Welcome Home, You're Fired

Sudden shake-up at ITT

As the highly regarded head of the nation's eleventh largest industrial corporation, 53-year-old Lyman Hamilton Jr. had a future that appeared to be bright and secure. Yet the affable, mild-mannered president and chief executive officer of ITT had just returned from a three-week swing through the Pacific last week when, with stunning swiftness, the board fired him. The year's most astonishing management shake-up showed just how little job security there is at the top.

A terse two-page press release announced that Hamilton, who last year earned $759,000 in salary and benefits, had "resigned" over "policy differences" and would be succeeded by Executive Vice President Rand Araskog, 47. Company flacks who a few hours earlier had been extolling Hamilton's abilities now found themselves complaining that their former skipper always seemed to be jetting off to the ends of the earth instead of managing the shop in Manhattan.

In fact, Hamilton was ousted after only 18 months because he upset the man who had built ITT into the world's biggest conglomerate, its demanding, autocratic chairman, Harold Geneen, 69. Hamilton's offense? Nothing more than some modest restructuring of the company into five operating divisions, and a bit of judicious pruning of corporate deadwood that had grown up under Geneen.

Tensions had been building between the two men almost from the moment that Hamilton stepped into Geneen's job as day-to-day operational boss of the company. Reluctant to relinquish power, Geneen in 1975 had been given a two-year exemption from the company's policy of mandatory retirement at 65, but when he finally did step down, ostensibly to confine himself to his more general policy-making duties as board chairman, he pestered the new chief with critical memos, maneuvered to circumvent Hamilton's corporate decision making and sometimes even insulted him to his face. One source close to both recalls Geneen remarking in Hamilton's presence shortly before he stepped aside as chief executive: "1 want to get this company in such tight order that even Mickey Mouse can run it."

For all the intrigue, the company is not likely to suffer much. Upheavals on foreign currency markets have cut into ITT's overseas earnings since April, but that is beyond the power of any management to control. By just about every other measure ITT, which last year earned a record $662 million on sales of $15.2 billion, remains healthy.

The company stands to see a lot more of Geneen, at least until his $1 million-a-year management contract expires in 1981 and he presumably retires for good at 71. No sooner had he dumped Hamilton than he was jetting to Europe where, in the words of one ITT executive, "more heads are expected to roll." Sure enough, at week's end Gerhard Andlinger, president of ITT Europe, "resigned."

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