Continental Can Co. is entering the payoff phase of a remarkably instructive transformation in management and management methods. In all the history of the canmaking industry, American Can Co., the original trust, has remained No. 1, and for most of its life Continental (fifty years old this month) seemed ordained to be No. 2—a respectable No. 2 but a very distinct No. 2. Since the close of World War II, however, Continental, by a vigorous campaign of diversification, has rapidly been closing the gap. And with gross sales of $616 million in 1954, Continental Can seems hell-bent on dislodging American Can (1954 sales, $652 million) from the leadership.
Midway in its expansion, Continental found itself in an organizational snafu. Without losing stride, the company embraced decentralization, and boldly hired a new top man—and a military man, at that—to see the program through. For coincident with Continental’s fiftieth anniversary is the fifth anniversary of General Lucius D. Clay, U.S. Army, retired, as the company’s board chairman and chief executive officer. And it is probably more than just coincidence that in five years under Clay, Continental’s growth in sales—approximately $286 million—has nearly equaled that of the previous forty-five years.
To be sure, the General, with his celebrated capacity for dispassionate analysis, would be the last to credit to Clay that which is due in good part to circumstance. In recent years canners and canmakers alike have been swept forward by the surging economic tide and have seen their sales stimulated enormously by the consumer’s growing demand for prepared, packaged foods. And before Clay, of course, Continental had Carle Cotter Conway, chief executive officer from 1926 to 1950, who was the principal architect of Continental’s expansion and diversification, and the man who hand-picked the General as his successor.
Nevertheless, Continental is now strictly Clay’s show— Conway insisted on that—and by all the accepted business criteria, it is about as tidy and spanking a show as ever Clay ran in the Army. Last year’s record gross of $616 million, up $62 million—or 11 per cent—over 1953, was accomplished in a year when American Can had to settle for a decline of $8 million, or 1.2 per cent, in sales and a slip of 1 per cent in profits. In 1954 Continental ran up record earnings, after taxes, of almost $21 million, and this represented an increase of no less than 32 per cent over 1953’s net.
Born in rebellion
Continental and American relations are, and always have been, rather tart. American Can was put together in 1901 by the late Daniel “Czar” Reid, William B. Leeds, the “tin-plate king,” and a few other men who knew what they wanted. They simply bought up 90 per cent of the tin-can capacity then in existence in the U.S., and from each seller exacted an agreement that he would not re-enter the canmaking business for fifteen years. Among the canmakers who merged with American Can and became one of its executives was Edwin Norton of the Norton Tin Can & Plate Co. Along about 1904, Norton and several others decided to break away from the combine. He observed that the agreement didn’t say anything about his son’s going into the can business, and through him the group set up Continental Can Co.—initial capital, $500,000. The new company bought up the patents of one of the few canmaking machinery companies not controlled by American, and opened a factory in Syracuse, New York, which began shipping out cans in April, 1905.
In 1921 when Carle Conway, a son-in-law of Edwin Norton, came into Continental, the company was about one-quarter the size of American. Conway, a refugee from the piano-manufacturing business, was a natural-born negotiator and salesman. By the end of 1941, when the U.S. entered the war, he had pushed Continental’s sales up to $137 million, slightly more than half American’s sales of $264 million. By 1950, when Clay arrived, Continental had pulled up to 71 per cent of American’s gross sales, and in 1954 closed to 94.4 per cent. So the gap is now less than 6 per cent.
There are some special factors. American has traditionally followed a policy of internal expansion. Except for a highly successful venture into the production of paper milk containers, which is now thought to account for about 10 per cent of the company’s total sales, American has limited itself to the manufacture of metal cans. Continental, in contrast, has expanded largely by acquisition and diversification. Since 1905 it has purchased and absorbed no fewer than twenty-eight independent can companies, and in recent years it has acquired several sizable container companies in the non-metal field. In 1942, for example, Continental, for about $2 million, bought the Container Co. of Van Wert, Ohio, maker of fibre drums. In 1944 it bought Mono-Service Co. of Newark, New Jersey, maker of paper cups, and in the same year it also bought the Bond Manufacturing Co. of Wilmington, Delaware, which manufactures crown caps and cork products. These lines—-fibre drums, paper, and crowns— now add up to some $90 million annually in sales.
