Meat Cutter's Triumph

In 1950, Indianapolis' 107-year-old Kingan & Co., Inc. was the seventh largest meat-packing firm in the U.S., but way down the list in profits. To jack them up, Kingan's directors lured H. Frederick Willkie, brother of the late Wendell Willkie, away from his $100,000 vice president's job at Joseph E. Seagram & Sons Inc., installed him as president. Kingan's conservative President "W.R." Sinclair agreed to step aside while Willkie worked on the patient.

Willkie agreed to a $60,000-a-year salary at Kingan because, he said, the job presented a "challenge." It did, in more ways than one. He found that his patient's profit margin was critically low (1 1/2%). He decided to develop high-profit specialty products such as precooked ham loaf, meat spreads and sausages. Willkie also advised a streamlined administration, a big research program, improved sanitation controls and a heavy advertising campaign. The old guard objected to many of Willkie's expensive ideas. Says Willkie: "From the very outset, I [was] blocked and interfered with by the Sinclair family and its palace guard installed in key positions."

As Willkie spent money, profits slipped, and Kingan went into the red the last two quarters of 1951. The "palace guard" charged that Willkie was throwing money away. Willkie denied any extravagance, said that 1951's ratio of selling and administrative expenses to sales was .042% less than in the previous year. Retorted the Sinclair faction: manufacturing expenses rose about 19% during 1951.

Last December, Sinclair decided that Willkie would spend no more money, sent him on a leave of absence. An "Independent Committee" of stockholders who were loyal Willkie men prepared to fight to the finish, even though the Kingan and Sinclair families owned 227,000 shares, or 29% of the stock outstanding.

Two weeks ago Fred Willkie was fired. Last week, at the annual stockholders' meeting of the company, the showdown between Sinclair and Willkie factions came. The Willkie men tried to put in their own slate of directors and were soundly licked.

As victorious 67-year-old President Sinclair once again bossed Kingan, he recalled: "I started as a meat cutter . . . at ten shillings a week. I didn't like that kind of work, so I figured if I had to be in business, I might as well be boss."

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