Return with us now to those thrilling days of yesteryear, long before the looming gigantomachy, when the state cult of capital supported the complex interactions of corporate entities, together with their myriad subsidiaries and allied forces, that create something like but not exactly the world: the "market." The capitaline gods had ticker-symbol names of one to four letters (plus extensions) and their movements were closely recorded in increments of the dollar. Like all false gods, even the greatest companies were fundamentally mortal: they were born, competed for finite resources, rose and fell, were lionized and demonized, reproduced, died and their corpses in their season generated new life. In the meantime the corporate entities provided the organizing principles on which citizens of the empire increasingly patterned their own activities.
Charles Dow was the prophet who codified the rites. He is depicted as a composite two-headed figure, half bear and half bull, or else as a bearded man constructed out of zipatone. He lived from 1851 to 1902, and when he was done he had given his disciples the Wall Street Journal [DJ] and the black art of market analysis. Even the laity remembered him as the guy who arranged the then-scattered titans of industry into an authoritative (thus imperial) pantheon, so that a century later anyone with Internet access could consult his "index" [DJI] and say the gods were smiling or stern in the way that previous diviners gauged the fortunes of empire from the activity of wind, water and chicken parts. The list of companies on the index ebbed and flowed, but the index itself harbored aspirations to eternity. In the years before the gigantomachy, the Dow 30 collectively represented one out of every four dollars held in the U.S. stock market.
Now when occupying an empire that hath such giants in it, one can join the other citizens and participate in the state cult. Those who are more ambitious can, with a little luck and talent, squeeze personal advantage out of the activities of the giants and so become moderately wealthy. Still others study the giants to better emulate or fight them. Novice analysts and other relatively innocent people disdain conversation with the Dow 30, preferring to align themselves with the novelty names that have growth potential, the little new things ready to explode. But it's the giants that draw the map of the world, who ride the cloud of smaller corporations like the corporations ride us, and it's their trajectories the adults watch, hunting the management secrets of the past, a competitive edge on the present and the shape of things to come.
"What is good for America is good for General Motors, and vice versa."
Take General Motors [GM] for example. GM has gone from the embodiment of American industrial power (for 37 out of the last 52 years, it was the largest U.S. corporation, which is to say the largest western-style corporation in the world) to the edge of bankruptcy. Its humiliations are obvious, the solutions less so, but even wounded it is a giant worth $12 billion. Its credit rating is in the toilet, and that's especially dangerous to it because until last week, GM was famously a finance company: the cars are only the excuse for its lending activity, the occasion that brings us together. They invented leaded gas in collaboration with their sometime puppetmasters in DuPont (q.v.). They snuck up on mass transit in the crib and they strangled it so that even if the American people were too poor to buy (or finance) their own cars, they'd still be riding in cars. They invented strategic planning, the decentralized conglomerate management structure and brand ecology. Anyone who has any pretension at all of leading a modern organization -- gnostic or otherwise -- can learn something from the way GM managed the entire ecosystem (supply chain and all) it needed to survive. As such, it was the first "human" corporation. Their marketing strategy basically created the prime time television calendar. They ruled Detroit, still rule Detroit and were indirectly responsible for the Empire State Building. Even today, stumbling around half-blinded like a bull with the darts of nimble little global competitors in its neck and fixed labor costs chained around its withers, GM is the biggest auto manufacturer in the world and has a vast retail network. It could easily go yellow for green and turn red back into black or whatever the slogan is, if it really had the will to do so. Do you want it to live or do you want it to die? Clap your hands as the parade comes through, because the next time Mr. Dow's shadowy heirs meet to choose a new god it will be because it's time to drop GM from the list.
"Be the best company in the world."
And they'll probably drop Alcoa AA], the last of the Pittsburgh titans, while they're at it, even though it's still a great company and actually the biggest aluminum producer the world has ever seen. In fact, AA invented commercial aluminum [sic]. If not for them, primary Al would be more expensive than silver (if not gold) and we'd need to find something else to wrap our stuff in and the world would be a heavier place. They had a monopoly on aluminum for a half century, rivaled only by their own subsidiaries and Nazi ingenuity. The jury is still out on whether they also invented Alzheimer's. Because the refining process is electricity-intensive, AA has always been hungry for power; at one point they owned five of the 26 Tennessee Water Authority hydro plants outright. But bauxite is plentiful, so as long as they had juice, they could (and can) roll all the metal they wanted -- and so the real challenge was in getting people to come up with new industrial applications for their new substance (aluminum was the wonder nano material of the pre-plastic epoch). Furthermore, once you've refined the metal, just melt it down and sell it again at full price; AA invented recycling as a business tactic. They still have a lot to teach anyone who is creating new markets or who truly has a revolutionary product to sell. Today, Chinese competitors are eating their share of the global market, even though worldwide demand for aluminum is spiking. The arc from monopoly to niche supplier should remind us of U.S. Steel [X]: too slow to adapt, too big to die. Otherwise, the business is incredibly sustainable (it should literally last as long as those cola cans on the side of the road), but the fact is that Wall Street doesn't care about mining companies any more. This may actually be more Wall Street's problem than AA's. The company is best known for Reynolds wrap and Paul O'Neill, the best Treasury Secretary we've had in years. He's an odd guy.
