The transaction was considered a pooling
of interest and was tax free to shareholders of both companies.
We projected that the new company would have combined annual
sales of about $4 billion. Because of this new situation, we post-
poned our scheduled April 24 annual shareholders' meeting.

In addition to the usual merger approvals, we were required
250
to meet Justice Department antitrust concerns because of the

overlap of certain of our operations. Both our Rodney Metals
operation and Allegheny's ultra-thin metal facilities were the
cause for concern, but the merger was approved by the Justice
Department without difficulty.
We both scheduled special meetings of our respective share-

holders, and shareholders of both companies voted overwhelm-
ingly for the merger.More than 95 percent of the votes cast were
in favor. Richard P. Simmons became chairman of the board of
the new company, and Bill Rutledge was made president and
chief executive officer.
The new company began its existence on August 15 of 1996,
with headquarters in Pittsburgh, Pennsylvania, with 24,000
employees. Renamed Allegheny Teledyne, Inc., it traded on the
New York Stock Exchange under the symbol ALT.
Don Rice, our president and COO, had earlier announced
his resignation as a director and officer, to be effective when the
merger was completed. He explained that he had plans to pursue
other interests. However, he did continue to provide consulting
services to Allegheny Teledyne, and served as a non-managerial
director of our subsidiary conducting European operations.

On February 12, 1997, Bill Rutledge also resigned his posi-
tion as president and CEO of Teledyne Allegheny. He cited fam-
ily and personal reasons that precluded his family moving to the
company's headquarters in Pittsburgh and his desire to pursue

other opportunities. Bill had never moved to Pittsburgh, choos-
commute to the company's Pittsburgh headquarters

ing instead to
from Los Angeles, where many of our diversified high technology
operations were still headquartered.
Judith Nelson, Teledyne's general counsel, had announced
her coming retirement in April of 1996, but had agreed, at
our request, to stay on as corporate secretary to assist with the
merger. Judy had given us 28 years of exemplary service and had
251
Distant Force
participated in some of the most important events in Teledyne's

corporate life. She joined Teledyne in 1968 as corporate coun-
sel, became corporate secretary in 1987, and was named gen-
eral counsel in 1990. As Bill Rutledge wrote in the Intracom
that announced her departure, "Her good advice, sharp humor,
and decades of experience will be sorely missed. We are fortu-
nate, indeed, that she has agreed to continue her availability for
a while longer."
From Merger to Spin-off
Of great importance at the time of the merger, we were able to

discuss with the management of Allegheny-Ludlum the question
of board members of the new merged company. Among those
included as new members of the combined companies was a
highly competent individual well known to both Dick Simmons
and myself. Dr. Robert Mehrabian"\ who now heads Teledyne
Technologies, Inc. He had been president of Carnegie Mellon
University for seven years, and also served there as professor of
materials sciences and engineering. He was an internationally
known authority on advanced technologies, and after joining the
board in 1996 he retired from the presidency of Carnegie in June
'"Dr. Mehrabian was named president and CEO of the new company at the time of
the spin-out, and was subsequently named chairman of the board of directors. He is
well suited to run this high technology organization. He holds bachelor and doctor of
science degrees from the Massachusetts Institute of Technology, and served there as
an associate professor in 1975. Later he was professor of metallurgy and professor of
mechanical engineering at the University of Illinois in Champaign-Urbana from 1975
to 1979. He is an internationally recognized authority on advanced technologies, and
served as director of the Center for Materials Science of the Department of Commerce's
National Institute of Standards and Technology, and was dean of engineering at the
University of California at Santa Barbara before going to Carnegie Mellon University
as its president in 1990. He holds eight US and more than 40 foreign patents, and has
authored 139 technical papers and edited six books on materials science and engineer-
ing. He has also received numerous awards and honorary degrees in the field of metals
and materials.
252
1997. Allegheny Teledyne Chairman Richard Simmons offered

him the position of senior vice president and segment executive
to run the new company's Aerospace and Electronics segment. A
year later he was placed in charge of all Allegheny Teledyne com-
panies other than the specialty metals operations. His new group
of companies had revenues of $1.7 billion in 1998.
Allegheny Teledyne was organized at that time in four seg-
ments: Specialty Metals, Consumer, Aerospace and Electronics,

and finally Industrial. By 1999, after considerable analysis, the
company decided that certain former Teledyne companies in the

last segment, which were deemed unprofitable or no longer in the
mainstream of the company's planned activities, were either closed
or sold. These included many of the industrial and metal working
companies that didn't fit easily with the others. The remaining
companies were reorganized into three segments. One segment
consisted of those in the aerospace and electronics field. A second
segment consisted of the consumer product companies, Teledyne
Water Pik and Teledyne Laars. And the third segment included
the original Allegheny primary metals producing companies,
combined with Teledyne's original specialty metals companies.
Finally, in 1999, it was decided that these three segments,

because of the diversity of their technologies and markets, would
be more successful as independent companies under their own
concentrated management. The consumer companies were then
spun-off and became Water Pik Technologies, Inc. (PIK); the
primary metals producing companies were renamed Allegheny
Technologies, Inc. (ATI), and the aerospace and electronics com-
panies became Teledyne Technologies, Inc. (TDY). Henry, know-
ing of this plan prior to his death that year, was, of course, very
pleased to have thename Teledyne retained and even to retain the
ticker symbol "TDY" on the NYSE in one of the new planned
companies. We were especially pleased to have Dr. Mehrabian
placed in charge and to have him move his new company to Los
253
Distant Force
Angeles (a return home for him) and occupy as headquarters the
offices and faciUties of the former Teledyne Packard Bell televi-
sion operation on W. Olympic Blvd. It was home

really a return
also for the longstanding Teledyne Controls company of Howard

Shanks' origin.
I think it might be interesting to follow briefly the accep-
tance of the separate company concept which management

the
of Allegheny Teledyne adopted in 1999. One way would be to
follow the reaction of investors to the three companies since the
November 29 date of the inception of Allegheny Technologies
(ATI), Teledyne Technologies (TDY) and Water Pik (PIK). On
November 29, 1999, when the three companies were created
by Allegheny Teledyne's directors, one share of ALT became
1/2 share of Allegheny Technologies (ATI), 1/20 share of Water
Pik Technologies (PIK) and 1/7 share of Teledyne Technologies
(TDY). On December 1, 1999, the stocks closed as follows: ATI
at $23.50, TDY at $9.62 and PIK at $6.94 per share. The accom-
panying chart brings the seven-year story up to the date of this
writing in November 2006.
DATE
The Allegheny Teledyne Equivalent number is found by add-

ing the ATI number divided by 2 to the PIK number divided by
20 and to the TDY number divided by 7.
Today many of the individual companies that were a part of

Teledyne are still in existence and operating successfully as a part
of those three new companies, each traded on the NYSE. AUvac
with its aerospace alloys is a significant contributor to Allegheny
Technologies (ATI), as is Wah Chang with its titanium activities.
Water Pik Technologies was purchased completely on April 11,
2006, by a group of investors who paid $27.75 per share for all
its shares. Teledyne Technologies (TDY) is composed of those

original Henry Singleton companies in aerospace electronics and
space technology including Continental and Brown Engineering.
Dr. Robert Mehrabian, president and CEO of Teledyne
Technologies, Inc., has asked me for an opportunity to write an

addendum to my story, detailing the activities and accomplish-
ments of his new company. His report follows on page 257.
The Final Curtain
In concluding, I also feel a certain sadness in the fact that the
malfeasance of a few people in the later years of our history over-

shadowed, for a while, the contributions our companies made
to our military and space programs, to our country's industrial
strength, and to the material sciences that have improved every

aspect of our lives. The exceptional achievements that I have
mentioned in this memoir are just a tiny percentage of what we
accomplished. It would take a book many times larger than this
one to detail all those accomplishments.
And so the story of the original Teledyne, Inc. (the Distant

Force) as conceived and built by Henry Singleton, and in whose
growth and management I participated with Henry for some 27
255
Distant Force
years, came to an end. There is certainly a great feeling of nos-
talgia for me in looking back on those exciting years and remem-
bering our many activities many wonderful people who

with the
contributed so much, and the problems we solved in building
a large and vital company that provided so much value for the
shareholders who stayed the course with us over the years.
256
A Teledyne Renaissance
Teledyne Technologies, Incorporated
by Robert Mehrabian
The original Teledyne Corporation no longer exists, but some

of the most significant core companies on which Henry Single-
ton founded his original venture are still alive and well. These
companies are now embodied in Teledyne Technologies, Incor-
porated, which was established in 1999. This new company is
now carrying on with many of the same technologies and serv-

ing many of the same demanding governmental and high-level
commercial markets that Teledyne originally served. It has also
added its own new technologies to serve expanding markets.
I had just retired from Carnegie Mellon in June 1997 when
Allegheny Teledyne chairman Richard Simmons offered me the
position of senior vice president and segment executive to run the

company's Aerospace and Electronics segment. A year later, I was
named executive vice president and segment executive in charge
of all the Allegheny Teledyne companies, other than the specialty
metals operations. My new group of companies had revenue of
$1.7 billion in 1998. In 1999 I was asked to become the president
257
Distant Force
of one of the three new pubHcly held companies being formed

from the merged form of Teledyne, Inc. and Allegheny Ludlum.
The new Teledyne Technologies Incorporated was formed
from the Aerospace and Electronics segment, a portion of the
units which I had been supervising. I was now committed to man-
age a publicly held corporation which included 18 of the original
Teledyne companies: Analytical Instruments, Battery Products,
Brown Engineering, Cast Parts, Continental Motors, Controls,
Electro-Mechanisms, Energy Systems, Geophysical, Geophysical
Instruments, Hastings, Kinetics, Lewisburg, MEC, Microwave,
Microelectronics, Relays, and Test Services.
These 18 high technology aerospace, electronics and instru-
mentation companies played a vital role in Teledyne's history and
success from its earliest days, and still do in the new organi-
zation. Teledyne Microelectronics, for example, was created by
Henry and Jay Last in the very first year of Teledyne's existence,
and brings some 45 years of experience and contributions in
this complex field. There are other illustrious members of the
new Teledyne, as well. Teledyne Brown Engineering is the sys-
tems engineering firm whose work with NASA goes back to the
earliest days of the nation's space and missile programs with
Wernher von Braun; Teledyne Controls for years has provided
data acquisition systems which monitor critical safety conditions

on commercial airliners and are used worldwide by virtually
every airline company; the former Teledyne CAE, now renamed

Teledyne Continental Motors, Turbine Engines, has produced
over 23,000 small turbine engines for unmanned air vehicles and
missiles including the Harpoon and JAASM missiles systems;
Teledyne Continental Motors, whose piston engines power over

