Sitting in his 34th floor suite in a downtown Dallas office building, James J. Ling does not fit the image of a legendary Texas wheeler-dealer. This is not some swaggering cowboy. Indeed, the only cowboy hat in the place had arrived atop a retired British army colonel with an investment proposal to promote. Ling himself displays less pretension than the average hotel desk clerk. And while he is, at 61, quite trim and a good six feet tall, he hardly seems like "a Texas titan," as he was characterized in the title of Stanley H. Brown's 1972 biography.
Nonetheless, the man is a legendary figure. Fifteen years ago his name was almost a household word. He was the most notorious of the conglomerators, men who collected and traded business assets the way boys collect and trade baseball cards. The media dubbed him "Jimmy Ling, the Merger King," as he notched his way up the Fortune 500 list with acquisition after acquisition. Today he would probably be called a "paper entrepreneur."
Ling, for his part, insists that he was -- and is -- a real entrepreneur. It may have looked as though his only interest was in building the biggest company possible, he admits, but he was actually breathing new life into moribund institutions. He created real value, he says, in the corporate structures he built then and in the ones he is building now.
Ling achieved fame by parlaying his first company, a Dallas electrical contracting business started in 1947, into LTV Corp., by 1969 the I4th largest industrial corporation in the United States. Along the way, he developed a hefty reputation. A friend of Lyndon Johnson, he had the antitrust book thrown at him by Attorney General Robert Kennedy. Wall Street alternatively loved and hated him, the state of the relationship being reflected in the mercurial market price of LTV stock, bonds, and convertible debentures. He baffled his board and his bankers with acquisition and refinancing schemes that defied conventional explanation. At the height of his corporate power, Ling controlled companies with such familiar names as Braniff Airways, Jones & Laughlin Steel, Wilson Sporting Goods, and dozens of lesser-knowns in industries as diverse as electronics, military aircraft, meat packing, and pharmaceuticals. LTV's consolidated revenues in 1969 came to $3.75 billion.
But as Ling rose by the deal, so did he fall. In 1969 his latest and largest acquisition, Jones & Laughlin, had attracted new attacks from government trustbusters, and the steel company itself was not helping the parent's earnings. Ling was ousted from LTV in 1970 by a board that had, for good reason or not, lost faith in his capacity to keep so monstrous a business afloat in an economic sea that was becoming increasingly hazardous.
LTV survived, but Ling's departure left it just another large institution. It was ITT without Harold Geneen, the UAW without Walter Reuther, the SCLC without Martin Luther King Jr.
Ling himself dropped abruptly out of the news and out of the public eye -- until 1979, when the financial pages discovered him in the midst of a takeover attempt for Texas International Co., a crippled former high-flier in the oil and gas exploration, drilling, and well-servicing business. Ling lost his bid for Texas International (although he pocketed as much as $10 million from stock profits in the process), but his name popped up again and again in small news items that first had him associated with names like Gold Crown Resources, then with Matrix Energy, later with L. G. Williams Oil, and finally with Xenerex. It began to look like classic Ling -- convoluted deals involving paper swaps, reverse mergers, public offerings, debt restructurings -- only this time there were new wrinkles -- roll-outs and something Ling calls "fungibilizing." The former conglomerator, it turned out, was building a new business, this time in the oil patch. "We're a deal company," he says. "We just happen to be dealing in the energy business."
Dealing is what Jim Ling does. "Ling was an architect and a leader rather than a manager or administrator," wrote biographer Brown. "To ask how he managed his companies was almost to miss the point of what he really was doing."
While other corporate moguls of his age and experience hold strong, well-articulated views on issues of public policy, the state of the economy, the Communist threat, the latest Internal Revenue Service attack on tax shelters -- that sort of thing -- quizzing Ling on these topics elicits pleasant but not very interesting responses.
Brown observed that the largely self-educated Ling had no sense of history or of his place in it, that he rarely generalized from his experiences. To Ling, "what happened happened," Brown wrote in 1972. Twelve years have not changed the man. He is still no less, but no more, than an extraordinary deal-maker, a financial Beethoven who can visualize a symphony where others hear only a tune. A young financial analyst, according to Brown, once traced out a Ling deal on a restaurant tablecloth, laid down his pencil, and said, "That proves that you can get something from nothing." And that -- creating a rather substantial something from nothing -- is what Ling claims his deals do.
In 1965, for example, LTV was in a sales slump, and its stock price was depressed. Growth momentum had ground to a stop, so Ling launched Project Redeployment, an exchange of stock so complex that the prospectus describing it ran to 80 pages. The basic idea, however, was elegant and simple.
At the time, LTV had business in three distinct industries -- aerospace, military electronics, and consumer electronics. Ling created three new corporations, one in each industry, and sold the appropriate LTV assets to these new subsidiaries in exchange for their stock. The stocks of these newly created corporations thus became LTV's principal asset. Ling then created a market for these new stocks by offering a limited number of them to investors in exchange for their LTV shares.
