An In-House Wasp

So the three men mainly responsible for corporate policy and planning — David Wright, Ramo, and President H. A. Shepard —seek to bring the company's four groups together as often as possible, and let their leaders develop, on their own initiative, a greater awareness of the interconnection of their interests and a closer coherence in their planning. As chief executive officer, Dave Wright, sixty-one, fully assumes and firmly exerts his ultimate responsibility for determining plans and goals. 'But this is the kind of organization,' he says, `that has to be led, not driven with a bullwhip.' Horace Shepard, fifty-three, was an Air Force general in charge of procurement and engineering at the Pentagon before joining TRW in 1951. He became general manager of company-wide operations in 1961, and president the following year, succeeding Dean Wooldridge. (Wooldridge, who retired to engage in scientific research and writing, remains a director of TRW.) In the course of their Vermont stay, Wright and Shepard, apart from the amenities of office they had to exercise, virtually slipped into the crowd and allowed others to dominate the show. Dr Ramo, fifty-three, is now free from specific administrative duties and is engaged in a continuous study of TRW's relationship to the world around it, and in keeping the company alerted and attuned to a changing environment. Ramo, who was really the architect of this year's conference, buzzed around the fringes, deliberately playing the wasp in an effort to sting the group into livelier debate.

Apart from its general objective, Vermont '66 had a very special mission. Back in 1961, when the company was doing barely $400 million in sales, the Vermont conferees, taking a deep breath  and a long look, set a goal of $1 billion in sales in 1970. It seemed an ambitious aim. But by the summer of 1966 there was every reason to think the goal would be reached in 1968, or earlier. Thus it was determined that Vermont '66 should make a start on articulating a new goal for 1975.

It was not the intention, at this meeting, to settle on a firm quantitative goal for 1975. Rather, an attempt would be made to bring out the pertinent issues, and fork over the material out of which the ultimate plan would be built and shaped. During the ensuing months individual executives would be expected to subject their respective pieces of the program to detailed study and refinement. In July 1967, the group will return to Vermont with the specific objective of constructing a definite 1975 goal.

They are gathered here, therefore, to exchange and argue out ideas, not chew over figures. And the talk runs the gamut —changes in the world power situation, limited war, supersonic planes, city planning, electronic transportation systems and Martian fly-arounds. Nevertheless, there are mountains of figures that have to be cited, comprehended, and carried about in the mind if all this brainstorming is to have substance and direction. To lead off the conference, the heads of the four operating groups take an hour each for an analysis and forecast — minimum, probable, and possible — of their respective markets. As the figures flash by on the screen, the minds of the men gradually adjust to the business dimensions that are implied by a trillion-dollar national economy in 1975. Items:

Executive Vice President Stan Pace of the Equipment group takes the conferees through an analysis of the revivified U.S. aircraft industry, with its prospects of a rise in sales of commercial and military jet engines alone from the recent $1.5 billion to $3.5 billion in 197•. Pace does not spell out, at this session, the figure his group might shoot for in 1975. He will only say that `thanks to these favorable trends, we will reach our internal growth goal for 1970 ($200 million in sales) three years early.' The rough arithmetic, including selective acquisitions, suggests that $500 million to $700 million is an appropriate outside estimate for Pace's group.

Executive Vice President R. F. (Rube) Mettler of Systems, whose principal customer is the government, is more concerned with the enhancement of his profit margins than with his rate of growth, which right now is moving the fastest of any division in the company. 'On a selective basis,' he concludes, we could do $700 million to $800 million in 1975.'

Group Vice President Sid Webb, of TRW Electronics, trying manfully not to let the color-TV boom lend too optimistic a color to his long-term judgments. 'I'm not yet ready to put a figure on our 1975 sales, but it is probably in the magnitude of five times our present size.' This would put Webb's group in the area of $300 million.

Finally, Executive Vice President Ed Riley rings in with his exhaustively researched analysis of the transportation-equipment market. A deliberate man, given to understatement, his minimum forecast, based on a 'normal internal growth rate', lives up to form — a mere $600 million. But Riley's division has recently been pursuing a vigorous acquisition program, particularly in the international field. And with a worldwide market of $62 billion in automotive parts in prospect for 1975, Riley takes a shot at TRW's possible share. The figure: $1.8 billion. (At which a voice from the back of the barn comments, 'Look at conservative Ed Riley copping on to the whole damn company goal for 1975.')