And as recently as 1953, Continental exchanged 73,177 shares of its common stock, then worth some $3,500,000, for the Benjamin C. Betner Co. of Devon, Pennsylvania, which manufactured a wide line of bags in paper, foil, laminates, etc., and at the same time paid $10,500,000 in cash for the flexible-packaging business of Shellmar Products Corp. of Mount Vernon, Ohio, a leading converter of cellophane, polyethylene, and pliofilm. The two companies were combined into the Shellmar-Betner flexible-packaging division, which last year accounted for some $40 million of Continental’s gross.
But while Continental has been closing the sales gap in this aggressive fashion, American, sticking to the business it knows best, has managed to make much better profits. Its percentage of net earnings to sales has almost always topped Continental’s by a point and one-half or more. In 1949, for example, American earned 5.9 per cent on sales, Continental 3.7 per cent; in 1953 it was American, 4.7, Continental, 2.8 per cent. But in 1954 Continental considers it won a “moral victory.” Its ratio of 3.4 per cent was only 1.3 percentage points below American’s.
Modest profit, margins, of course, are characteristic of huge-volume, competitive industries. And despite the fact that American and Continental between them do over 70 per cent of the canmaking business in the U.S., the industry, in many ways, is highly competitive.
Where canmakers compete
Both Continental and American derive nearly all their revenues from the sale of cans and other containers. Down through the years, however, much of the real competition between them has been not so much in the quality of cans as in the development of more efficient and rapid canmaking machinery for their own use and can-closing machinery for their customers’ use.
Continental, for example, operates four large machine shops—one in Syracuse, two in Chicago, and one in Seattle—and devotes a good share of its research budget to equipment development. Yet equipment making is not a profit operation per se. Continental no longer sells much canmaking machinery to other canmakers, and it never figured to profit directly on rentals of closing machinery to customers. But its position in the industry, of course, is to a large extent sustained by its ability to create containers for new products, to improve old styles, and to furnish customers with the fastest and most reliable closing machines possible. Continental also maintains a staff of about 150 men, operating from eleven field bases, to service closing machines and help customers with can-handling problems. For a long time it charged nothing for such service.
In 1950, however, a successful suit brought by the antitrust division of the Department of Justice against both companies ordered some changes in their traditional trade practices. (American stood the trial; Continental went along with a consent decree.) Briefly, the decree (1) limited contracts for the sale of containers to a maximum term of one year—formerly the companies had many three and five-year term contracts; (2) prohibited the two companies from giving quantity discounts to contract customers; (3) required can-closing machines to be made generally available for either purchase or lease, instead of exclusively for lease; and (4) required that rental charges on can-closing machines be “compensatory,” i.e., sufficiently high to cover the cost of servicing, depreciation, insurance, and to provide a return on the investment in the machines.
Although the purpose of the suit was to restrain both American and Continental from practices unfair to the little companies, there is some evidence that the decree also helped Continental take business away from American. As the older company, American had more large customers than Continental. When quantity discounts were thrown out, and five-year contracts prohibited, Continental’s salesmen had a chance to solicit those large accounts at competitive prices, and to press upon the canner the wisdom of having “two suppliers.” To their own large customers, of course, the salesmen sang a different tune.
