Management: The Corporate Cezanne

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The Real Raid. Simon is a constant and shrewd reader of profit and loss statements. He looks for companies with broad stock ownership, shares undervalued in relation to book values, sluggish management and sickly earnings. If he finds a likely case, he may dispatch aides to probe the situation deeper, use his contacts in Wall Street to find out why things are not better than they are. Eventually Simon may make a visit to the company himself—he took eight trips to West Virginia in the course of buying into Wheeling Steel—but his trips are mainly for general impressions rather than to learn exact detail of operations. When he has finally made up his mind about a company, the hot line to Sutro & Co. of Los Angeles, his primary broker, lights up and Simon begins to buy.

Simon has improved practically every company that he has gone into and, since he has never sold any of his major acquisitions, denies with some justice the common charge that he is a raider. Says he: "We wouldn't even come close to raiding, but this is used as a demagogic epithet by inadequate managements as their way of keeping their position. In a situation like Swift, which has leadership in the meat-and-carton industry and yet shows a consistently low return on investment, what has happened in the way of management over the past 30 or 40 years has been the raid." After moving in on a struggling company, Simon's first act is usually to cut back dividends to provide funds for revival—as he has done at Wheeling Steel.

Among the companies he has bought into lately, Canada Dry is the only one with which Simon feels he has reached a constructive agreement. Rebuffed at first, he was finally invited to become a director, now feels that "the dialogue has turned from negative to positive" and that Canada Dry is following his recommendation: spend more on advertising and promotion to grow faster. As for Swift, Simon says: "They should be making a lot more money, but they have a tendency to be conservators. They aren't aggressive enough in their operations or their merchandising. Still, I have no sense of urgency about Swift." That sense of urgency is reserved for Wheeling, Simon's only current losing proposition; there, with the aid of his personally picked new president, he will push $245 million worth of modernization plans.

Power Before Title. Simon's interests in the business world, and his increasing involvement in the world of art, have grown so demanding that he has been forced to abdicate the title, if not the power, of the top post at Hunt. Last year he stepped up from president of Hunt Foods to the $125,000 post of finance-committee chairman to allow himself more time for that most valuable of artistic attributes: perspective. "I've had to be a professional manager," says Simon, "and I haven't liked it particularly. It's been very rewarding and quite a lesson, and I'm damned glad to be rid of it. I like to work with things in a creative fashion, and that role is different from the professional manager's."