| Type | Public |
|---|---|
| Traded as | NYSE: ITT |
| Industry | Conglomerate |
| Predecessor | ITT Corporation |
| Founded | 1995[1] |
| Headquarters | White Plains, New York, U.S. |
| Area served | Worldwide |
| Key people | Denise L. Ramos (CEO and President) |
| Revenue | US$ 10.995 billion (2010)[2] |
| Operating income | US$ 900 million (2010)[2] |
| Net income | US$ 798 million (2010)[2] |
| Total assets | US$ 12.438 billion (2010)[2] |
| Total equity | US$ 4.505 billion (2010)[2] |
| Employees | 40,000 (December 2010)[2] |
| Website | ITT.com |
ITT Corporation (NYSE: ITT) is a global diversified manufacturing company based in the United States. ITT participates in global markets including water and fluids management, defense and security, and motion and flow control. Forbes.com named ITT Corporation to its list of "America's Best Managed Companies" for 2008, and awarded the company the top spot in the conglomerates category.
ITT's water business is the world's largest supplier of pumps and systems to transport, treat and control water, and other fluids. The company's defense electronics and services business is one of the ten largest US defense contractors providing defense and security systems, advanced technologies and operational services for military and civilian customers. ITT's motion and flow control business manufactures specialty components for aerospace, transportation and industrial markets.
In 2008, ITT was named to the Dow Jones Sustainability World Index (DJSI World) for the tenth time in recognition of the company's economic, environmental and social performance. ITT is one of the few companies to be included on the list every year since its inception in 1999.
The company was founded in 1920 as International Telephone & Telegraph. During the 1960s and 1970s, under the leadership of its CEO Harold Geneen the company rose to prominence as the archetypal conglomerate, deriving its growth from hundreds of acquisitions in diversified industries. ITT divested its telecommunications assets in 1986, and in 1995 spun off its non-manufacturing divisions, later to be purchased by Starwood Hotels & Resorts Worldwide.
In 1996, the current company was founded as a spinoff of the original ITT Corporation as ITT Industries, Inc. and changed its name to ITT Corporation in 2006.
In 2011, ITT spun off its defense businesses into a company named Exelis, and its water technology business into a company named Xylem.
In 2007, ITT was awarded a $207 million initial contract by the Federal Aviation Administration (FAA) to lead a team to develop and deploy the Automatic Dependent Surveillance – Broadcast (ADS-B) system. ADS-B is a key component of the FAA's NextGen air traffic control modernization program intended to increase safety and efficiency to meet the growing needs of air transportation. ITT is responsible for overall system integration and engineering and under contract options will operate and maintain the system after deployment through September 2025. The ITT team includes its partners AT&T, Thales North America, WSI, SAIC, PriceWaterhouseCoopers, Aerospace Engineering, Sunhillo, Comsearch, MCS of Tampa, Pragmatics, Washington Consulting Group, Aviation Communications and Surveillance Systems (ACSS), Sandia Aerospace and NCR Corporation.
On September 6, 2008, the ITT-build imaging payload was launched aboard the GeoEye-1 satellite to provide high-resolution earth imaging. The satellite has the ability to collect images at 0.41-meter panchromatic (black and white) and 1.65-meter multispectral (color) resolution. GeoEye-1 can precisely locate an object to within three meters of its true location on the Earth's surface. The satellite will also be able to collect up to 700,000 square kilometers of panchromatic imagery per day.
ITT was formed in 1920, created—with encouragement from New York— by brokers Colonel Sosthenes Behn and his brother Hernand. The brothers had acquired the Puerto Rico Telephone Company in 1914 along with the Cuban-American Telephone and Telegraph Company and a half-interest in the Cuban Telephone Company.[3] [4][5] IT&T's first major expansion was in 1923 when it consolidated the Spanish Telecoms market into what is now Telefónica.[6] From 1922 to 1925 it purchased a number of European telephone companies. In 1925 it purchased several companies from Western Electric's international operation, including the Bell Telephone Manufacturing Company (BTM) of Antwerp, Belgium, (which manufactured rotary system switching equipment), and the British International Western Electric, renaming it Standard Telephones and Cables (STC). In the 1930s, ITT grew through purchasing German electronic companies Standard Elektrizitaetsgesellschaft (SEG) and Mix & Genest, both of which were internationally active companies. Its only serious rival was the Theodore Gary & Company conglomerate, which operated a subsidiary, Associated Telephone and Telegraph, with manufacturing plants in Europe.