The do-it-yourself threat
Apart from American, the competition that goads Continental is currently more a threat than a reality. But it is no less effective, for all of that, in keeping Continental’s prices low and its quality and service high. To begin with, there are scads of small, regional can manufacturers—eighty-odd—operating throughout the U.S. The antitrust decree has helped them some. They were not parties to the suit, and therefore may continue to grant quantity discounts; with Continental and American denied the use of quantity discounts, the little fellows can get a crack at business that was formerly closed to them. The small companies, however, rarely make inroads on the large national accounts. The new National Can and Pacific Can combine is something else again. With a starting volume of $75 million, National-Pacific is a contender for national-account business and it may eventually become a consequential competitor of American and Continental.
A more important competitive factor right now is the ability of large canners, if they so choose, to make their own cans. Campbell Soup (FORTUNE, March, 1955), which was once Continental’s largest customer, took this road back in the Thirties, and is now the third-largest canmaker. H. J. Heinz Co. has long made about 50 per cent of its cans, and just recently California Packing Corp. (the Del Monte line) began installing about $5 million worth of equipment and making some of its own cans, thereby cutting a sizable slice of business away from both Continental and American.
Cal-Pack’s move is a direct result of the antitrust decree. It used to enjoy the maximum quantity discount—3 per cent—on its purchases of cans, and wants to make up that differential, if possible, by savings in its canmaking venture. Other large canners are watching Cal-Pack’s experiment with keen interest. Very few of them have any deep desire to take on the added manufacturing burden, but their own profit margins are so low (lower, in fact, than Continental’s) that they’d be forced to take the plunge if competitors succeeded in making savings out of can manufacture, especially if those savings were reflected in lower prices.
Continental’s response to the challenge of the captive can plants—unless it wants to cut prices—is to step up its research and development, and its service. It must circulate the impression, and the evidence to back it up, that Continental has new machinery on the way that will make such canmaking machinery as canners are now able to install thoroughly obsolescent in four or five years’ time.
So to stay up where it is, Continental has to come through with a top-quality can at a rock-bottom price. The standard packers’ open-end fruit and vegetable can, for example, sells for 3 cents. Of the sale price, 67 per cent is absorbed by material and 20 per cent by labor and factory overhead. Division and head-office overhead takes 6 per cent. That leaves a spread of 7 per cent, or a profit before taxes of two-tenths of a cent per can.
With a unit profit that low, Continental has to depend on volume, of course, and fantastic rapidity of output. Continental produces most of its cans on machines that can spit out cans at the rate of 400 a minute, which is almost as fast as the old Browning machine gun pumped out bullets in World War I.
But there are a number of problems in canmaking that can’t be overcome by high-speed production alone. Obviously, tin cans—and most containers, in fact—present a storage and a shipping problem. “You’re shipping air,” is the industry cliché. To do business on a national scale, therefore, requires a multiplicity of plants. Continental has no fewer than eighty-one plants turning out its varied line of containers, of which forty-five are canmaking plants—there’s a can plant within short shipping distance of every important growing center in the U.S.—and these eighty-one plants represent an investment of about $235 million.
Also, canning is a seasonal business, and even within season it is at the mercy of the weather’s vagaries. Comes a cold snap or storm or drought, and canners’ orders for cans are cut forthwith. So efficient utilization of facilities and equipment is a constant problem to Continental.
Relieving the indigestion
This being the character of the canmaking business, one begins to see where a man of General Clay’s special capacities fits in. While Carle Conway, over the years, was buying up companies left and right, and piling up a tremendous volume of business fast, he was also piling up a tremendous amount of executive responsibility and detail in the central office in New York. Branch by branch, and plant by plant, the company was virile and efficient enough—in all its history Continental never had an unprofitable year—but at the top level it was beginning to suffer from organizational indigestion.
Conway was smart enough to see this, and to realize along about 1949 that Continental must either decentralize or burst a seam. “We had outgrown,” says Conway, who at that time was seventy-two years old, “any organization we had ever known.” And though the company was loaded with strong individual talents in engineering, sales, and manufacturing, no executive had been trained or tested in the broad art of decentralized administration. The orchestra needed a conductor, and Conway had to go outside for him.
