SCI Award
Harold Thayer wins Chemical industry Medal Ask Harold E. Thayer what he's proudest of and he'll answer: "The progress we've made at Mallinckrodt in growing from a $38 million company to a $225 million one." Ask him what his biggest disappointment has been and he'll say: "That we aren't bigger and more profitable." Ask him what he wants from the future and he'll reply: "To make Mallinckrodt even bigger and more profitable." That outlook—and the accomplishments that stem from it—explains why Thayer is the 1976 winner of the Chemical Industry Medal, awarded last week in New York City. The medal is presented annually by the American Section of the Society of Chemical Industry (London) "for conspicuous service to applied chemistry." If you stopped asking questions at that point, you also might conclude that the 64-year-old chairman, president, and chief executive officer of the venerable St. Louis-based chemical firm was a singleminded drudge who had no interests aside from his work. If you dug deeper, you'd find that Thayer is, instead, a pretty complicated human being. True, Thayer can take most of the credit for "turning Mallinckrodt around" since he assumed control of the old "chemical works" in 1965. True, he's a no-nonsense type who works hard and long, demands the best from his subordinates, and gets impatient with "people who don't have all their facts together." But Thayer also happens to believe that a businessman has a responsibility to serve his community. Consequently, de-
spite his busy schedule at Mallinckrodt, he finds time to take part in a variety of civic and cultural improvement activities in the St. Louis area. He brings the same drive and zest to, say, running a charitable fund campaign that he does to running Mallinckrodt. Not surprisingly, he's come to be known as a "man to turn to" when something needs to be done for St. Louis. Thayer claims he has no hobbies to speak of. Still, he golfs, he fishes, and, at age 60, he bought his first shotgun and joined a local shooting club "because the other club members are great people." That remark is a key to Thayer's personality. He genuinely enjoys good companionship. Regarding fishing, he says, it's relaxing, but "fellowship is more important than fishing. I'd rather not catch fish and have somebody with me than catch fish and be alone." At Mallinckrodt, however, Thayer is "all business." He came there in 1939 after graduating from Massachusetts Institute of Technology in 1934 and serving a fiveyear stint selling dyes for an American Cyanamid division—where, he decided, he "wasn't going anywhere." He wasn't too sure about Mallinckrodt at first, either. Things weren't happening fast enough. With the onset of World War II, things started happening faster. In 1941 Thayer was named War Production Board coordinator for the company. In 1943 he became project manager for Mallinckrodt's operations for the "Manhattan District," providing purified uranium for develop-
ment of the atomic bomb. After the war he continued as project manager for a Mallinckrodt-operated Atomic Energy Commission plant. The young executive impressed his superiors: In 1950, he became the company's youngest vice president; in 1959, executive vice president; and in 1960, president. Meanwhile, the old "fine chemicals" company, established in 1867, had always made money. During the war, it had prospered and grown. But by the end of the 1950's, the company had stalled. Its products were highly regarded, but an aging, conservative, family-controlled management was content to maintain the status quo. When Thayer took over, he instituted short- and long-term goals for growth in sales and earnings. He established effective financial controls and set up profit centers within the company. He embarked on ambitious acquisition and diversification programs. In short, Thayer says, "We tried to bring some order to the place." The results speak for themselves. In 1962, sales stood at about $38 million per year. By 1975 they had increased almost sixfold, to more than $224 million. Perhaps more important, earnings per share had grown from 16 cents to $2.06; return on investment had increased from 2.9% to 15.1% annually. During the period 1965 to 1970, when the chemical industry as a whole was languishing, Mallinckrodt earnings per share increased at a compound growth rate of 13.1% per year. From 1970 to 1975, despite a couple of recessions, performance was even better; for that period the compound growth rate was 23.4%. What next? "More of the same," Thayer says. Although he intends to expand Mallinckrodt's international activities, he foresees no great change in the company's main lines of business: industrial specialty chemicals; food, drug, and cosmetic chemicals; and diagnostic and pharmaceutical products. "In these giant fields," he predicts, "the company will continue to grow as it has, for another 10 years." If the government lets it, that is. Thayer sees "government regulation" as the biggest problem facing the chemical industry. Not only is the cost of government growing much faster than the services and benefits it provides, he says, but its expanding regulatory activity "poses a threat to the continued existence of our economic system." Some controls are necessary, Thayer concedes. But "frequently, legislation and regulation are initiated in response to an Oct. 11, 1976C&EN