100,000 general aviation aircraft, continues to be a leader in
its field. Other Teledyne companies in this group include those

that produce instrumentation for laboratory and field use, com-
ponents such as subminiature mechanical relays used in criti-
258
cal aerospace and missile applications, traveling wave tubes for

military countermeasure systems and communications, state-of-
the-art flexible printed circuits, microelectronic modules used
in applications ranging from spacecraft to heart monitors, and
geophysical products that serve the worldwide petroleum explo-
ration industry.
The common denominator of all these companies is that they
provide very highly engineered precision products for aerospace
and defense markets, as well as for high-end applications in tele-
communications, instrumentation, environmental and medical
markets. At the time Teledyne Technologies Incorporated was
formed, these original companies brought with them 5,800
employees, 1400 of which were graduate engineers and scientists,
as well as 700 patents.
At the time of the spin-off, Teledyne Technologies had sales
of less than $800 million and a market capitalization of less than

$280 million. While we had a number of strong businesses that
dated to the original Teledyne, these were not well understood by
many of the investors in Allegheny Teledyne, who were typically
more interested in the specialty metals product lines. The terms

of the spin-off also required that we issue new equity within
our first year in order to make it a tax-free transaction. We put
in place a muhipart strategy to strengthen our core businesses,
improve operational efficiency and grow both organically and

by acquisition, and to gain the confidence of existing and new
investors. This strategy, which we have continually refined and
updated, resulted in growth in sales by late 2006 to a run rate of
over $1.5 billion and a market capitalization of approximately

$1.4 billion. Our first order of business was to build an effective
management staff, which we did with a team of just 11 people.
In addition to building this core team, we spent considerable time
analyzing what we had, what fit together, and what our growth
strategies would be. We eliminated some unprofitable businesses
259
Distant Force
and restructured the remaining companies. For example, we sold

our casting businesses in 2000.
The result of this analysis was the reorganization of our oper-
ating companies into three segments: Electronics and Communi-
cations; Systems Engineering Solutions; and Aerospace Engines
and Components. We later added Energy Systems as a fourth
segment. The strategy we adopted is not unlike the strategy

Henry Singleton used in achieving the remarkable growth of the
original Teledyne —growth through acquisition combined with
strong internal organic growth.
So we actually started where the original Teledyne did, with
the same concepts for growth. The only real difference is that
we have been more narrowly focused on certain market seg-

ments that we believe we really understand and are strong in,
rather than Teledyne's earlier broad diversification. We have only

moved out of these known areas into adjacent technologies and
markets that are related to our core businesses. And because we
were operating from a smaller base, our initial acquisitions were
of modest size — companies in the $10 to $60 million range.
Also, typically, we have chosen to stay with many of those
highly specialized, high-tech niche markets with substantial gov-
ernment regulatory barriers that tend to discourage the entry of
competitive companies. Our companies have had many years of
experience in working within these regulatory requirements and
are comfortable doing so. Many of the products for these mar-
kets also require customization and specialization and are defi-
nitely not mass market products.

A key element of our strategy to make Teledyne Technologies
a stronger company has been our focus on continuous improve-
ment in our manufacturing capabilities. The first step was the
introduction of lean manufacturing principles and the installa-
tion of automated machining centers at Teledyne Continental
Motors, which resulted in significant improvements in produc-
260
tivity and product quality. We then extended the focus on lean

manufacturing and continuous improvement throughout the cor-
poration and have achieved similar positive results.
We have also endeavored to achieve lean management as well
as lean manufacturing. In our electronics segment, for example,
during our restructuring in 2001, the layer of management that
had originally run that operation was removed. The organiza-
tion was flattened so that the segment is actually run out of our
corporate office. This simplifies the organization and makes for
closer communications and more interaction between the indi-
vidual companies. We also encourage more joint development

and joint marketing activities. We have quarterly operations
reviews, which include all of our companies so that everyone
sees all the presentations, allowing our managers to interact and

share ideas.
Our focus on operational excellence is company-wide. To
encourage this, for example, we have a team of all the operations
managers of the electronics businesses participate in a meeting
that is held three or four times a year. These are the people who
are actually running the factories, and there is a very strong
focus on lean manufacturing where ideas, techniques and train-

ing methods are freely discussed and exchanged.
In essence, we've eliminated a lot of the perquisites and fancy
facilities that are unnecessary, and come back to our roots, try-
ing to run our business as a business should be run. We have a lot

of great businesses that we inherited from Henry Singleton and
George Roberts that have given us a good foundation to build
on, and we are doing that through our program of acquisitions.
After a rigorous effort a few^ years ago to determine where
our greatest strengths are, we decided that aerospace/defense
electronics and instrumentation products were the two areas we

should concentrate on initially in our acquisition efforts. So far,
the number of our acquisitions in these two areas has been about
261
Distant Force
equal. We have particularly worked on expanding our base in
defense microwave products, because this is an area that is not

easily commoditized. Our goal is to become a very strong sup-
plier to the first-tier aerospace and defense companies. There has

been considerable consolidation among those companies and
there are now fewer than there were a few decades ago. Many
of these companies have now focused on being systems integra-
tors, and no longer build as much of the exotic hardware for
their programs as they did in earlier years. This is where we see
great opportunity because we have the staff, the expertise and

the depth of experience to develop and build the very specialized
products these companies and programs require.
we added two companies in 2004 that comple-
In this field
ment Teledyne Microwave 's technologies. One was Filtronic Solid
State assets, formerly a unit of a UK company, and the other was
the defense unit of Celeritek. Both of these businesses were based
in Sunnyvale, California, near Teledyne Microwave's Mountain
View facility, and consequently we were able to integrate these
businesses with our Mountain View facility with a minimum

of disruption. In 2005 we acquired Cougar Components Cor-
poration, a company with a broad range of RF and microwave
amplifier products, and in early 2006 we added KW Microwave
assets, which specializes in high performance microwave filters.
The addition of these businesses expanded Teledyne Microwave's

product lines significantly, and has subsequently enabled Tele-
dyne to provide more highly integrated microwave subsystems to

our customers.
In 2004 we also acquired Reynolds Industries Incorporated,
a leading supplier of high voltage connectors and cable assem-
blies used in military radars, communication and countermea-
sure systems. A key product at Teledyne Reynolds, Inc. is the very
specialized high voltage cable assembly used in the Joint Helmet
Mounted Cueing System which is employed on the F/A-18, F-16
262
and F-15 aircraft. This system allows the pilot to automatically

cue weapons in the direction in which he is looking.
The other acquisition we made in aerospace and defense elec-
tronics was the Aviation Information Solutions unit of Spirent,
a UK company. This acquisition, which was made in 2003, was

integrated with our Teledyne Controls operation. It provides us
with the technology needed to introduce new Electronic Flight
Bag technology for commercial airlines. Airbus subsequently has
selected Teledyne Controls to adapt this technology for their air-
craft. It is expected to greatly simplify the workload of pilots by
eliminating the need for printed charts and manuals.
During 2006, we broadened our focus in the defense mar-
ket beyond electronics with the acquisition of CoUaborX, Inc. by
Teledyne Brown Engineering, Inc. CollaborX's strong presence
with the Air Force complements Teledyne Brown's efforts with
the Army and NASA and expands our ability to provide systems
engineering services throughout a system's acquisition lifecycle,

from concept development to sustainment and support.
The other product area on which we have focused is instru-
mentation, especially instruments for environmental monitoring

applications. This area ties in with the aerospace/defense mar-
kets in that most of what we do in both these areas involves
dealing with government regulatory agencies —the Department
of Defense, the Federal Aviation Administration, the Nuclear
Regulatory Commission, the Food and Drug Administration
(for our medical instruments), and the Environmental Protection
Agency. A lot of companies don't want to deal with these kinds of
requirements, and it does take specialized experience, so it tends
to discourage entry by other companies. We are experienced and

comfortable working under these requirements.
We have undertaken an aggressive program of acquisitions for
our environmental instrumentation business. Starting with our
original Teledyne Analytical Instruments Company, which spe-
263
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cializes in industrial gas analysis, we added Advanced Pollution

Instrumentation, Inc. for ambient air monitoring in 2001, and
Monitor Labs, Inc. for continuous emissions monitoring equip-
ment in 2002. These enhance our capabilities in the air quality
field, for both ambient air sampling and smokestack emissions,

to meet the requirements of the US Environmental Protection
Agency and similar requirements of Asian and European regula-
tory agencies.
In 2003, we expanded our laboratory instrumentation capa-
bilities with the acquisition of Tekmar Company, a provider
of laboratory organic analysis instruments, and in 2004 with
the acquisition of Leeman Labs' assets, which gave us inor-
ganic analysis technology. These are both related to the envi-
ronmental market since their instruments are used to prepare
and analyze water and soil samples for environmental pollution
applications.
Isco, Inc., a public company acquired in 2004, is our largest
instrumentation acquisition so far. Two-thirds of this company's
products are also in water quality monitoring, with water sam-
plers and flow meters particularly for wastewater applications.
Teledyne Isco also has a laboratory instrument product line used
in the pharmaceutical industry to purify samples in pharmaceuti-
cal development. This is one of our most rapidly growing prod-
uct lines.
During 2005, we acquired RD Instruments, Inc. to further
expand our position in the water market. RD Instruments, Inc.
(RDI) is a leading supplier of underwater acoustic Doppler veloc-
ity measurement instruments, with applications ranging from
profiling of currents in oceans and inland waterways to the mea-
surement of the speed of ships and underwater vehicles through
the water. Shortly after acquiring RDI, Teledyne also acquired
MGD Technologies, an RDI spin-off company that applies RDI's
patented Doppler profiling technology to the wastewater market.
264
The combination of acoustic instruments from Isco, RDI and

MGD allows Teledyne to offer its customers the broadest range
of products in the industry.
In early 2006, we again added to our water-related portfolio
of technologies with the addition of Benthos, Inc., which was a
public company. Teledyne Benthos' product lines include under-
water communication systems, remotely operated underwater
vehicles and high-performance hydrophones that are used in
seismic surveys for offshore drilling. Teledyne Benthos' products

are complementary to both Teledyne RDI's ocean current profil-
ing and through-water navigation systems and to Teledyne Geo-

physical Instruments' lines of arrays of hydrophones for offshore
oil and gas exploration.
In August 2006, we acquired a majority stake in Ocean
Design, Inc., a leading manufacturer of subsea, wet-mateable
electrical and fiber optic interconnect systems used in offshore oil
and gas production and for military applications. Ocean Design's

products are closely related to both our expanding line of under-
sea acoustic instruments and to Teledyne Reynolds' military
high-voltage connector and cables.