Conway took the problem to one of his directors, the redoubtable Sidney Weinberg (“Let’s Ask Sidney Weinberg,” FORTUNE, October, 1953), whose mind is a ready index of available executive talent. Sidney at once suggested Lucius Clay who, in World War II days, had made a tremendous impression on Weinberg when they met at the council table of the War Production Board. Conway was barely acquainted with Clay, but knew of his great war record.
A graduate of West Point (class of ’18), Clay had chosen the Engineers Corps as his branch and as a young officer planned and supervised the construction of the Red River Dam at Denison, Texas. Later, he took charge of the civil-airport program, and built or expanded some 475 airports in the U.S. and its possessions. In March, 1942, at the age of forty-four, he was assigned to the late General Brehon Somervell’s command as director of materiel, Army Service Forces, a job that, for scope and intensity, was probably as big a business undertaking as any one executive ever tackled. The assignment, in brief, was to supply an army of 12 million men fighting on fronts thousands of miles apart. It encompassed responsibility for Army purchasing, contract renegotiation and termination, lend-lease, allocation of requirements, research and development, and production. In a remarkable public statement in 1949, Secretary of War Robert P. Patterson summarized Clay’s performance: “It is my considered judgment that to him, more than to any other individual, should go the credit for the success of the armament effort in the war years.”
But for his place in history, no doubt, Clay will be chiefly remembered for his “decision in Germany.” In the spring of 1945 he was named deputy to General Eisenhower, and soon thereafter became Military Governor of occupied Germany. For four years, without precedents to guide him, and often without clear directives from Washington, Clay carried on the task of maintaining the morale of restless U.S. troops, of ruling, punishing, and rehabilitating a conquered country, and most important, as it turned out, of conducting the cold war, at its hottest point, with the blustering Russians. It was General Clay who ordered the start of the great airlift that broke the blockade of Berlin.
The seat of authority
Such a man, Weinberg and Conway agreed, should certainly be able to run their can company. When the three met one evening in New York in March, 1950, to discuss the idea, Conway had two questions on his mind: Did Clay believe in decentralization? Clay said he did to the nth degree. “Then what do you think, General,” Conway asked, “is the function of staff?” Clay had a crisp, military answer: “The staff,” he said, “is the servant of the line.”
That was enough for Conway, and without further equivocation, Clay was offered the board chairmanship of Continental Can. A few days later he accepted, and the choice was confirmed at a special meeting of the directors. When Clay was preparing to move into Continental’s New York quarters, he was told he was to take Conway’s corner office. Clay demurred, but Conway said, “That office has been the seat and symbol of authority in this company for twenty-five years, and when you take over, that’s what you take over.” By stepping aside, Conway made possible an essential condition of decentralization; this condition, which may sound paradoxical, is that control over decentralization must be centralized in one man. And as FORTUNE has already pointed out (see “The Subtleties of Delegation,” March, 1955), Clay knew how to apply those informal controls, as well as the direct controls, that make decentralization really work. Long before coming to Continental, he once explained his lightning-quick cleanup of the port at Cherbourg, during World War II, in these terms: “We had a good port director there—but he had too many bosses. I simply took the bosses off his neck, and he was able to get on with the job.” This is an oversimplification but it describes, in essence, what Clay has been trying to do at Continental Can.
His first move was to loosen the knot at the New York headquarters, where operational control was concentrated to the detriment of fast action in the field. One man was named to head up both sales and manufacturing for each product line and given a maximum of authority. In his appointments Clay made the most of the able talent at hand. He took the pick of the executives from sales, manufacturing, and other fields and gave them new commands.
The divisions as they stand now are metal (packers’ and general-line cans), fibre drums, paper containers, crown and cork, and Shellmar-Betner flexible packaging. But the metal division, being by far the biggest—73 per cent of total dollar volume last year—is further subdivided into three geographical areas, each with a vice president reporting to the executive vice president for metals, Thomas C. Fogarty, in New York.