"Integrated production: Integrated automation!"
Industrial conglomerate Honeywell [HON] might also go for a similar reason: they're just no longer sexy enough to keep the Wall Street Journal's current readership interested (again, this is Wall Street's problem). They also have an extra strike against them in that Mr. Dow's heirs never actually picked HON to the holy 30 -- the company basically bought its way into the pantheon by merging with another industrial conglomerate, AlliedSignal (itself formerly Allied Chemical, Signal Cos., Bendix and others), and as the age of diversified manufacturers wanes, its fortunes within DJ likely wane too. Still, it's a great old company. Honeywell built the first American hot water heaters. Even today, through various subsidiaries they make a staggering percentage of the world's thermostats as well as industrial controls, instruments, the nervous tissue of our world of analog stuff. They invented autopilot. I like them quite a bit, but they took an early start in the computing industry and pissed it away, only moving their old electro-mechanical switches to a digital universe relatively recently. They do, however, demonstrate the paradox of adaptability (at one point AlliedSignal was best known as an oil exploration company) and continuity for any organization that wants to thrive during its lifespan. They're about calibration, precision, focus. HON also illustrates the danger of failing to evolve. In today's consumer-driven economy, they're best known as a sort of luxury "meta" brand -- a "b2b brand," the kind of company that advertises on the Sunday morning chat shows even though they have nothing to sell the typical TV audience but their stock (see also: Boeing, IBM). And that level of anonymity can be precarious. Lockheed Martin [LMT] or even Raytheon [RTN] could easily replace them in the Dow and few would recognize the difference.
"The miracles of Science."
We've already met DuPont [DD]; the family controlled General Motors for close to four decades. DuPont started as a gunpowder company but ran afoul of the anti-monopolists; they spent awhile making paint and eventually grew into the gods of polymer chemistry. They invented cellophane. They invented nylon. They invented polyester. They invented spandex! They invented Teflon and, more importantly, invented the still-secret process by which Teflon is made to stick to things. During the years of their hegemony over GM, they produced most of the plastics, fake leather, fabrics, paints and other coatings built into that company's cars. They also invented the "regular" (leaded) gas on which those cars ran. More recently, they got directly into the oil business in order to protect their hydrocarbon feed stock -- plastics, as Mr. Robinson tells Benjamin -- but now they're off the petroleum platform and back working with cellulose, formerly the polymer feed stock of choice for poor men, Nazis and other weirdos. To smooth the transition, DD has incidentally gotten into the genetically modified agri tech industry in a pretty big way. Bottom line: They're here, they're supremely adaptable, and they have a plan. Maybe it'll work out for them and the new celo platform won't suck as much as that crappy stuff they had to use during the war. Maybe it'll be spectacularly biodegradable and the eloi will inherit the earth. Either way, until we know how well that works out for them, DD isn't going anywhere, and it would take another upheaval of French Revolution scale to get it to budge out of Delaware.
"The sun never sets on the Golden Arches."
McDonalds [MCD]. Billions and billions served. They're the gods of meat, and over here they're the collective stomach of the hungry masses, working poor, kids, anomic teens, harried moms. But in the global market, they're a symbol of American health and affluence. They didn't invent the burger but they turned it into a scalable business process, a lifestyle. They buy one out of every ten American potatoes to make their tasty "beef"-flavored fries (the mystery ingredient is actually sugar) and kill an estimated 30,000 cows every day. To paraphrase Spalding Grey, they're the reason there's no concept of "mealtime" any more, no ritual of ingestion, just the regular intake of burger-shaped nutrition pills. They're like the opposite of India, only with a much larger per capita GDP. Of course they have their challenges ahead, their weak points. They're married to the meat economy, and anything that maddens that particular sacred cow could cripple the MCD and eliminate all trace of Wendys [WEN] from the face of the earth. They're also married to the American Way (Ray Kroc you polyamorous fool!) and so anything that impairs the projection of the American mystique will derail their growth in those precious overseas markets ("bon débarras," those insouciant frogs will say), and what people fail to understand is that if MCD stops growing it, like Starbucks [SBUX] or a shark, becomes an unsustainable enterprise. Finally, if someone were to teach its domestic market new and more diversified relationships to food, the enterprise is too efficiently specialized on the burger platform to adapt. Salads defy the MCD system; it's hard enough to get a bespoke fish sandwich in that damn place let alone your choice of "fresh" vegetables pulled and processed in real-time from inventory. What would hummus do to them? Any revolutionary and/or aeonic system needs to consider its relationship to the stomach and at the moment the Arches are the wings of the demiurgic angel thereof.
"Best Service .. Best Quality .. Best Support .. and Best in Class"
You know, I know almost nothing about Caterpillar [CAT]. Sure, they're the world's biggest heavy machinery manufacturer. Sure, they more or less invented the tracked vehicle (and thus almost casually, the modern military tank). Sure, every child whose house hasn't been destroyed by bulldozers thrills to the sight of that special bright yellow adorning a massive earth-moving device. They're having a pretty good time right now in the Asian construction boom. I see them increasingly spinning out their operations to emerging regions where the action is and where labor isn't quite so uppity. Eventually, they may decouple from the dollar entirely. Those people are built tough. They started out as farmers. They don't do a lot of talking.