Just before the draft of this book was completed, we acquired
Rockwell Scientific Company (RSC), our largest and potentially
most significant acquisition. RSC, renamed Teledyne Scientific &
Imaging, LLC, is headquartered in Thousand Oaks, California,
and is a leading provider of research and development services, as
well as a leader in the development and manufacturing of infrared

and visible light imaging sensors for surveillance applications.
The imaging division, now known as Teledyne Imaging Sen-

sors, is based in Camarillo, California, and designs and manu-
factures highly specialized optical sensors and subsystems for the
infrared and visible spectrums, as well as advanced military laser

protection eyewear. The Imaging division is a leading provider
of highly sensitive space-based focal plane array sensors for both
265
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military and space science markets, and is developing new prod-

ucts that will significantly improve the ability of the US Army to
detect and identify threats on the battlefield. The research and
development division, now known as Teledyne Scientific Com-
pany, is principally based in Thousand Oaks, California, and
provides research and engineering services primarily in three
major market areas: electronics, materials technology, and infor-
mation sciences. R&D services' customers include government

entities, such as the Defense Advanced Research Projects Agency
(DARPA) and the US Air Force, as well as leading aerospace and
defense companies.
We were very interested in acquiring RSC because it possessed
advanced technology related to multiple Teledyne operations and
we believe that it will become an important core business of
Teledyne. For example, Teledyne Scientific Company's extensive
R&D capabilities for microwave and millimeter-wave semicon-
ductors, RF MEMS, and very high-speed mixed signal circuits
are very complementary to our existing microwave businesses
and will expand the range of products that we can provide to our
customers, Teledyne Scientific Company and Teledyne Brown
Engineering, Inc. have complementary capabilities for software
development, modeling and simulation, and government systems
engineering. Their materials science capabilities have linkages
ranging from improved thermal management of our electronic
products to high-temperature composite materials for our tur-
bine engines.
While the infrared sensors of Teledyne Imaging Sensors are
new to us, the customers and programs are not. Since Teledyne
is a preferred supplier to many defense prime contractors, we

believe we can help accelerate the development of next-genera-
tion tactical infrared sensors and subsystems for tactical applica-
tions. We also believe that our focus and operational excellence

will be of benefit to Teledyne Imaging Sensors as it continues to
266
transition from a manufacturer of low-volume specialty products

to a supplier for more mainstream defense programs.
When we look for new companies to acquire, we seek those
with good reputations in their field, good technology and strong
management, as well as a good fit with our existing operations.
We don't take them apart or move them to other parts of the
country. With few exceptions we operate them in place, mostly

with their existing management, in order to keep the people who
were running them in place for their expertise and knowledge.
So, very much in line with Henry Singleton's philosophy, we are
looking for nicely run, specialized niche businesses with good
technology, good people and excellent brand recognition. We
don't want to destroy this. In most cases the only change in their
identity is the addition of the name Teledyne in front of their
existing name. As in the original Teledyne's acquisition activities,
we provide a way for small companies to do the equivalent of an

initial public offering.
We've all learned a lot from Henry Singleton and George
Roberts. Take smaller bite-size pieces, learn to run them, inte-
grate them into our company, don't get too leveraged, and keep a
strong balance sheet, as he always did. There are a lot of oppor-

tunities out there, and we believe the new Teledyne will be able to
take advantage of them and continue with substantial profitable

growth in the years that are ahead of us.
267
268
Henry Singleton — Rancher
I think this is an appropriate place to conclude my discussion of

Teiedyne's progress through the years, and talk about Henry's
second most important career interest — his love of the land. Hav-
ing grown up on a cattle and cotton ranch in western Texas, he
never lost his love of the life of the rancher. As his wife Caroline
wrote in a note she sent me as we were preparing this book,

"...Henry was always drawn to the open western country, and
appreciated the values of the people who were part of that coun-
try." Along with other land he acquired in his lifetime, one of the
joys of his life was an 80,000-acre working cattle ranch known
as the San Cristobal Ranch, in the Galisteo Basin of north-cen-
tral New Mexico.

Part of a historic land grant that had passed through the
hands of many cultures — Native American, Spanish, Mexican
and Anglo-American — it was acquired by Henry and his wife
Caroline in 1986, and became the centerpiece of his other wide-

spread cattle operations. By western ranching standards, San
Cristobal is a fairly large "cow-calf" operation at the first level of
the livestock industry, running about 1,000 head of cattle.

Henry's daughter, Christina Singleton Mednick, wrote a
book San Cristobal: Voices and Visions of the Galisteo
entitled
Basin in which she describes the history of the ranch and tells a
detailed story of the day-to-day, season-to-season life on a work-
ing cattle ranch.
Far from being an absentee owner, or dilettante, Henry was
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active in the day-to-day management of his ranching interests,
just as he had been in the management of Teledyne.

In her book, Christina quotes her father, saying:
As a cow-calf producer, the ranch breeds cattle,
puts the mothers and calves on grass to graze, then

weans the calves at about six or seven months of age.
As Henry Singleton explains, "After weaning, the calf

goes on grass without its mother; the calf is referred to
as a 'stocker' at this point. If you have a cow-calf opera-

tion you can take the stockers to another pasture, but
most will sell their calves to other ranchers who special-
ize in running stockers. Historically, San Cristobal has

usually sold calves on weaning. I try to judge whether
it would be better to sell them now or keep them to sell
when they are larger. We've sold every time but once.
This year [1990] we'll hold them over again." Decid-
ing whether to keep or sell the weaned calves, which
usually weigh about 500 pounds, is one of the many
gambles the ranch owner must take, he said. "I decided
to keep our calves over this winter, but we won't know

until the future if it's right, if we'll have a hard win-
ter. We could have a balmy winter, they'd do wonder-
fully well and gain weight, the market could rise — or
the opposite could happen. You just gradually develop
some kind of feeling and analysis.
In a further quote from Christina's book, she writes:
For a rancher like Singleton, the basic equation is
straightforward: Your input is grass and the output is
beef. As on any ranch, however, much more is involved

in making ends meet. Initial costs of land, equipment,
and an original breeding herd, plus continuing costs of
270
management, labor, feed, bulls, and repairs must all be

figured into the balance sheet. Most ranchers would
agree that they are not in the business for profit alone.
Market fluctuations and unpredictable weather make
ranching a somewhat risky business, but the ranching
lifestyle is a powerful compensating factor. For Single-
ton, who grew up on a ranch near Fort Worth, Texas,
the greatest reward is "just being out in the country, and
the association with the land, animals and people." As
he puts it, "I like the feeling of participation, of taking
care of the land ... being one of the guys that helps to
take care of the land ... it's a nice feeling. I like to do it
under a normal constraint: take care of the land, and

have it in turn take care of the people who work on it."
A typical day for Singleton would begin at 5:30 or
6:00 a.m., the best time for telephone conversations

with his ranch manager. Harper McFarland, or the
managers of his other ranches. Singleton explains:
"We talk about any new facilities or replacements
or purchases . . . we'll talk about the cattle breeding pro-
gram ... We go over every aspect and plan a lot. The

pipelines, for example; are they wearing out? Do we
need to extend them? You've got to have wells, water
tanks, creeks; you have to work on them and expand
them."
Fie pays all the ranch bills and signs all the checks,
calling it "a form of discipline. Through doing the sign-
ing it's amazing how much you learn about the busi-
ness. There's a reminder of each event or action behind
each check." And sometime during each day he makes
time to look at trade journals or market reports. "It
influences your feel," he says, "what direction you're

going to go."
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The Galisteo Basin is the site of rich archeological informa-

tion about the earUest inhabitants of this area, and Henry and
his family were dedicated to the preservation of as much of this
irreplaceable history as possible. As Christina's book continues,

she relates:
The Galisteo Basin as a whole has been referred

to by the New Mexican media as an "archaeological
time bomb waiting to explode." Beside the six pueb-
los on San Cristobal land, there are four others in the
basin: Galisteo, San Lazaro, San Marcos, and Pueblo

Blanco. Archaeologist Jonathon Haas has called these
10 pueblos "an incomparable national resource sur-

passing Chaco Canyon, Mesa Verde, and any of the
known monuments." The large size of the pueblos,
most of which have two to three stories and thousands

of rooms, partly accounts for their significance. But
perhaps even more important to scholars is the fact
that some were inhabited during the Spanish period.
With proper excavation, these ruins could open a new
world of information about the Tanos people and their
lives, both before and after the Spanish entradas, and
also answer mysteries about the Pueblo Revolt and the
towns' ultimate abandonment.
Five of the six San Cristobal pueblos are now covered
with dirt and cactus. They are difficult to locate for the
untrained observer, appearing only as gentle mounds

slightly raised above the generally broken terrain. Any
illegal, would-be excavators would soon be observed by
cowboys on their rounds. But, at San Cristobal Pueblo,
some partially excavated walls are still barely visible.
This site, and its adjoining petroglyph area, is quite vul-
nerable. Visitors routinely bypass the "no trespassing"
272
signs to hike up to the intriguing rock art in its striking

setting. Most respect the Tanoan art and the land, but
the possibihty of vandahsm is disturbing.
Henry was most concerned about protecting these
sites, and the Singleton family is making plans to cre-
ate a conservancy to protect San Cristobal Pueblo and
its petroglyph site. The land will remain in its natural
state, but the area will be fenced and protected. Visi-
tors will be welcome, but they will be asked to sign in
and out, and pay a token fee toward the preservation of

the site. In this way the rock art may be saved from the
harm some other sites have suffered.
273
274
Henry Earl Singleton, 1916-1999
Eulogy delivered at All Saints Church, Beverly Hills, California
on September 8, 1999
By Dr. George A. Roberts
It is my honor to speak on behalf of thousands of employees, and

associates, and investors who join me as we memorialize Henry
Earl Singleton, our departed genius, our departed friend.
Henry and I met one July day, the 16th, I believe, in 1935 as
entering Plebes at theUS Naval Academy, He had finished two
years in a Texas college and I was a new high school graduate
from Pennsylvania. We were to room together at the Academy
and I must say he was a great help in allowing me to try to catch
up in mathematics. One studies math two years only, there, but
what is crammed in two years is usually done in three or four
years elsewhere. Henry, at the end of the two years was first in
our math class out of 820 students, and with his guidance this
youngster (the name for a sophomore at other places) even ended

in the top section. Henry's reward for being first was a dunking,
fully clothed, in the Severn River. The movie of this event, which
I took, was a tremendous success at several management meet-

ings in later years.
Henry worked for the Navy Department in Washington and
Europe and met and married a sweetheart from Boston in 1942.
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He graduated from MIT in 1940 with a master's in electrical
engineering, and in 1950 with a doctorate.