Each product division now has its own staff for engineering, research, manufacturing, etc., and each division vice president builds his own operating plan and prepares his own budget. Clay keeps as his own prerogative the approval of all budgets, and also the authorization of salaries beyond $700 a month, and capital expenditures over $25,000.
Clay carried his decentralization all the way back to the plant level. When he came to Continental, the plants were already being measured against a set of engineering standards that were excellent, but that involved no real identification with profits. Now each plant manager is responsible for profit, for budgeting, and for programing, as well as for operating his plant efficiently.
To turn about the whole organizational concept of the company in this fashion required concurrently, of course, the development of a new company-wide system of planning and reporting. To expedite this task Clay brought in some bright young men. At first, some old Continental hands feared that Clay was aspiring to reverse the flow of businessmen-to-government, and remodel Continental Can in the image of a Washington agency. The principal people who checked in were Clay’s former economic adviser in Berlin, Lawrence Wilkinson, named vice president for finance; Charles Stauffacher, former Executive Assistant Director of the Budget, who was made Continental’s control officer; and Raymond Fisher, ex-economist for the Office of Defense Mobilization and other Washington agencies, who expanded Continental’s bureau of economic and commercial research. (Last year Wilkinson became group vice president for all nonmetal divisions, and Stauffacher succeeded him as vice president for finance.)
It was not too long, however, before the doubts about the Washington carpetbaggers were dispelled. The new men conformed pretty well to Clay’s concept that the staff is the servant of the line. Continental’s “profit planning,” or budget-and-forecast system, is based on elaborate and detailed underlying data, but when the divisional reports reach top management—and they do so promptly—they are precise and sharply analytical.
Each month a comprehensive report is prepared showing production, sales, expenditures, and profit against the forecast for each division and even for individual plants, if they happen to be in the red. In addition, the report includes a survey from Ray Fisher on the economic outlook and an analysis of Continental’s performance, product by product, against the industry. And each month, with this report in hand, some twenty-seven top Continental executives, including all operating vice presidents and the New York staff officers, sit down with General Clay to discuss it. This meeting lasts about two hours. In the afternoon, division heads meet with their group vice presidents to thresh out their specialized problems. Clay makes it a point not to attend these subsequent meetings.
How much has this decentralization contributed to Continental’s success? It’s not the sort of thing that is susceptible to statistical proof. The system itself, of course, doesn’t make profits, doesn’t ring up sales. But if, by Clay’s skill in the art of decentralization, the chain of command is shortened, and decisions are speeded up, the company ought to do a better all-around job.
And there are other benefits that perhaps transcend the purely economic advantages. Under decentralization there has been a noticeable stretch in the stature of Continental people—in operations and sales alike. As one division officer put it, “Without really letting loose of established policy, Clay’s got everybody thinking he’s his own boss.”
The big diversification
A more immediate explanation of Continental’s swift rise is to be found in diversification—diversification both inside and outside the metal-can field. This was the policy before Clay; but Clay embraced it, and has carried it forward.
The big leap was taken in the company’s “general-line” can business. In Continental’s terminology this has come to mean almost any kind of tin can except the so-called “packers”‘ or fruit and vegetable cans. These are made plain, and the packer pastes on the desired paper label. By contrast, general-line cans are usually lithographed—Continental prints the label and the decorative design on the metal before the can is formed. Continental’s general-line production includes—approximately in the order of their importance—cans for beer, oil, meat, coffee, shortening and lard, and such miscellaneous nonfood products as paints, polishes, insecticides, aerosol sprays, detergents, aspirin, etc.
Before the war Continental’s total volume in these general-line cans—approximately $42 million—was less than its volume in packers’ cans. Since the war sales in both categories have risen tremendously, but the volume in general-line cans is now almost double that of packers’ cans. What is more striking is Continental’s showing against the industry. From 1948 through 1954, while total sales of metal cans were increasing 61 per cent, Continental’s sales went up 76 per cent—to about $450,000,000. And in general-line can sales, against an industry increase of 61 per cent, Continental registered a rise of 80 per cent.