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and energy could more profitably be spent solving real problems," Thayer says. Nevertheless, senior executives must get even more deeply involved. "The time to get to know legislators is during 'noncrisis' periods, so that we can do a better job when we meet with them when we have a real problem." There are several other things industry leaders can do to reverse the current trend, according to Thayer. For example, management should cooperate with employees and unions in common causes. "Regulations can hurt the interests of employees as well as of management." Consider, he says, the new pension reform law: Large companies, able to bear the increased costs, will comply. But more than 5000 U.S. companies have been forced to drop their pension plans because they couldn't absorb the added costs. Although the intent of the law was to provide better pension protection, the result was that "some employees who formerly abuse by a tiny segment of industry . . . had less-than-perfect retirement plans but the law or regulation developed ends now have no retirement plan at all." up being applied to all members of inFinally, Thayer notes, "There are more dustry—the innocent as well as the than two dozen bills pending in Congress guilty." A prime example, he adds, is the that provide for review and elimination of Occupational Safety & Health Act, with excessive, duplicative, inflationary, and its "mountains of paperwork, high costs, anticompetitive regulation." He advises and some notably foolish regulations chemical executives to "get busy and let dealing with trivia instead of safety." your Senators and Representatives know Top management already spends an that you strongly support such legislation inordinate amount of time wrestling with and urge them to get on with it." legislation and regulation "when the time Ward Worthy, C&EN Chicago
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C&EN Oct. 11, 1976
Fluorocarbon makers set for possible ban In the wake of the National Academy of Sciences report about the adverse effects of chlorofluorocarbons on the environment, chemical makers are taking a cautious approach to the possibility of an eventual ban, limited or otherwise, on chlorofluorocarbon use. Most producers say that existing plants can make other products, or be used to produce more environmentally acceptable chlorofluorocarbon substitutes. Few producers are ready to put the brakes on production now, but the chances of increased chlorofluorocarbon 11 and 12 production are nil. Three U.S. chlorofluorocarbon producers—Du Pont, Allied Chemical, and Union Carbide—all say that their facilities for chlorofluorocarbons can be shifted to other products, and that they won't be stuck with obsolete plants if the federal government mandates a sweeping ban on the compounds. A fourth major producer, Pennwalt Corp., Philadelphia, already is moving to minimize the financial effects at least of any eventual curtailment of chlorofluorocarbon production. Speaking to financial analysts in New York City last month, Pennwalt chairman and president William P. Drake said that "at the beginning of the year we felt it prudent to anticipate the worst—that is, that Isotrons 11 and 12 [Pennwalt's brand of chlorofluorocarbons 11 and 12] would be banned. Under the circumstances, we have been depreciating the remaining value of our facilities for these products at an accelerated rate." Drake says that the company originally planned to write off completely the value of its chlorofluorocarbon plants this year, but now that the long-awaited NAS report is out "it would not appear that the situation is anywhere as bad as it might have been." NAS concluded that an immediate ban on the chemicals was not imperative, preferring instead to wait up to two more years before deciding on further recommendations. Drake says that in light of this, Pennwalt will write off the value of its plants over the next 10 quarters (two and a half years). Pennwalt has chlorofluorocarbons capacity at Calvert City, Ky., and Thorofare, N.J. Spokesmen for the other three firms say they know of no moves afoot to follow Pennwait's lead, at least as far as accounting changes go. Chlorofluorocarbon makers, however, appear to be facing up to the reality of the situation. As Du Pont environmental control manager Robert J. Reichert said last month at the International Conference on the Stratosphere & Related Problems in Logan, Utah, "If the facts bear out the theory that continued use of certain fluorocarbon products would cause a health hazard through depletion of stratospheric ozone, we are prepared to adjust production of the offending compounds to the extent required to cope with the hazard." D