Howard Hughes hired him in 1951, along with a large selec-
tion of brilliant people. Henry told me stories of meeting How-
ard in the evenings at work. Dr. Simon Ramo was instrumental
in getting Henry to accept this position with Hughes.
North American Aviation got him next, and then Tex Thorn-
ton took him into the newly formed and fast growing Litton
Industries in Beverly Hills. Tex was a teacher of thrift and con-
servatism.
Henry Singleton at Litton became a vice president and general
manager of the electronics equipment division. He was respon-
sible for the idea and execution of a plan to develop an inertial
guidance system (both platform and electronics) with an accu-

rate two-degree-of-freedom gyro. Henry acted as chief manufac-
turing engineer and also chief salesman for the Litton platform
and won their first major order from Germany for their F-104s
in 1959. It is still the only major system in use on all military and
commercial aircraft today. The only change of note is the use of
laser gyros instead of mechanical ones in the 1980s.
But he and George Kozmetsky, a fellow associate at Litton,

were to leave Litton late in 1960 to form a company named Tele-
dyne (power through communications) to capitalize on the com-
ing revolution in which digital technology would replace analog
devices and systems in everything we could touch and imagine.
They would apply semiconductors and digital technology to
many fields of commerce. Their first step was to purchase a small
electronics company in Los Angeles, Amelco, bought Septem-
ber 29, 1960, which became the first office of Teledyne. A new
semiconductor operation was founded under this name and Tele-
dyne Systems Company was started to build digital computers
for military and commercial aircraft and space related projects.
Its first success was to win a major contract from the Navy
276
for an Integrated Helicopter Avionics System, IHAS: digital com-

puters made to read digital information about the navigation,
history of mission, condition of the aircraft and its needs for
maintenance. The "black box" was born. The company later was
to build the computers for practically all of our space launches.
Henry's company also grew in the '60s and '70s by acquisi-
tions, which included such important names as Ryan Aeronau-
tical, Brown Engineering, Continental Motors, Packard Bell,
Water Pik, Geotech and Geophysical Exploration companies and

many high tech specialty metal companies such as Vasco Met-
als, Wah Chang and Allvac. These metals companies were added
after Henry and I, following each other's careers by visit and
letter, began talks of combining Vasco Metals and Teledyne, an
event culminated on July 1, 1966.
Dr. Singleton added to the financial strength and stability of
Teledyne by acquiring several large groups of financial and insur-
ance corporations. They included Fireside Thrift, United Insur-
ance, Trinity Universal and Argonaut Insurance.
The company grew from $10 million in sales in 1962 to
$86 million in sales in 1965, to $257 million in sales in 1966, to
$1.6 billion m 1975 and to $3.5 billion in 1984.
Henry was much more than a salesman, mathematician,
engineer, inventor and chess champion. He was a student. An

observer of the history of manufacturing, of the progress and
growth of corporations from the days of Henry Ford, the growth
of General Motors, the manner of successful corporations in
growing by acquisition. He knew every step of the way of Jimmy
Ling, and others who were beginning to grow. The Littons,
TRWs, the LTVs, the City Investings, the Gulf and Westerns and
today's largest of all conglomerates. General Electric.
Henry, in the 1940s and early '50s,had spent days in the
offices of brokerage houses in New York and elsewhere watching
the ticker, thinking how to more efficiently get capital rollmg,
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how shares are valued and traded, how companies with a steady
growth rate are rewarded with an ever increasing Price/Earnings
multiple.
But on the way, Henry retold me of the GM story— reported
by none other than Alfred Sloan in a 1964 book. GM had no
financial connections in 1919 and suffered a failure of a deben-
ture offer. Bailed out by the DuPonts, it was a near disaster. Get a
strong national reputation with some financial institution owner-
ship, Sloan advised, and Henry did.
Henry made me preach and teach ethical behavior in every
way in every day in every meeting that we held. Arthur Rock,

who assisted in the early financing of Teledyne, had this to say
in 1987 in the Harvard Business Review: "Henry reminds me of

de Gaulle. He has a singleness of purpose, a tenacity that is just
overpowering. He gives you absolute confidence in his ability to
accomplish whatever he says he is going to do. Yes, he is rather

aloof, operating more or less by himself and dreaming up ideas
in his corner office."
Let me tell you this: That corner office produced a cornuco-

pia of ideas.
Dr. Singleton was an early pioneer in repurchasing stock in
his own company to improve shareholder value, and also a pio-
neer in the recently popular spin-off technique to provide share-

holders a choice of concentration of their holdings in areas of
their greatest interest.
On the first point of his creativeness: repurchasing stock.

We went from 96 million shares to 15 million shares in 1984.
The stock was his baby and a protected one in our corporate
culture. He was very private about things of critical importance
to the stockholding community. He shared his intimate strategy
with everyone, but only when it was appropriate, often telling
us all what had just happened. The stock, offered first in 1961
(5 million shares), sold for $1.50 per share in 1963, and reached
278
a high of $302 in September 1984, and then a high of $367 in

1986, just before the first of our spin-offs.
The buys were 8.9 miUion shares
October 1972;at $20 in
1.64 million shares at $14 in January 1974; 4 million shares at
$20 worth of 10 percent debentures in June 1974; 1.9 million
shares at $16 worth of debentures in December 1974; 3.6 million
shares at $18 cash in May 1975; 2.5 million shares at $40 in Feb-
ruary 1976; and 8.7 million shares at $200 in May 1984.
To pursue the second pioneering event, he split Teledyne, Inc.
into three groups, and today Argonaut Group and Unitrin are
independent publicly owned companies and Teledyne has joined
with Allegheny Ludlum to become Allegheny Teledyne, Inc.
Henry resigned as an employee of them in 1986. He con-

tinued as a member of the Board of Directors of Argonaut and
Unitrin and until 1997 of Allegheny Teledyne.
Teledyne today is managed by others and is basically in three
pieces — all of them successful. The value Henry made for all of
us has still continued to increase. Before the spin-off of Argonaut
in 1986, the high point in Teledyne value was $367 per share.
Unitrin was spun off in 1990, and today the combined value, on
July 8 of this year, was $691 per share.
The man we memorialize today was born in Haslet, Texas, in

1916 on November 27 on a ranch where his father raised cotton
and cattle. Haslet is about some 20 miles north of Fort Worth. As
you may know, the later world of MIT, USN, Hughes, Litton and
Teledyne — which we spent 49 years together friends and
in as
associates — have not the removed in great man from

least this his
love of ranching, cattle and the Great West. I even had to receive
a request from the general manager of the Los Angeles Country

Club, a club of which I was president and to which Henry and I
we were both Los Angeles at the
shared luncheons every day in
same time, that I remind Mr. Singleton of the rule that one did
not really wear jeans to lunch.
279
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As the third largest land owner in the United States today,

mostly in California and New Mexico, he still had an occasional
brush and contact with a cow, be it mother, father, son or daugh-
ter. You know the saying: You can take the boy out of Texas, but
never Texas out of the boy.
We have lost a genius. Heaven has just gone digital, and, I
know, is full of Apples named Macintosh.
Eulogy delivered on September 8, 1999

Remembering Henry Singleton
By Simon Ramo
Rarely do you meet a total stranger and instantly know that you
will come to admire that person. That happened to me when I
first shook hands with Henry Singleton. It was a half century
ago at the Massachusetts Institute of Technology, where I came

to recruit doctorate degree graduates in engineering and science.
The dean at MIT gave me the records of all graduates and a photo
of each. The graduates all looked the way usually engineers do
except one. He was really good looking. And something else: His
grade chart was particularly crowded. All the other graduates
grades were like 80 or 90 —two digits. Henry Singleton's grades:
everywhere 100 — three digits squeezed into the spaces for only
two. For every course he took, every final exam — 100 — perfect!
This fellow, I thought to myself, what with his good looks and
his academic record, surely will have a swelled head. But when he
entered the room, his manner, that countenance of quiet dignity
and gentleness and kindly intelligence, with no ego — those domi-
nant aspects of Henry's personality took over.
280
While the other graduates wanted to deHver prepared recitals

of their accomplishments, Henry asked questions: What were we
up to in Southern California? Why? And why there? How did the
projects come about?
Henry accepted the offer, came west, and began an engineering
career. Had he chosen to remain in engineering his career would
most certainly have been a distinguished one. But an unexpected
opportunity turned up that triggered and uncovered a surprising
dimension of Henry's makeup — to create a new company that
would find, acquire, merge and manage other companies. Here
he exhibited extraordinary talents even he could not have fully
known he possessed. As a chief executive officer he now applied

his powerful analytical strengths in novel ways to research and
assess the true values of companies, their stock prices, their com-
petition, their profit and growth potentials. With his stand-up
desk and his computer, he became a whole tree-full of owls of
wisdom about corporations and markets.
Henry was not your ordinary CEO. He constantly frustrated
the world of Wall Street and business media by ignoring them.
They were used to businessmen anxious to be interviewed, to be
written about —to tout their companies. By accompanying his
phenomenal business success with a preference for anonymity,
he mystified them.
Not surprisingly, as his talents in analytical business decision
became known, many assumed he was a purely numbers guru,
not interested in the people factor in investments. Not true! I cite
an example: Years ago, technology advance suddenly made pos-
sible low-priced, high-power computers that millions could buy.
Numerous companies were started to produce them. Most failed.
Not the one Henry helped to finance. He invested in Apple.
"How, Henry," I asked him later, "with all these new com-
puter start-ups looking alike— did you pick Apple that emerged
as a huge success with enormous gains for the early investors?"
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"Well, Si," he replied, "I figured most of these millions of

expected potential computer customers would at first be intimi-
dated by computers. But, could anyone be intimidated by a com-

puter named Apple?" Besides, he said, "All the others, except
Apple, if they failed, would just walk away. Apple's founders, I
noted, had mortgaged their homes to the hilt and borrowed heav-
ily from their parents, their brothers, sisters, aunts and uncles,
and grandparents and cousins, and they plowed every cent into
the company. They just had to make good!""
All who knew Henry well learned that what you saw in his
peaceful face, manifesting ready and deep understanding, is what

you got in his interest in you. You felt the warmth of friendship
and sincere consideration underneath that mien of reserve. If in
his passing we now feel a sadness, a sense that we shall miss

his presence, this is perhaps a proper price that we must pay to
compensate for the enrichment of our lives that knowing him has
yielded us.
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George A. Roberts
George A. Roberts was born in Uniontown, Pennsylvania, on

February 18, 1919. He was raised in Point Marion, Pennsylvania,
atown of 2,500 people located near the West Virginia border.
"The town," he said, "was comprised mostly of Belgian and Ital-
ian immigrant glass workers. My close friendships, the town's
excellent school system, and its diversified population and reli-
gious backgrounds, all resulted in my growing up with many

valuable and rich memories."
He entered the United States Naval Academy at Annapolis in
1935. He later transferred to the Carnegie Institute of Technol-

ogy (now Carnegie-Mellon University) in 1937 where he stud-
ied metallurgical science and received a D.Sc in that subject in
1942. While at Carnegie-Mellon he became associated with the

Bell Telephone Laboratories as a laboratory technician where he
became familiar with many advanced metallurgical techniques,
including the vacuum melting process, which later became widely
used in producing high-purity alloys.
From 1941 to 1966, he was employed by the Vanadium Alloys
Steel Company, also know as Vasco. From his first position as a
research metallurgist, he was promoted to chief metallurgist in

1945, became vice president-technology in 1953, and was elected
president in 1961. In 1964 he was made chairman of the board
of directors of that company.