In the United States, ITT acquired the various companies of the Mackay Companies in 1928 through a specially organized subsidiary corporation, Postal Telegraph & Cable. These companies included the Commercial Cable Company, the Commercial Pacific Cable Company, Postal Telegraph, and the Federal Telegraph Company.
According to Anthony Sampson's book The Sovereign State of ITT, one of the first US businessmen Hitler received after taking power in 1933 was Sosthenes Behn, then the CEO of ITT, and his German representative, Henry Mann.[6] Antony C. Sutton, in his book Wall Street and the Rise of Hitler, makes the claim that ITT subsidiaries made cash payments to SS leader Heinrich Himmler.
ITT, through its subsidiary The Lorenz Company, owned 25% of Focke-Wulf, the German aircraft manufacturer, builder of some of the most successful Luftwaffe fighter aircraft. In the 1960s, ITT Corporation won $27 million in compensation for damage inflicted on its share of the Focke-Wulf plant by Allied bombing during World War II.[6] In addition, Sutton’s book uncovers that ITT owned Huth and Company, G.m.b.H. of Berlin, which made radio and radar parts that were used in equipment for the Wehrmacht.
In 1951, ITT purchased Philo Farnsworth's television company to break into that market. At the time Farnsworth was also developing the Fusor fusion reactor. Also in 1951, ITT bought a majority interest in the Kellogg Switchboard & Supply Company, founded in 1897 as a pioneer in "divided-multiple" telephone switchboards, and bought the remaining shares the next year. ITT changed the company's name to ITT Kellogg. After merging Federal Telephone and Radio Corporation into ITT Kellogg and combining manufacturing operations the name was again changed to ITT Telecommunications, eventually reverting to ITT Kellogg. One prominent subsidiary of this was the American Cable and Radio Corporation, which operated the transatlantic cables of the Commercial Cable Company, among other ventures.
International telecommunications manufacturing subsidiaries included STC in Britain and Australia, SEL in Germany, BTM in Belgium, and CGCT and LMT in France. These companies manufactured equipment according to ITT designs including the (1960s) Pentaconta crossbar switch and (1970s) Metaconta D, L and 10c Stored Program Control exchanges, mostly for sale to their respective national telephone administrations. This equipment was also produced under license in Poznań (Poland), and in Yugoslavia, and elsewhere. ITT was the largest owner of the LM Ericsson company in Sweden but sold out in 1960.
Alec Reeves invented Pulse-code modulation (PCM), upon which future digital voice communication was based, and Charles K. Kao pioneered the use of Optical Fiber, for which he was awarded the 2009 Nobel Prize in Physics.
In 1959, Harold Geneen became CEO. Using leveraged buyouts, he turned the minor building of the 1950s into a major force during the 1960s. In 1963, ITT attempted to purchase the ABC television network for $700 million. The deal was halted by federal antitrust regulators who feared ITT was growing too large. In order to continue growing while not running afoul of antitrust legislation, it moved to acquire companies outside of the telecommunications industry. Under Geneen, ITT bought over 300 companies in the 1960s, including some hostile takeovers. The deals included well-known businesses like the Sheraton Hotel chain, Wonder Bread maker Continental Baking, and Avis Rent-a-Car. ITT also absorbed smaller operations in auto parts, energy, books, semiconductors and cosmetics. In 1966, ITT acquired Educational Services, Inc., an operator of for-profit schools, which became ITT/ESI. When ITT attempted to acquire the The Hartford insurance company in 1970, the Justice Department filed suit, and ITT agreed to divest assets equal to those of Hartford's -- including Avis.[7]
ITT's sales grew from about $700 million in 1960 to about $8 billion in 1970, and its profit from $29 million to $550 million. However, when the higher interest rates started eating away at profits in the late 1960s, ITT's growth slowed considerably.
