Chapter 27: The Plan to Absorb Martin

The name Glenn L. Martin Company might sound unfamiliar to most, but the new entity formed after its subsequent two mergers is world-renowned: Lockheed Martin. The "Martin" in Lockheed Martin comes directly from the Glenn L. Martin Company.

There is a distinct advantage to facing problems with the answers already in hand. The reality is that George Arthur was simply not up to the task—he wasn't in actual history, either. General Electric failed to make the shortlist and eventually could only serve as a supplier of minor components for NASA’s moon landing program. In the records of the Apollo moon landings, George Arthur is a non-entity.

The Glenn L. Martin Company, however, was a different story. It was a finalist for the Apollo command and service module contract, even though it lost to North American Aviation in 1962. Later, it played a pivotal role in the Space Race through projects like the Vanguard rocket and the Titan series. Beyond its inherent value, its stellar engineering team, and its successful track record of manufacturing bombers, one must consider that, from a god-like perspective, the Glenn L. Martin Company would complete its merger with the American-Marietta Corporation in two years.

Since a merger is inevitable, the Morgan family, already owning General Electric, has the opportunity to seize the initiative for such a consolidation. John Morgan had been pushing for the independence of the aerospace division for some time, so the name Glenn L. Martin Company was naturally familiar to him.

"The Glenn L. Martin Company?"

Lin Ran continued his explanation: "Yes. General Electric's current engineering team is far too weak. Even if our feasibility report is approved, we will still have to rely on external suppliers for the subsequent project execution. Since that is the case, why not merge with a potential external supplier ahead of time? In my view, the Glenn L. Martin Company would be the best candidate. As for the specifics of the merger, my 30 percent stake can simply be diluted proportionally."

John Morgan hesitated. "I will look into it, but the Glenn L. Martin Company is not so easily acquired. The aerospace division of General Electric, if spun off entirely, has only two thousand employees. At its peak, the Glenn L. Martin Company had over fifty thousand, and even after the war, when the headcount dropped, it still had over ten thousand staff. Their revenue and profits are far greater than those of GE’s aerospace division."

Lin Ran looked him straight in the eye; he had more faith in the power of the Morgan family than John Morgan himself did. "This is indeed a 'snake swallowing an elephant' scenario, but they need the Morgan family just as much. You are not having General Electric Aerospace swallow the Glenn L. Martin Company; you are having the Morgan family swallow it."

Every time John Morgan met with Lin Ran, he hoped to seize the initiative, yet he never succeeded. He often tried to find flaws in Lin Ran's suggestions, but he couldn't grasp the technical side—GE’s engineers were kept on such a short leash that once, when an engineer dared to offer two sentences of rebuttal, he was left speechless by Lin Ran’s follow-up questions. Now, he found that even in commercial operations, the other man’s suggestions were more refined.

If success were the absolute prerequisite, merging with the Glenn L. Martin Company was indeed a sound choice. Companies more formidable than that, such as Boeing, would never sell. Boeing had maintained a stable workforce of over fifty thousand employees and was a behemoth that had surpassed one billion dollars in revenue by 1960. Never mind him—even his grandfather, the elder J.P. Morgan, might not have been able to pull that off. As for companies weaker than the Glenn L. Martin Company, it would be better to simply hire new engineers and poach teams from competitors.

The more John Morgan thought about it, the more he felt it was a good idea, yet it remained immensely difficult.

"Randolph," John Morgan explained, "I need to further evaluate the acquisition of the Glenn L. Martin Company. The difficulty is simply too high. Furthermore, the company is a key supplier for the federal defense industry. This acquisition will face strict scrutiny, especially considering the Sherman Antitrust Act and the Clayton Antitrust Act. The Department of Justice might also intervene. Even if our two sides agree to the merger, we will still face pressure from the federal government."

General Electric was also a core defense supplier, providing engines for the J47 and J79 fighters, as well as a large amount of aircraft electronics.

Lin Ran thought for a moment before saying, "I understand. Let's wait until the end of the year, when NASA issues the tender for the return to the moon. Once our proposal defeats all competitors and wins the bid, it will be more appropriate to approach George Bunker of the Glenn L. Martin Company."

George Bunker, the Chairman of the Board of the Glenn L. Martin Company, would be one of the key proponents of the merger between his company and American-Marietta two years later.

"You need to signal to him that a merger with General Electric would allow both parties to complement each other's technical expertise in aerospace. Furthermore, General Electric can provide the financial support to enhance Martin’s ability to compete with giants like Boeing and Lockheed in a highly competitive market."

...

After meeting with Lin Ran, John Morgan flew without delay to Huntsville, where he had an appointment to meet Haynes. Indeed, this was the same Haynes, the NASA engineer, who had stayed at Lin Ran’s home in New York for two nights.

Haynes worked at the Redstone Arsenal, which was located southwest of Huntsville, Alabama, and spanned nearly forty thousand acres. On July 1, 1960—just four months later—NASA’s Marshall Space Flight Center would be established on the foundation of the Redstone Arsenal. At present, it was not yet called the Marshall Space Flight Center, but due to the existence of the Redstone Arsenal, a large number of scientists, engineers, and military personnel had already gathered there, bringing the preliminary prosperity to the surrounding city of Huntsville.

The hotel where John Morgan was to meet Haynes, the Russell Erskine Hotel, was one of the most luxurious in the area. Built in 1930, it was famous for its high-end Southern cuisine.

By the time he walked into the restaurant, dressed in a handmade navy blue double-breasted suit from Chipp and looking travel-worn, Haynes had already been waiting for some time.

"Mr. Morgan, you look very handsome today," Haynes joked. He had interacted with this man a few times because of Randolph, and the two had already developed a preliminary rapport.

"Is that so? It was handmade for me by Chipp in New York. If you're interested, I can give you his card. Compared to the Brooks Brothers favored by the older generation or the more traditional Savile Row, I prefer the more modern Ivy League style of Chipp."

"By the way, would you be interested in coming to work for General Electric?"