He has been awarded many honors in his illustrious career.
He was elected a member of the National Academy of Engineer-
ing in 1978, and is also a Fellow of the American Society for Met-
als and the Metallurgical Society. He received the Gold Medal

of the American Society for Metals in 1977, and was president
of that society in 1954-55. He became president of the ASM
Foundation for Education and Research in 1955-56 and contin-
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ued to serve as trustee through 1959 and again in 1963 through

1964. He also served as chairman of the Pittsburgh Chapter of
the ASM, and on its publications committee, and was president

of the Metal Powder Industries Federation from 1958 to 1961.
He is a Life Trustee of the Carnegie-Mellon University, and

in 1980 was awarded the Carnegie-Mellon University Distin-
guished Achievement Award. In 1984, he received an award from
the National Conference of Christians and Jews for distinguished
service in the field of human relations, and the 1984 Americanism

Award from the Great Western Council, Boy Scouts of America.
He has published a number of technical papers and several
books on tool steels, and holds several patents on alloy steels.
His 27-year career as president and later chief executive offi-
cer of the Teledyne Corporation is detailed in this volume.
284
Appendix
Teledyne Financial Summary

1961-1965

Distant Force
Telcdyne Financial Summary

1971-1975
Appendix
Teledyne Financial Summary

1981-1985

Distant Force
C/5
Q
Appendix
and Dividends of
Splits
Teledyne, Inc. and Spin-offs
Year
Distant Force
Value of 1000 Shares of Teledyne Stock Acquired in 1966 from 1966 to 1975
1966 1967 1968 1969 1970 1971 1972 1973 1974 1975
Teledyne / Allegheny
Appendix
1976 1977 1978 1979 1980 1981 1982 1983 1984 1985
Teledyne /Allegheny
Distant Force
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
Appendix
1997 2003
Shares 119,839
Distant Force
Appendix
CD Contents
PDF FILE TITLE COMPANIES

FEATURED
1969
TdyAnnualJ969.pdf Superalloys Teledyne Allvac
Jets of Water tor Dental Health Teledyne Water Pik
Ttie Last Eight Miles: Doppler Teledyne Ryan

Effect Landing on the Moon
Review of 1969 Teledyne, Inc.
1970
TdyReport#1_1970.pdf Science and Cinematography Teledyne Camera

Systems
TdyReport#2_1970.pdf The Crowded Spectrum Teledyne Microwave
TdyReport#3_1970.pdf The Reproduction of Music Teledyne Acoustic

Research
TdyAnnualJ970.pdf Thin Metals: Ancient Art, Teledyne Rodney Metals

Today's Science
1971
TdyReport#1_1971.pdf Thermoelectrics: Direct Teledyne Isotopes

Converters of Heat to Electricity
TdyReport#2_1971.pdf AIDS: Aircraft Integrated Data Teledyne Controls

Systems
TdyReport#3J971.pdf CASTING: From a simple Teledyne Cast Products

process to a complex industry
TdyAnnual_1971.pdf Seismology: Science of Teledyne Geotech

Earthquakes and Exploration
295
Distant Force

FEATURED
1972
TdyReport#1J972.pdf LORAN: New Developments in Teledyne Ryan, Teledyne
the Ancient Art of Navigation Systems
TdyReport#2_1972.pdf Rubber Products: More than Teledyne Monarch

meets the eye in automobiles Rubber
TdyReport#3_1972.pdf Consumer Electronics: Growing Teledyne Packard Bell
Market for Technology
TdyAnnualJ972.pdf Engines with Propellers: The Teledyne Continental

Power in General Aviation Motors Aircraft Products
1973
TdyReport#1_1973.pdf Welding: Metallurgical Process Teledyne McKay,
That Puts it Together Teledyne Readco,
Teledyne Precision-
Cincinnati
TdyReport#2_1973.pdf Raydist: Electronic Roadmap Teledyne Hastings

For Coastal Waters Raydist
TdyReport#3_1973.pdf Uninterruptible Power Systems: Teledyne Inet

Fail-Safe Energy for Computers
TdyAnnual_1973.pdf High-Speed Steels: Cutting Edge Teledyne Vasco

for Modern Industry
1974
TdyReport#1J974.pdf Oil Exploration: Probing for a Teledyne Exploration

Dwindling Resource
TdyReport#2_1 974.pdf Drilling at Sea: Reaching for Oil Teledyne Movible

from Man-made Islands Offshore
TdyReport#3J974.pdf Workmen's Compensation: Teledyne Argonaut

Coverage & Costs Going Up Insurance
TdyAnnual_1974.pdf Zirconium: Fuel Container for Teledyne Wah Chang

Nuclear Power Albany
296
Appendix

FEATURED
1975
TdyReport#1J975.pdf Microelectronic Hybrids: Teledyne Semiconductor

Stamp-Size Supercomponents
TdyReport#2J975.pdf Friendly Explosives: Saving Teledyne McCormicl<

Lives in Aircraft Selph
TdyReport#3_1975.pdf Job Corps: Helping Youth Build Teledyne Job Corps

Brighter Futures
TdyAnnualJ975.pdf Industrial Engines: Muscle for Teledyne Wisconsin

the World of Work Motors
1976
TdyReport#1J976.pdf The Instrument Makers: From Teledyne Gurley
Surveying the Old West to
Mapping the Moon
TdyReport#2J976.pdf Tungsten & Molybdenum: When Teledyne Tungsten

the Going Gets Hot
TdyReport#3J976.pdf Life Insurance: Family Security United Insurance

and Investment Capital
TdyAnnual_1976.pdf Technology: Then and Now Teledyne, Inc.
1977
TdyReport#1_1977.pdf Analytical Instruments: Finding Teledyne Analytical
Needles in Chemical Haystacks Instruments
TdyReport#2J977.pdf Space Navigation: Guiding the Teledyne Systems

Way into Space
TdyReport#3_1977.pdf Dental Health: Better Care for Teledyne Dental

More People Products, Teledyne
Opotow, Teledyne Getz
TdyAnnualJ977.pdf Water Pik: From Better Oral Teledyne Water Pik

Hygiene to Good Clean Fun
297
Distant Force

FEATURED
1978
TdyReport#1J978.pdf Aerial Mapping; Faster TeledyneGeotronics
and Better with Computer
Techniques
TdyReport#2J978.pdf Urban Waste: Turning a Problem Teledyne American

into a Valuable Resource Ecology
TdyReport#3_1978.pdf Screw Threading: An Ancient Teledyne Landis Machine

Idea Vital to Modern Technology
TdyAnnualJ978.pdf The Aerospace Metals: Teledyne Allvac

Superalloys and Titanium
1979
TdyReport#1J979.pdf Pipeline Controls: Getting Oil Teledyne Geotech
and Natural Gas to Market
TdyReport#2_1979.pdf Fluid Power: Putting Pressure Teledyne HydraPower,

to Work Teledyne Sprague,
Teledyne Linair,
Teledyne Republic
Teledyne Farris
TdyReport#3J979.pdf Radar: Sensing the Unseeable Teledyne MEC,

Teledyne Microwave,
Teledyne Micronetics,
Teledyne Electronics
TdyAnnual_1979.pdf Energy: Fueling Spaceship Earth Teledyne

for the Eighties
1980
TdyReport#1J980.pdf Columbium: From Teledyne Wah Chang
Superconductivity to Super Albany
Computers
TdyReport#2J980.pdf Hi-Fi: The Art of Music Teledyne Acoustic

Reproduction Goes Hi-Tech Research. Teledyne
Packard Bell
TdyReport#3J980.pdt Mining Tungsten: From Glowing Teledyne Tungsten

Ore to Versatile Metal
TdyAnnual_1980.pdf Remotely Piloted Vehicles: Teledyne Ryan

Those Ingenious Flying Aeronautical
Machines
298
Appendix

FEATURED
1981
TdyReport#1_1981.pdf Truth in Radiation: A Matter of Teledyne Isotopes

Accurate Measurement
TdyReport#2_1981.pdf Relays: Thriving in an Teledyne Relays

Ultraminiature World
TdyReport#3J981.pdf Heating Water: For Health and Teledyne Laars

Home
TdyAnnualJ981.pdf Turbine Engines: Making Them Teledyne CAE
Smaller in Size and Cost
1982
TdyReport#1J982.pdf Aircraft Ground Support; Saving Teledyne Inet
the Airlines Millions
TdyReport#2_1982.pdf Mixing: A Fine Blend of Art and Teledyne Readco

Science
TdyReport#3_1982.pdf Flexible Printed Circuits: The Teledyne

Space Age Connection Electromechanisms
TdyAnnuaL1982.pdf Systems Engineering: Creating Teledyne Brown

Complex Systems for the 90s Engineering
1983
TdyReport#1J983.pdf Drafting: Designs To Build By Teledyne Post
TdyReport#2_1983.pdf Stress Analysis: How Much is Teledyne Engineering

Enough? Services
TdyReport#3_1983.pdf Rubbers Metal: Working Teledyne Monarch

Together in Automobiles Rubber
TdyAnnual_1983.pdf Electronic Counter Measures: Teledyne MEC

Protecting Friendly Forces
299
DistJfJt Force

FEATURED
1984
High Tech Wire: Taking the Heat Teledyne Thermatics
Safely
TdyReport^^:_ rl- The Ladle and the Hammer Teledyne Portland Forge.
Casting and Forging Iron and Teledyne Casting Service
Steel
Tdyneport#3J984^ Airframes: Structures for Teledyne Ryan

Aircraft Aeronautical
TdyAnnual_1984.pdf High Performance Metals: Teledyne Allvac

Tough Alloys for Tough
Envirofunents
1985
-i'J985.pdf Airline Communications: The Teledyne Controls
Digitai Connection
An Ideal Package: A Look at Teledyne Packaging

Collapsible Metal Tubes
Tdyfteport#3_1985.pdf Water and Hygiene: Products Teledyne Laars

For Personal Care
T0yAnnuai_1985.pot Star Wares: Products & Teledyne Brown.

Services for Space Teledyne Geotech,
Teledyne Hastings
Raydist
1986
TdyReport#1_1986.pdf IF: Electronic Passwords for Teledyne Electronics
Aircraft
TdyReport#2J986.pdf Radon: Measuring It From the Teledyne Isotopes

Ground Up
TdyRepoft#3_1986 odf Bent for Strength: Lightweight Teledyne AeroCal,

Metal Aircraft Structures Teledyne Metal Forming
TdyAnnuaJ_1986.pdf Liquid Cooled Voyager Engine: Teledyne Continental

Around tfie World Nonstop in Motors Aircraft Products I
9Days
300
Appendix

FEATURED
1987
TdyReport#1J987.pdf Microelectronic Hybrids: State Teledyne Crystalonics.
of the Art 1987 Teledyne Semiconductor
TdyReport#2_1987.pdf Integrated Circuits: Bridging the Teledyne Solid State.