In the late 1960s, the British electronics manufacturer Kolster-Brandes, KB for short, had run into trouble with its color television manufacturing, and turned to ITT for help; ITT bought out the company, and for a while, UK products were badged "ITT KB" then eventually just ITT. By the late 1970s, ITT had a good presence on the UK domestic electrical market in television, audio and portable radio products.
João Goulart was the president of Brazil. The US government, including President Lyndon Johnson, Defense Secretary Robert S. McNamara, ambassador Lincoln Gordon, and others, felt he had Communist leanings. ITT owned the phone company of Brazil; Washington was afraid he would nationalize it. ITT's president, Harold Geneen, was friends with the Director of Central Intelligence, John McCone. The CIA performed psyops against Goulart, performed character assassination, pumped money into opposition groups, and enlisted the help of the Agency for International Development and the AFL-CIO. The 1964 Brazilian coup d'état exiled Goulart and the military dictatorship of Humberto de Alencar Castelo Branco took over. McCone went to work for ITT a few years later. The dictatorship lasted until 1985.[8]
In 1970, ITT owned of 70% of Chitelco, the Chilean Telephone Company, and funded El Mercurio, a Chilean right-wing newspaper. Declassified documents released by the CIA in 2000 suggest that ITT financially helped opponents of Salvador Allende's government prepare a military coup.[9][10] On September 28, 1973, an ITT building in New York City, New York, was bombed by the Weather Underground for alleged involvement in the September 11th overthrow of the democratically elected socialist government in Chile.[11][12]
In 1972, newspaper columnist Jack Anderson disclosed a memo of ITT's Washington lobbyist, Dita Beard, which revealed a relationship between ITT's providing funds for the Republican National Convention and a Justice Department settlement of an antitrust suit favorable to ITT.[13]
The song "International Thief Thief" by Fela Kuti documents the alleged corruption and meddling of the company in Nigerian politics.[11]
In March, 1977 Lyman C. Hamilton was appointed CEO, and Geneen became Chairman of the Board. In June 1979, while Hamilton was in Asia, Geneen became aware of Hamilton's plans to divest ITT's European consumer goods business, and lobbied his fellow board members to dismiss him. In July 1979 Rand Araskog became CEO. Shortly after his appointment, Araskog insisted that the board remove Geneen as Chairman, though he remained on the board for four more years.[14][15]
Araskog dismantled much of ITT, selling most of its holdings.
Starting in 1977, ITT set out to develop an ambitious new Digital Telephone Exchange, System 1240 (later System 12)[16][17], which reportedly cost $1B.[18] Fortune reported that "Araskog focused the company on an all-consuming push to develop and market System 12" and "shoveled profits from good businesses into System 12's insatiable maw".[19] System 12 was intended to operate in all markets, and in all modes, from local switches to long distance.[20] The design was done at the Advanced Technology Center (Stamford, CT and then Shelton, CT.) Manufacturing was by ITT's subsidiaries, such as BTM in Belgium, where the first production system was installed at Brecht, in August, 1982.[21]. Initial sales, particularly in Europe and Mexico, were strong, but the new system took longer than expected to integrate, with further losses.[22] Against the advice of headquarters, ITT Telecommunications (ITT Kellogg) in Raleigh NC undertook the conversion to the US market[23], and although sales were announced in 1984[24] and 1985[25], the attempt ultimately failed, in early 1986.[26][27]
In 1986 ITT sold its international telecommunications product businesses, including ITT Kellogg, to the Alcatel Alsthom subsidiary of Compagnie Générale d'Electricité (CGE), forming Alcatel N.V.(Netherlands). At the time this was the world's second-largest telecommunications company.[28][29]. Alcatel Alsthom S.A. subsequently merged with Lucent and is now Alcatel-Lucent. ITT initially held a 37% stake, but in March 1992 it sold it's remaining 30% -- "The move ended the involvement of ITT in the telephone industry"[30]
ITT Educational Services, Inc. (ESI) was spun off through an IPO in 1994, with ITT as an 83% shareholder. ITT merged its long distance division with Metromedia Long Distance in March, 1989, creating Metromedia-ITT[31]. Metromedia-ITT would eventually be acquired by Long Distance Discount Services, Inc. (LDDS) in 1993. LDDS would later change its name to Worldcom in 1995.