It was in the contest for the market for beer cans that Continental showed its sharpest competitive form, and this after a near-disastrous start, too. Before the war, when beer in cans was still a dubious venture, Continental put its chips on the cone-top can. American chose the flat-top and ran away with most of the business.
After the war Continental adopted the flat-top can, and gambled on making a beer can of quarter-pound tin plate, instead of the half-pound tin plate then in use. This meant that the company could ship, out of its allocations of tin, twice as many cans to brewers. The beer-can market today is a $210-million market, and Continental has an estimated 40 per cent of it.
Frozen orange juice, on the other hand, was manna from Heaven. Nobody in the canmaking business saw this coming, but when it hit in 1948, Continental successfully scrambled for a big share of the business. It promptly expanded its Florida plant, and has since built two additional plants there in strategic locations. Frozen juice has added sales of $35 million to the canmaking business, and of that Continental has something like 40 per cent.
Bigger than beer
On the threshold—or so the canmakers hope—is something bigger than orange juice, bigger even than beer—namely, canned soft drinks. Among the innovators already in the market are Canada Dry, Pepsi-Cola, and several smaller companies. As yet Coca-Cola has made no marketing move.
There are some very special problems connected with the canning of highly carbonated drinks. They require a strong can, because of the pressure, and the high acidity of some of them is a challenge to shelf life. Continental consequently has been doing a tremendous amount of research on enamel linings and can construction.
Last year the soft-drink industry used only about 500 million cans. But Continental is titillated by this thought: the soft-drink market amounts to 30 billion packages a year. If the canmakers could get the same percentage of this market as they have of the packaged-beer market—about a third—that would be 10 billion cans, which, at $35 per thousand, would add $350 million to the canmakers’ pot.
Practice in plastics
Continental’s diversification into non-metal containers was not, at the outset, based on any particular design. In the early days of World War II, Carle Conway simply began scooping up companies in the paper and plastic fields in order to be able to stay in business if tin should be totally denied him. When Clay took over, he decided that with some pruning and additions the miscellany of plants he inherited could be organized to make Continental a broad, balanced packaging company, able to solve almost any packaging problem.
For instance, Clay expanded the company’s paper-container division, which now does over $30 million in sales and is third in the industry, after Lily and Dixie. He sold out a plant that made rigid plastic products, but then made the Shellmar and Betner purchases to form the flexible-packaging division. He also expanded the fibre-drum and crown-and-cork divisions.
Of the non-metal divisions, the fibre-drum division is the largest—with sales around the $50-million mark. Its star item is the Leverpak, a drum made of kraft liner-board that has a metal cover with a fastener that locks tightly. This container competes quite successfully with 18-to-20-gauge steel drums, weighs only half as much and, being non-corrosive, is superior for packaging dry chemicals. For years Continental had this field virtually to itself. But its basic patents have now expired, and Greif Bros. and Rheem Manufacturing are offering stiff competition. The flexible-packaging division is up against even rougher competition than fibre drums, and so far profits have been small. But Clay is confident that plastic packaging is a growth field, and says coolly, “In these purchases, we are getting research and development at a very cheap price.”
For these acquisitions, and for other expansion, Continental, since the coming of Clay, has gone to the money markets for some $30 million. In 1951 the company issued $20 million in debentures, and also sold about $10 million in $4.25 convertible preferred stock. Since then some older debentures have been called, others reduced by sinking-fund payments, and the $4.25 preferred has all been converted to common. The net of it is that Clay, while almost doubling the sales volume of the company, has increased the outstanding long-term debt by only 14,100,000 (from $51,500,000 to $55,000,000), and increased common shares by 488,000 (the company now has 3,646,000 shares outstanding).