Analog & Digital Worlds Teledyne
Microelectronics
TdyReport#3J987.pdf Composites: Ultra-light Teledyne Ryan

Structures for Aircraft Aeronautical
TdyAnnualJ987.pdf New Unmanned Airplanes: Teledyne Ryan

Advanced Developments Aeronautical
Expand Capabilities
1988
TdyReport#1J988.pdf Superconductivity: The Heating Teledyne Wah Chang
Up of a Supercool Technology Albany
TdyReport#2J988.pdf Doppler: Making New Waves in Teledyne Ryan

Navigation Electronics
TdyReport#3J 988.pdf The Inner Zone: Defending Teledyne Systems

Aircraft Carriers
TdyAnnualJ988.pdf Crash Fire Rescue Vehicles: Teledyne Continental

Getting There Faster With More Motors General Products
1989
TdyReport#1J989.pdf Aircraft Ground Power Systems: Teledyne Continental
New Turbine Technology Motors Aircraft Products
TdyReport#2J989.pdf Dies and Molds: Making the Teledyne Efficient

Tools That Make the Cars Industries
TdyReport#3J989.pdf Instruments: Measuring Wear/ Teledyne Taber

Measuring Pressure
TdyAnnualJ989.pdf Seismology: Monitoring Teledyne Geotech

Tremors and Treaties
301
Distant Force

FEATURED
1990
TdyReport#1J990.pdf Hi-E: New Name For Energy Teledyne Laars
Saving Water Heaters
TdyReport#2_1990.pdf Analytical Instruments: Tools Teledyne Analytical

for Chemical Detectives Instruments
TdyReport#3J990.pdf Reverse Osmosis: Clean, Clear Teledyne Laars

Water for the Home
TdyAnnualJ990.pdf RVR Systems: Measuring Teledyne Controls
Airport Visibility
1991
TdyReport#1J991.pdf Monitoring and Communicating Teledyne Controls

In-Flight Aircraft Conditions
TdyReport#2_1991.pdf Forging Metal: High Technology Teledyne Portland Forge

for an Ancient Art
TdyReport#3_1991.pdf Casting Iron: Competing in the Teledyne Casting

International Market Services
TdyAnnual_1991.pdf Rolling Premium Alloys: A New Teledyne Allvac

High Tech Mill
1992
TdyReport#1J992.pdf Flexible Printed Circuits: The Teledyne
Commercial Connection Electromechanisms
TdyReport#2J992.pdf Job Corps: Training for the Teledyne Economic

Future Development
TdyReport#3_1992.pdf Growing Crystals in Space Teledyne Brown

Engineering
TdyAnnuaL1992.pdf The Ryan Story 1922-1992 Teledyne Ryan

Aeronautical,
Teledyne Electronics
1993
TdyReport#1J993.pdf Monitoring Pipeline Networks Teledyne Geotech
TdyReport#2_1993.pdf Wireless LAN Technology Teledyne Microwave
TdyReport#3J993.pdf HUMS: Health and Usage Teledyne Controls

Monitoring System
TdyAnnuaL1993.pdf Saving Lives: From Aerospace Teledyne McCormick

to Automobile Airbags Selph
302
Appendix

FEATURED
1994
TclyReport#1J994,pdf Mass Spectrometry; Analyzing Teledyne Electronic
the Molecular World Technologies
TdyReport#2J994.pdf Collapsible Tubes: They're Teledyne Packaging

Everywhere
TdyReport#3J994.pdf Teledyne Water Pik Teledyne Water Pik
TdyAnnuaL1994.pdf Biomedical Implants Teledyne Allvac,

Teledyne Wah Chang
Albany
1995
TdyReport#1_1995.pdf Teledyne Specialty Equipment's Teledyne Princeton
Piggy Back Material Handlers
TdyReport#2J995.pdf Teledyne Rodney Metals: Teledyne Rodney Metals

Thinner, Flatter, Wider...
TdyAnnual_1995.pdf Teledyne Today. Repositioned Teledyne, Inc.

for Profitable Growth
All Product Summary

TdyProfile.pdf All companies
303
Index
American Safety Table, 99

American Society of Metals, 27, 50-
ACARS, 159
51,56,283
A. H. Wirz Company, 29, 98
analytical instruments, 71, 297, 302
acquisitions, 2, 8
Andrews, John, 55, 141
early years, 17-126
Apple, ii, 60-61, 82, 105, 116, 281-
Teledyne Technologies, 261, 263
282
Adcom, 70
AquaTec, 94
Advanced Pollution
Instrumentation, 264
AR, 95, 133,225
aircraft ground support, 299 Argonaut Insurance, 101, 103, 107-

108, 111, 125, 139-143, 145,
aircraft structures, 300
152,158, 196,205,223,228-
airframes, 73, 184, 300 230, 277, 279, 289, 292-293, 296
Allegheny Ludlum, 249-250, 252, Armetco, 52
258, 279
Arrasmith, Bill, 35
Allegheny Steel, 125
Ash, Roy, 9
Allegheny Technologies, 78, 125,
assets
253-255 1961-1965,47,285
Allegheny Teledyne, 95, 185, 250- 1966-1970, 129,285
1971-1975, 151,286
251,253-255,257,259,279
1976-1980, 170,286
Amelco, 10, 15, 18-19, 25, 31, 62, 1981-1985, 194,287
111, 130,276 1985-1990,224,287
American Ecology, 191, 223, 298, Automated Specialties, 32, 190
also see US Ecology. Aviation Information Solutions, 263
American Graduate School of
International Management, 147
304
Index
B Carnegie Mellon, 148, 208, 242,

252, 257, 283-284
Bailc, Dick, 59
Carnegie Tech, 48-49, 51
Bailey, Fred, 62
Cary, Robert, 51
Baker, Berkley, 58, 111-112, 148,
cash dividend, 126, 199, 228
168,232,238
castings, 56, 68, 73, 79, 110, 150,
Baldini, Angelo, 154, 156, 190
159, 179, 187, 260, 295, 300,
Baiter, Bill, 5, 12
302
Bardeen, John, 5, 12
Cast Parts, 258
Battelle, 148
Casualty Insurance, 152, 155, 181,
Bean, Gordon, 205 187,211
Bell Foundry, 68 casualty insurance industry, 101,
Bell Labs, 5, 49, 52, 195,283 103, 139, 144-145, 187
Bell, Robert, 96, 154, 175 CD contents, 295-303
Benthos, 265 Celeritek, 262
Blitz, Marv, 35, 226 Century City, 10, 59, 67, 105, 144
Blue White Diamond, 93 Choudry, Aleem, 124, 288
Boeing, 24, 134-135, 153, 157, 182 Choy, Norman, 169
Bowley, Jack, 141-142 Cocking, Al, 42
Bowman, Lloyd, 51 Cohen, Morris, 208
Bowman, Thomas, 59 CollaborX, 263
Brattain, Walter, 5, 12 Collins, Jim, 125

Breland, Gordon, 186 columbium, 76, 167, 179, 193, 298
Brockway, 106, 157, 204 Continental Device, 14, 70, 130
Brown, Ed, 79 Cooperman, Leon, 230

BusinessWeek, 129 Corporate International Offices,
buyback, 120-122, 124, 136, 144, 168, 174
146, 152, 171, 187,210,288 Cougar Components, 262

Cox, Townsend, 98
Creel, Diane, 250
Cahouet, Frank, 240 Cummings, Milt, 83
California Thrift, 101 Curtiss-Wright, 105-106, 124, 157-

158,181,229
carbide, 78, 133
Czaus, Walter, 113
Carlyle Group, 95
305
Distant Force
D
D'Annunzio, Joe, 198 Fairchild Semiconductor, 11-13
DARPA, 266 Farinsky, George, 57-58, 65, 1 15,

143, 199
D. B. Milliken, 36
FETs, 33
Densalloy, 97
Filtronic Solid State, 262
Dental Precision, 93
financial controls, 114, 128
dental products, 92-94, 110, 297
Financial Indemnity, 103, 152, 211,
Denton, Betty, 10
229
dePoix, Vince, 149
Fine, Reuben, 4, 21
diazo printing, 81
Firebee, 134, 153, 182,232
dies, 50, 77, 79, 301
Fireside Thrift, 101, 108, 152,211-
diversification, 27, 67, 88, 100, 260
212,228,277
dividends, 120, 125-126, 128, 199,
flexible printed circuits, 259, 299,
204,211,224,287,289-293
302
Doppler technology, 130, 173, 182,
fluid power, 24, 298
227, 264, 295, 301
Forbes, 10, 22, 30, 102, 104, 115,
Dorricott, Bill, iv
121, 124, 169,203,233
Double Crown, 120
forging, 77, 177, 300, 302
drafting, 81-82,299
Fortune, 1,64, 124, 155, 157
Drake, Hudson, iv, 172, 184, 204,
Franks, Ted, 62
212,226-227
Frasher, Jim, 44
Draper, C.S., 6-7
friendly explosives, 297
Durbin, Ed, 22
Gates, Howard, 20
Emesco Dental, 93
General Electric, 3, 5, 8-9, 124, 277
Emptor Group, 87
General Motors, 8, 100, 277
engines, 89, 130, 132, 134, 151,
Geotechnical Corporation, 33, 42
163, 168, 181, 197,201,206,
219, 258, 266, 296-297, 299 Gerlach, Clint, 24
Erdley, Hal, 22 Getz, William, 92
Eriinger, Art, 92 Giardini, William, 83
306
Index
Gill, Jim, 49-51 Heroy, Bill Sr., 42
Glenn Pacific, 24, 33 Heroy family, 29
Good to Great, 125, 230 Himmelright, Robert, 29, 80
Grant, Doug, 205, 228 Hoerni, Joe, 12-14
Grant, Gus, 109 Holmlund, Art, 29, 34-35
Gray Marine Motor Company, 90 Hughes Aircraft, 5-6, 9, 88, 159,

183, 276, 279
Gray, Mike, 231
Hughes, Howard, 5, 276
Great Central Insurance, 102, 152
Grobe, Arthur, 51
I
group executives, 26, 30, 41, 44,
63, 65, 108, 114, 116, 190, 194,
IBM, 47, 120
217
IFF, 215, 300
IHAS, 36, 47, 57, 59, 120, 277
H
InstaPure, 94
Haas, I.e., 62 integrated circuits, 13-15, 19, 31,
Haas, Jonathon, 272 188,301
hafnium, 74-75, 149 internal growth, 15, 111, 118, 129,

171
Hall, Jack, 62
international marketing, 140, 166-
Hall, Robert, 242
169, 180, 213
Hamaker, Jack, 51, 56, 62
Intracom, 120, 146, 175-176, 185,
Hamilton, Jack, iii, 42, 124, 147-
190, 195,203,207,221,232,
148, 186,228
252
Handley, Inc., 18-19
investing, 60, 103, 105, 120, 144
Hanley, Tom, 169
Isco, 264-265
Harvard, 11, 87, 95, 129, 278, 288
Harvey Mudd, 148
J
Hastings, Charles and Mary, 71,
154 Jackson, Bob, 70, 87, 91
Hayden Stone, 10, 12-13, 60 Jerome, Jerry, 38, 106, 115, 117,
143-144, 152, 162, 199, 211, 229
heaters, water, 93, 131, 173, 194,
208,236,302 Johns, Ethel, 148
Herbert, Allen, 229 Johns Hopkins, 11
307
Distant Force
Jorgenson Steel, 106 LaHaye, Frank, 46
Julie, Loebe, 70 Lange family, 29
Last, Jay, iii, 11, 21-22, 60, 62, 69,
112,258
K
Latrobe, 2, 49, 56-57, 110, 250
Kaisel, Stan, 33
Leeman Labs, 264
Kaiser Electronics, 21
Lenhard, Walter, 161
Kanter, Earl, 22
Letts, Spencer, 57-58, 151
Katsuno, Pete, iv, 167
litigation, 217, 220, 240, 246, 248
Kaufman, Fred, 55, 172
Litton, 6, 7, 9-10, 20, 22, 57-58,
Kaufman, Larry, 22 90, 105-106, 124, 157, 174, 194,
Kelley, Andy, 161 209, 226, 229, 244, 276, 279
Kenco Company, 72 LORAN, 296
Kenco Power Presses, 72 Lou's Transport, 69
Kennecott, 158, 181
Kidde, 100, 106, 157, 204 M