In 1995, with Araskog still at the helm, ITT Corporation split into 3 separate public companies:
In March 2007, ITT Corporation became the first major defense contractor to be convicted for criminal violations of the U.S. Arms Export Control Act. The fines resulted from ITT's outsourcing program, in which they transferred night vision goggles and classified information about countermeasures against laser weapons, including light interference filters to engineers in Singapore, the People's Republic of China, and the United Kingdom.[33] They were fined US$100 million although they were also given the option of spending half of that sum on research and development of new night vision technology. The United States government will assume rights to the resulting intellectual property.[34][35]
In its investigation and subsequent ruling the United States Department of Justice found that the corporation went to significant lengths to circumvent rules regarding the exports including setting up a front company. According to U.S. Attorney John L. Brownlee, the company fought the investigation in order "to essentially run out the clock on the statute of limitations." [36]
An agreement was reached on June 26, 2007 for ITT to acquire privately held International Motion Control (IMC) for $395 million. The deal was closed and finalized in September 2007. An announcement was made September 14, 2010, to close the Cleveland site.
An agreement was reached September 18, 2007 for ITT to buy EDO Corporation for $1.7 billion.[37] After EDO shareholders' approval, the deal was closed and finalized on December 20, 2007.
On April 16, 2009, ITT announced it has signed a definitive agreement to acquire Laing GmbH of Germany, a privately held leading producer of energy-efficient circulator pumps primarily used in residential and commercial plumbing and heating, ventilating and air conditioning (HVAC) systems.
On January 12, 2011, ITT announced a transformation to separate the company into three, stand-alone, publicly-traded, and independent companies.[38] ITT will be divided into separate Industrial Process & Flow Control, Water & Waste Water, and Defense companies. On July 14, 2011, ITT announced the names of the three companies: the Industrial Process & Flow Control division will retain the name ITT Corporation, the Water & Waste Water division will be named Xylem, symbol XYL (a reference to xylem tissue in plants), and the Defense division will be named ITT Exelis, symbol XLS. Current ITT stockholders will own shares in all three companies following the spinoff.[39]
In 1929 ITT's headquarters were at 75 Broad Street, Manhattan.[40] "During World War II the building was a hub for communications with American submarines operating in the Atlantic Ocean." [41]
From 1961[42] to 1989[43], ITT's headquarters were at 320 Park Ave., New York.[44].
1330 Avenue of the Americas in Manhattan, New York City, which was ITT's corporate headquarters prior to its merger with Starwood Hotels & Resorts, was originally owned by the ABC Television Network, which ITT attempted to acquire in 1963. After a financial downturn, ABC moved out of the building known as "Brown Rock" and sold it to a Japanese conglomerate which then in turn leased a good portion out to ITT Corporation.
ITT Avionics was a division of ITT Corporation in Nutley, New Jersey. A 300-foot research tower at ITT Avionics was built in the 1940s for scientists for microwave communications systems. Research at the tower had stopped in the 1970s.[45] In 1996 the tower was demolished with explosives to prepare the site for sale.
In 1991 the company won a $19.6 million contract from the United States Air Force to develop the "intraflight data link", a communications system for "tactical airborne forces".[46] In 2004 they were awarded a $24.9 million contract from the Naval Air Systems Command Weapons Division for engineering software support services provided to the Tactical Aircraft Electronic Warfare Integrated Program Team at Point Mugu, CA and China Lake, CA. [47]