Coming on strong: with the economy on the upswing, the B.E. 100s broke the $10 billion barrier and got back into the business if job creation - 1993 corporate results - Black Enterprise 100s: Industrial/Service and Auto Dealer - Cover Story

Black Enterprise, June, 1994 by Alfred Edmond

What a year! It still remains to be seen whether an economy on the rebound can keep inflation in check and whether the stock market can keep the bears at bay. But 1993 will certainly be remembered as one of the best years ever for the BLACK ENTERPRISE 100s.

Last year, the BE INDUSTRIAL/SERVICE 100 and the BE Auto DEALER 100 broke the $10 billion gross revenue barrier for the first time. With combined 1993 sales of $10.28 billion, the revenue growth of the BE 100s was 13.9%--not as large as 1992's 14. 1 %, but still ahead of the 1993 revenue growth rate of only 4.5% for the Fortune 500.

More important, the nation's 100 largest black-owned industrial/service companies and 100 largest black-owned automobile dealers experienced their first major boost in employment--an incredible 20% increase--since 1988.

Billed as a comeback year for the American economy, for African-Americans 1993 was filled with more confusing subplots and unresolved story lines than a made-for-TV movie--family feuds, dramatic comebacks, desperate gambits... Here are just some of the cliffhangers of BE's 22nd Annual Report on Black Business:

* Have Visa, Will Travel starring Loida N. Lewis and Jean S. Fugett Jr. The nation's largest black-owned company, TLC Beatrice International Holdings Inc., launches a search for a new CEO--nearly a year to the day after the sudden death of founding Chairman and CEO Reginald F. Lewis. Lewis' widow, Loida, an immigration attorney and informal business adviser to her husband, assumes the chairmanship of the company. Moved over, if not out: Reginald's successor and half-brother, CEO Jean Fugett, an attorney who led the food processing and distribution business--with operations primarily in Western Europe--through a European recession. Will a new CEO boost TLC's value to shareholders? And if so, will the company ever go public?

* Dynasty--The Final Episode? starring Joan B. Johnson, with a cameo appearance by George E. Johnson. The CEO of Johnson Products Co. approves a $67 million merger between the Chicago-based black haircare manufacturer and IVAX Corp., a white-owned cosmetics and pharmaceutical conglomerate. Joan Johnson's former husband, the company founder who gave up controlling interest of Johnson Products in a divorce settlement, rails against the loss of one of the nation's most prominent black-owned family businesses. Will Johnson Products be bleached of its legacy of black entrepreneurial achievement?

* Land of the Rising Yen starring the BE AUTO DEALER 100. African-American auto dealers, long penalized by their inability to gain foreign dealerships during the Japanese automobile boom of the 1980s, are in the right place at the right time when Ford, General Motors and Chrysler make their comeback. The plot is driven by a rising Japanese yen, which makes Japanese cars more expensive than their Big Three counterparts. The result: A record sales year for die BE AUTO DEALER 100. But will there be enough new-car buyers in 1994 to continue to let the good times roll?

* Risky Business starring Carl Jones. Threads 4 Life, last year's BE Company of the Year and the maker of clothing and other products under the Cross Colours and Karl Kani labels, abandons manufacturing and switches to licensing its labels. Early losers: The nearly 200 employees who were let go when the California clothing company shut down its capital-intense manufacturing operations. Can Threads 4 Life CEO Jones avoid losing his shirt as well?

* Smith vs. Smith starring Joshua I. Smith Sr., and costarring Joshua I. Smith II, but not exactly in a supporting role. The suit and countersuit between Maxima Corp.'s CEO and his son, involving $675,000 in company funds, underscores the perils of mixing family with business. But this is far more than a courtroom drama: Will the systems engineering company, which hasn't turned a profit since 199 1, pay the price?

* And Then There Were Five starring Albert W. Johnson Sr. in his farewell performance. After 21 consecutive years in the ranks of the BE 100s, the CEO and founder of Al Johnson Cadillac-Avanti-Saab Inc. retires, selling his dealership back to General Motors. Along with the IVAX/Johnson Products merger, this reduces the number of companies that have been on every BE list of the nation's largest black-owned businesses to five, with only one auto dealership among them.

* The surviving five are Johnson Publishing Co., Earl G. Graves Ltd., Essence Communications, H.J. Russell & Co. and Conyers Riverside Ford. Are BE 100s CEOs surnamed Johnson becoming an endangered species?

AN ECONOMY OF FITS AND STARTS

The dramatic performance of the BE 100s was shaped in 1993 by an economic recovery full of fits and starts--not unlike the administration currently presiding over the nation's economic health. Bill Clinton's first-quarter term will be remembered for a long-awaited increase in consumer demand, a bullish stock market (although a bear season has seemed imminent in recent months), falling long-term interest rates and heated debate over the merits of the president's economic plan and health care reform efforts. While the leading economic indicators were often contradictory and the unsettling stench of layoffs filled the air, reports that the nation was regaining economic strength had far more credibility in 1993 than they had the year before.