Kiernan Optics, 29, 36-38
MAC, 61, 139
Kiernan, Russ, iii, 26, 29, 33, 36,
MacDonald, Angus, 27
63, 166, 168, 180
MacFarland, Harper, 271
Killen, Leo, 166
machine tools, 51, 68, 72, 79-80
King Metal, 68
Mahan, Bob, 98-99
King, Stephan, 108
malpractice, 111, 139, 141-143, 145
Kleiner, Gene, 12
management inventory, 30
Kozmetskey, George, vi, 9, 11, 15,
57-58, 233, 238, 240, 276
mass spectrometry, 303
matching gift program, 148, 154
Kulp, Larry, 190
Mattel, 65
Kuske, Al, 94
KW Microwave, 262 McGovern, Jim, 212

McGowan, Jim, 169
McGowan, Robyn, iv
McKenna family, 49-50, 53, 1 10

LA Herald Examiner, 158
McKenna, Roy, 51
LaBow, Ron, 242-243, 245-246
McVicker, Robert, iv
308
Index
Mednick, Christina Singleton, iv, 1, N

269-270
NASA, 25, 83-84, 135, 164, 179,
Mefco, 28, 67
183,193,258,263
Meglin, Linda, iv, 155, 168
National Medal of Science, 175
Mehl, Robert, 48-49, 208 48, 53, 149,
Naval Academy, 1, 3,
Mehrabian, Robert, iv, 125, 252- 212,275,283

253,255,257 228, 251
Nelson, Judith, iv,
MEMA, 130
net income
Mercury Transformer, 18 1961-1965,47,285
1966-1970,129,285
merger 1971-1975,151,286
Allegheny, 125,249-252 1976-1980, 170, 286
Continental, 91 1981-1985,194,287
Vasco, 40, 52-53, HO 1985-1990,224,287
WHX, 242-244 Nexus, 69
MGD Technologies, 264-265 Nisbett, Jim, 74
Michos, Themos, 151 Northrop, 185

microelectronic hybrids, 31, 297,
301
o
Miller, Avy, 93
Ocean Design, Inc., 265
MIT,4-7,9, 12,26, 195,208,276,
279-280 oil exploration, 43, 137, 296
mixing equipment, 79, 299 Olson Electronics, 95-96, 109, 133,

168, 174
molds, 301
297 optical encoders, 80
molybdenum, 75-76, 177,
Orbuch, Allen, 20-22, 194,226
Monitor Labs, 264
outstanding shares
Monolith, 70
1961-1965, 47, 285
Moqum,Joe, 83-84 1966-1970,129,285
1971-1975, 151,286
Morse, Stan, 62 1976-1980,170,286
Murray, Jim, 91 1981-1985,194,287
1985-1990, 224, 287
Mutchler, Dave, 174
309
Distant l-orcc
relays, 19, 35, 179, 216, 258, 299
remotely piloted vehicles, 298

Pacific Industrial Controls, 34-35
Reynolds Industries, 262, 265
Palmer Instruments, 18-19
Rice, Donald, 80, 237, 239, 250-
Parker, Earl, 175
251
p/e ratio, 29, 120-121
Richardson, Lynn, 91
Penn Valley Polymers, 98 Rieth, Bob, 212
Philbrick, George A., 70 Riley, Gary, 227
pipeline, 150,298,302 Rinsch, Charlie, 115, 117, 143, 199,
Post, Fred, 81 205
PowerPC, 61 Roberts, George A.
at Teledyne, 57-63
Powers, Roscoe, 23
at Vasco, 48-56
Prachar, Bill, iv, 191 biography, 283-284
businessman, 26, 90
Precision Investment Castings, 110
early years, 1-4
Precision Welding and Flexopress,
Rock, Art, 10, 12-13, 59-60, 82,
78 121,196,234,238,278
Preston Products, 98 Rockwell, 91, 166, 227
profit plan, 116-117, 173 265-266
Rockwell Scientific (RCS),
Pro Seal, 62 rolling mill, 78, 80, 234, 237, 302

Pyramid Insurance, 162 Rouse, Gene, 94, 174
rubber products, 80, 157, 296, 299
Rutan, Burt, 197
qui tam, 214 Rutan,Dick, 197
Rutherford, Bill, 90-91, 109, 212,

226
R
Rutledge, Bill, 80, 204, 225-227,
radar, 20, 3>5, 47, 130, 135, 182, 232-235, 237, 239, 241, 250-252
189,205,211,227,298 RVR systems, 302
Ramo, Simon, 5, 276, 280 Ryan, Claude T., 82, 85-87, 140,
Raydist system, 154 182
Rl) Instruments, 264
realignment, 195,237,239
Redemske, Ralph, 62
310
Index
Shockley, Jim, 5, 12
Shockley Transistors, 12
sales
Shower Massage, 94-95, 133, 174,
1961-1965,47,285
236
1966-1970, 129,285
1971-1975, 151,286 Simmons, Dick, 250-253, 257
1976-1980, 170,286 Singleton, Caroline, iv, 4, 269
1981-1985, 194,287
Singleton, Henry
1985-1990,224,287
early years, 1-8
San Cristobal, 1, 269-270, 272, 275 eulogies, 275-282
Sarofim, Fayez, 59, 196,234 rancher, 269-273
Schaefer, Karl, 194 Singleton, Will, iv, 61
Schirard, Joe, 186 Sky Magazine, 54
SEC, 106, 119 Smalley, Stan, 205, 247
seismic technology, 33 Smead,Joe, 20-22, 59, 96
seismology, 295, 301 Smith, Lynn, 110
Sell, Wendell, 96 Smithsonian Institution, 197, 201
semiconductor, 5, 9-17, 19, 22-23, Space Command, 83

27, 31, 33, 54, 60, 62, 67, 69-72, spin-offs, 3
130, 179, 188-189, 208, 266, 276 insurance, 196, 200, 228, 279,
Servo-mechanisms, 196 289
SETAC, 84 Spirit of St. Louis, 85, 140, 201
Sewart Seacraft, 29, 44-45, 89 Sprague, Robert, 25
Shanks, Howard, 22, 254 Spratt, Archie, 53
Shannon, Claude, vi, 26, 116, 195 star wars, 300
Shannon, Tom, 109 Steenberge, Bob, iv, 212
Shannon, William, 26, 72, 100, 196 Steitle, Jim, 41, 44
shareholder equity stock prices high, low, close

1961-1965,47,285 1966-1970,285
1966-1970, 129,285 1971-1975,286
1971-1975, 151,286 1976-1980,286
1976-1980, 170,286 1981-1985,287
1981-1985, 194,287 1986-1990,287
1985-1990,224,287 stock splits, 125-126, 289
ShiUito, Barry, 88, 140, 168, 171, stock value 1966-2005, 290-294
180, 194,224,230,285-287
311
Distant Force
stress analysis, 299 Teledyne Canada Mining Products,
Strong, Will, iv, 167, 169,213 68
Teledyne Canada Transport Group,

Sumitomo Klectric, 136
69
superalloy, 296
Teledyne Casting Service, 29, 78,
superconductivity, 298, 301
300
Teledyne Cast Products, 73, 150,
159, 295
Teledyne Charitable Trust

takeover bid, 242, 246
Foundation, 96, 154, 175, 198,
Tank Transport, 69 228
technical achievements, 193-194 Teledyne CME, 211
Tekmar, 264 Teledyne Columbia-Summerill, 78,
Teledyne Acoustic Research, 98, 80
131, 133, 174,225,295,298 Teledyne Components, 16
Teledyne AeroCal, 74, 179, 300 Teledyne Continental Motors, 85,
Teledyne Aerospace Systems, 86 89, 91, 108, 130, 134, 157, 163,
180, 196-197,206,212,232,
Teledyne AUvac, 27-28, 51-52, 55-
236,258,260,277,296,300-
56, 62, 67, 78, 141, 167, 177,
301
213,234,255,277,295,298,
300, 302-303 Teledyne Controls, 26, 34-35, 150,
Teledyne Analytical Instruments,

153,159,183,201,254,258,
263, 295, 298, 302
35,71, 137, 168, 172,258,263,
297, 302 Teledyne Crittenden, 23, 35
Teledyne Avionics, 156, 190 Teledyne Crystalonics, 33, 189, 301
Teledyne Battery Products, 258 Teledyne Dental Products, 297
Teledyne Big Beam, 24 Teledyne Economic Development,

160, 302
Teledyne Brown Engineering, 83-
85, 109, 112, 157, 178-179, 193, Teledyne Efficient Industries, 78, 301
211-212,231,236,255,258, Teledyne Electro-Mechanisms, 136,
263, 266, 277, 299-300, 302 211,258
Teledyne CAE, 91, 134-135, 151, Teledyne Electronics, 33, 214-215,
162,206,258,299 218-219,244,298,300,302
Teledyne Camera Systems, 179, 295 Teledyne Energy Systems, 135, 137-
Teledyne Canada Metal Products, 138, 165, 178,200,258,260
68,78
312
Index
Teledyne Engineering Services, 160, Teledyne Linair Engineering, 18-19,