This month the company is seeking permission to increase the authorized number of shares from five million to ten million, and authorization to borrow up to $25 million if needed. There is no specific expenditure contemplated at the moment, but Clay wants to be prepared if something desirable comes along.
Continental’s rapid growth in recent years has obviously required a persistent and intelligent sales effort. But curiously, the company’s sales organization is neither particularly large nor flamboyant. Continental does not go in for contests, pep meetings, “motivation research.” or the like.
In the entire metal-can division, which sells some 12 billion cans annually, there are only a little over 100 salesmen. Their sales, however, average about $4 million a year each. Continental salesmen are well schooled; they spend two years in training before they are exposed to customers. When they are assigned to an account, they are expected to live with it, and assume the role of the customer’s packaging adviser.
In Continental, everybody sells, including the executives. Over 70 per cent of Continental’s can volume is supplied by 200 customers, and those big customers expect, and get, plenty of personal attention from all the Continental brass, not excluding General Clay.
Perhaps the most valuable service customers get is research, Last year Continental spent more than $8,500,000 on research. Some $6 million was allocated to the metal division and this was divided about equally between equipment and container development.
This year, Continental engineers created a stir at the annual canners’ convention in Chicago when they demonstrated a can-closing machine that successfully closes 1,000 cans a minute (it can be geared up to 1,200 a minute for small sizes), which is almost twice as fast as closing machines have ever run before.
Another big research project both Continental and American are pushing is the elimination of tin from the “tin can.” And hand in hand with this is the effort to develop a welded can, to eliminate the use of solder, which also contains tin.
The trouble with tin is not only that its supply is precarious, and that it is expensive; it also has a comparatively low melting point that limits temperatures at which the can’s enamel lining may be baked. If enamels could be subjected to higher temperatures, they would protect the can’s contents much more effectively, and some chemists believe a universal enamel might be developed that would be suitable for all foods.
Today, only a thin coating of tin is plated on steel to make “tin cans.” The only reason it is used at all is because it gives better adhesion to the enamels. Without tin coating, steel oxidizes rapidly and no way has yet been found to make the enamels adhere properly. So that is one problem. The other is the banishment of solder, via welding.
Besides eliminating tin, the welded can would be stronger, would use less metal, and would require fewer operations to make. But it will be some time before manufacturing costs can be reduced to the point where canmakers are willing to replace their existing machinery. Yet for the peculiar problems that arise in canning soft drinks, the tinless, welded can may be the answer.
Clay has recently established a research outpost in the blue yonder. The central research and engineering division will delve into radically new materials and uses, devote itself to products and processes that may not pay off for three, five, or ten years, if then.
What Clay wants to see engendered in central research is a spirit of “dignified disrespect for the way things are done now.” For example, though the metal division is well along in its development of a welded can, central research is experimenting with two distinctly different methods of making welded cans, just in case. But beyond that, central research is working on a container that could eventually replace, for a number of products, the not-yet-born welded can. That would be the aluminum can.
Another central-research project that fires the imagination is the search for a method to produce and can a sterile milk concentrate that tastes like fresh milk. This is a long shot, but consider the stakes. The package market for milk runs to some 25 billion containers a year. If the canmakers could capture a third of it, milk, like soft drinks, would be even more fattening for the industry than beer.
These vistas General Clay finds thoroughly exciting, as he does, indeed, all aspects of his job. When Carle Conway sought out Clay, he was looking for a reorganizer and administrator, and on that score the General delivered with the dispatch that was expected of him. The bonus is in the tremendous upsurge in research he has inspired, and in his appetite for competition and sales. As the great and good friend of the President of the U.S., Clay has often been called away for important extracurricular tasks. Despite these demands, he has managed to run up an amazing record for visiting plants, for contacts with employees, even for calls on customers. For Continental, Clay seems to have been the right man, in the right place, at the right time.