299 24, 198
Teledyne Exploration, 44, 153, 178, Teledyne Lincoln Park, 78

296 Teledyne logo, 112
Teledyne Farris Engineering, 25, Teledyne McCormick Selph, 46,
298 157, 179, 212, 279, 302
Teledyne Firth Sterling, 50, 76, 78, Teledyne McKay, 27, 78-80, 163,
133 296
Teledyne Geotech, 29, 42, 150, 160, Teledyne MEG, 33, 150-151, 164,
168,186,201,228,277,295, 181, 193,211,258,298-299
298,300-302
Teledyne MECCA, 97-98, 154
Teledyne Geotronics, 42, 133, 198,
Teledyne Merla, 45, 112, 153, 201
298
Teledyne Metal Forming, 52-53, 62,
Teledyne Getz, 29, 93, 297
67, 138, 300
Teledyne Gurley, 80, 211, 297
Teledyne Microelectronics, 31, 164,
Teledyne H&H, 78 179,193,258,301
Teledyne Hanau, 93 Teledyne Micronetics, 20, 298
Teledyne Hastings Raydist, 71-72, Teledyne Microwave, 205, 211, 258,
153-154,258,296,300 295,298,302
Teledyne Historian, 148 Teledyne Minerals, 228
Teledyne Howell Penncraft, 78 Teledyne Monarch Rubber, 29, 78,
Teledyne HydraPower, 25, 214, 298 80, 157,225,296,299
Teledyne Imaging Sensors, 265-266 Teledyne Movible Offshore, 44-45,
62,83, 160,296
Teledyne Inet, 23, 35, 157, 296, 299
Teledyne Mt. Vernon Die Casting,
Teledyne Irby Steel, 78
78
Teledyne Isotopes, 131, 134-135,
Teledyne National, 156
137-138, 140, 149, 190, 197,
201,295,299-300 Teledyne Neosho, 219
Teledyne Job Corp, 297 Teledyne Opotow, 93, 297
Teledyne Kinetics, 23, 179, 258 Teledyne Osco Steel, 78
Teledyne Laars, 93, 95, 131, 172, Teledyne Oster, 78

236,253,299-300,302 Teledyne Packaging, 98, 163, 235,
Teledyne Landis Machine, 78, 298 300,303
Teledyne Lewisburg, 231, 258
313
Distant Force
Teledyne Packard Bell, 96-97, 109, Teledyne Scientific 6c Imaging, 265

131, 133-134, 160, 168, 175, Teledyne Semiconductor, 130, 188,
254, 277, 296, 298 211,297,301
Teledyne Philbrick, 69-70, 156 Teledyne Solid State, 301
Teledyne PICCO, 73, 110, 179 Teledyne Sprague Engineering, 24,
Teledyne Pines, 78 29, 135,298
Teledyne Pittsburgh Tool Steel Teledyne Stillman, 194

Wire,28, 55, 67 Teledyne Systems, 194, 215-216,
Teledyne Portland Forge, 77, 300, 219,276,295-297,301
302 Teledyne Taber, 72, 179, 301
Teledyne Post, 81-82, 156, 198, 299 Teledyne TAG, 189
Teledyne Powder Alloys, 77 Teledyne Technologies, 34-35, 83-
Teledyne Precision, 19 85, 125, 180, 252-255, 257-260,
293
Teledyne Precision-Cincinnati, 296
Teledyne Telemetry, 84
Teledyne Princeton, 303
Teledyne Thermatics, 179, 300
Teledyne Readco, 78-79, 140, 159,
296, 299 Teledyne Titanium, 28, 62, 141
Teledyne Relays, 35, 168, 216, 219- Teledyne Total Power, 168
220,258,299 Teledyne Tungsten, 297
Teledyne Republic, 25, 155-156, Teledyne Vascan, 67-69
298
Teledyne Vasco, 27-28, 48-58, 62,
Teledyne Research Assistance 67-69,75, 108, 110, 172, 177,
Program (TRAP), 147-148, 202, 196,213,233,250,277,283,
208-209, 228 296
Teledyne Rodney Metals, 56, 78, Teledyne Wah Chang, 74-76, 108,
251,295,303 131, 133, 149, 167, 187, 193,
Teledyne Rotolite, 81 255, 277, 296, 303
Teledyne Ryan Aeronautical, 85-92, Teledyne Water Pik, 94-95, 109,

108-109, 134-135, 140, 157, 159, 131, 133, 148, 153, 168, 174,
168, 170, 173, 180-185, 188, 186, 236, 253, 277, 295, 297,
201, 211-212, 219, 226-227, 231, 302-303
236, 247, 277, 295-296, 298, Teledyne Wisconsin Motors, 89, 91-
300-302
92, 163,297
Teledyne Ryan Electronics, 130, telemetry, 84, 201
173, 184,205,227,301-302
Test Services, 258
314
Index
Texas Instruments, 47, 120 Universal Cyclops, 52, 55
thermoelectrics, 295 Urdea, Mike, 62
Thibideaux, Murray, 62 US Air Force, 136, 140, 173, 181,

193,201-202,227,236,266
Thorndike,Will, 124,228
Thornton, Tex, 5-7, 58, 276 US Army, 25, 42, 84, 132, 154, 159,
180,231,266
threading, 79, 298
US Ecology, 190-191,279,
Tiara line, 130, 134
also see American Ecology.
Tidus, Dave, 22
US Job Corps, 160
Tokyo Sales, 167
US Navy, 25, 45, 47, 59, 86, 88, 92,
Tool Steels hook, 51, 196 97, 131, 134-135, 149, 151, 154,
tool steels, 54, 284 157, 163-164, 181-182, 206, 211,

214, 218, 227, 275-276
Trade Mission, 168-169, 180
Transistor Automation, 71
TRAP, see Teledyne Research

V
Assistance Program.
Vasco-MA, ii, 51
Trinity Universal, 101, 103, 106,
Vasco-Max, ii, 51
108, 152,211,228,277
Vasco Supreme, 51
Triple Crown, 119
VascoX-2,51
TRL Productions, 156, 168
Vaughn, Buddy, 141
TRW, 99, 106
Vie, Richard, 100, 229
tubes, collapsible, 98, 235, 300, 303
Vitesse, Lou, 69
TWT (traveling wave tubes), 33,
Voyager aircraft, 196, 201, 300
151, 181, 193,259
Voyager space mission, 164-165
u
w
UCLA, 148, 227
Wagner, Bill, 86, 140, 184
Unicoa, 101, 105-106, 143-144,
158, 161-162 Water Pik, ii, 94-95, 131, 133, 174,
186, 297, 303
United Insurance, 101, 103, 106,
108, 144, 161-162, 228-229, 277, Water Pik Technologies, 253-255,
297 292
Unitrin, 103, 107, 125, 224, 228- Watson family, 231
229, 279, 287, 289, 292-293 Watson, Mark, 231
315
Distant Force
Watson, Ray, 83-84 Wirz, August Herman, 98
welding, 140, 160 Wyer, Rolf, 212
welding products, 24, 27, 33, 79,

163,236,296
whistleblower suit, 214, 216, 219-
220 Yeager, Jeana, 197
Whitney, Roger, iv Yih, Steve, 75, 149
WHX, 242-246, 248-249
Wiikins, Rick, 186
Wilson, Teck, 6, 20-22, 62, 174,

zirconium, 74-75, 131, 149, 296
203
Zirnkilton, Frank, 79
Wimmersberger, Henry, 55, 62
Zodiac S.A., 95
wire, 52,79, 188,300
wireless LAN technology, 302
316
Dr. Roberts has searched I
archive of corporate documents

shareholder financial reports, recor
of management and board meetini
letters, drafts of speeches, the copio
notes that he personally kept during I
tenure as president and later CEO,
well as his own memory —to constru
this memoir. He describes the fii
decade of aggressive acquisitions ai

diversification; Henry's reasons f
adding financial institutions to f
highly technical mix; his controversi

program of aggressive stock buy-bacl<
the spin-off to shareholders of certa
entities which greatly broadened tht
flexibility in handling their investmen
(many of which still provide incon
and finally the difficult days
today); -
whistle blower suits, hostile takeov

attempts, and the final friendly merg
with Allegheny Steel Company.
Bob McVicker, who assisted E

Roberts in the production of th
volume, worked in Teledyne
corporate public relations office froi
1969 to 1979 where he wrote an
produced the quarterly shareholder
magazine Teledyne Report, aft(
which he continued to write th
tutorial articles for this publication o
a freelance basis into the early 1990'
These stories, which were intende
to give the non-technical shareholde
an understanding of the company
sometimes arcane technologies, ar
available on the CD enclosed with thi
volume. Bob is a magna cum laud
graduate of Brown University, and Pi-
Beta Kappa.
This book has been designed anc

produced by Linda Meglin o
Meglin Marketing Communication
of Cleveland Ohio. Linda worke(
for Teledyne for 20 years, and wa
President of the company's in-hous(
advertising agency TRL Productions.
Additional copies of this book

can be ordered online at
www.distantforce.com

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^i ',

The Building of a Corporation

Henry Siii^k'ton and Cicoij;c Kobcrts

From Annapolis, Henry went on to

pursue his interests in mathematics

where he developed a unique two

George Roberts, meanwhile, earned

over the years, agreed that a merger of

This book is George Roberts' memoir

With an introduction to Teledyne Technologies

By Dr. George A. Roberts

Vasco-MA © ATI Properties, Inc.

All rights reserved. No part of this publication may be reproduced,

Printed in the United States

This book my memoir. It is how I remember the people, places

and events during my association with Dr. Henry Singleton and

ous events, and similar material. Perhaps because of my scien-

tific background, I have always been an inveterate note taker and

I also wish to thank those former Teledyne executives, share-

ument describing the continuing activities of the new Teledyne

His wife Caroline Singleton, son Will, and daughter Christina

as well. Excepts from Christina's book Saf7 Cristobal: Voices and

this material into some semblance of order, and Linda Meglin,

an oft-misused word, but it cannot be denied that Henry Singleton

and initial inTcs:.:. _: _ : . _ ."i professor of tnanage-

metalluigical sciences as w^ell as my management ex|>erience in

acquirii^ and devidopii]^ the ccMnpany's expansion into the met-

became Tdedyne. Henry's seardi for talented people went down

and a stock market value of about SI. 5 bilfion.

At its peak, Tdedyne consisted of more that 130 individual

Dr. George A. Roberts

To understand how Teledyne grew from a tiny Los Angeles elec-

tronics company in 1960 to 293rd place on the Fortune 500 list

in just six years, it helps to understand the background and life

events of the man who started it all.

HenryEarl Singleton was a farm boy from Texas. He was

the United States. A book, written by his daughter, Christina

Naval Academy, but I can attest to his lifelong fascination with,

all types. I believe it is true that he never sold a square foot of

house in which he had lived. He kept them, rented them, fixed

square foot being asked there compared to what I was used to in

Latrobe, Pennsylvania. Nevertheless, I followed his advice and

recently, as I was reviewing some notes that I kept during the

prepared for my remarks to the shareholders at our annual meet-

14,500 employees in 90 profit centers, with less than

On May 31, 1967, we owned three locations with 4,200,000

As an example of the speed with which we were growing, at

we had 20,000 employees, with 2,700 in unions, and

and pressing reason. Even when we made strategic spin-offs of

Henry, as mentioned, eventually became a very large, if not the

But much transpired before he had accomplished that. As

two years at the University of Texas (North Texas Agricultural

of that year. We came to room together during our time there,

One of Henry's great talents was mathematics. At the Acad-

Severn River by his classmates. With his guidance I managed to

end up in the top section in mathematics myself. Incidentally,

ous Teledyne directors meetings in later years, which he accepted

ring medical condition. After considering several engineering

and became professor of physics at Cal Tech.

One of his colleagues there was Reuben Fine, the United

States chess champion at the time. Henry recounts that Reuben

chess, and became a talented tournament-class player himself.

After a short stint at ITT in New York City as a patent engi-