The tag-team takeover fight between Martin Marietta Corp., Bendix Corp. and United Technologies Corp. has turned into the corporate cliff-hanger of the decade, a big business battle as impossible to predict as last week's Redskins-Eagles game or the Orioles' race with Milwaukee.
A week ago Bendix's bonus-baby quarterback William Agee had been sacked so severely that the corporate punter was headed onto the field. Bendix was in such deep trouble that Agee and other top executives had to give themselves a $15.7 million no-cut contract to assure they didn't end up in the minor leagues.
Agee had tried to throw the bomb by making an unsolicited bid to buy Martin Marietta. Marietta Chairman Thomas Pownall not only intercepted the pass, he recruited United Technologies' Chairman Harry Gray to run it back. With Marietta and UTC both trying to buy Bendix, Agee was flat on his back.
Down, maybe, but not out.
As of this morning Bendix owns 58 percent of Martin Marietta and is trying to persuade a federal judge in Baltimore that it has won the match. Marietta, meanwhile, has offers to buy 63 percent of Bendix and insists it will do so on Thursday.
United Technologies is on the sidelines, watching Bendix and Marietta grapple like two snakes swallowing each other's tails.
The theatrics are so compelling that no one is paying much attention to the economic implications of the game. What's being overlooked is the growing possibility that there will be no winner.
If all three players were to quit and go home today, they would leave behind millions of dollars in legal fees, public relations bills and other expenses. The drain on corporate energies and employe efficiency has cost even more; ask anybody who works at Martin Marietta headquarters in Bethesda.
It's too late now for such a truce, too early to predict the final outcome, but an appropriate time for a Monday Morning quarterback to speculate on the possibilities:
If Bendix holds onto its lead and gains control of Martin Marietta before either Marietta or United Technologies buys up Bendix, Agee will get what he wants.
What he wants is the high-tech and aerospace businesses of Martin Marietta. Marietta's aluminum, cement, construction materials and chemicals divisions could be sold off. The aluminum operations lost money in the second quarter; cement and aggregates are cyclical businesses suffering from recession; chemicals have a questionable future. The only likely buyers are companies already in those lines, so competition would be reduced.
Sale of any of the Marietta operations by Bendix would certainly mean a loss of headquarters jobs for Montgomery County. Even if Bendix keeps Marietta's business intact, there is the threat of losing the largest industrial company based in the Washington area. Unless Bendix decided to move its home office here -- and that is certainly a possibility -- Agee would likely consolidate top management at his Michigan offices.
If Martin Marietta wins and takes over Bendix, it too would be likely to consolidate some operations and spin off others. In that case, Michigan would lose the jobs.
If United Technologies gets Bendix, Gray says he will sell part of the company to Marietta. Montgomery County wins; Michigan loses.
The most destructive possibility of all will occur if Bendix and Marietta continue buying each other's stock. Each company will drain away its own cash and take on hundreds of millions in new debt.
The surviving management will preside over a cash-poor, debt-laden company lacking the resources to achieve any benefits from the consolidation. That possibility is said by Wall Street analysts to be the reason UTC Chairman Gray has gone to the sidelines; he's too smart to buy a crippled company.
Even some combination of the two companies under a less damaging scenario could have serious costs for the economy as a whole and dubious benefits, as congressional critics like Sen. Howard Metzenbaum (D-Ohio) have been complaining for years.
No fan of big business, Metzenbaum contends mammoth mergers are good for the economy only if they enhance corporate efficiency, increase competition in the marketplace or lead to the creation of new jobs. There's no evidence any of those benefits would flow from any of the possible outcomes of this situation.
Between 1980 and 1981, United Technologies cut its workforce by 8,000 employes and the Bendix staff shrank by 5,000, a 13,000-jobs reduction that does not bode well for Marietta.
Some antitrust lawyers argue that a United Technologies purchase of Bendix would curtail competition in high-technology manufacturing. Bendix and UTC are in some of the same businesses -- most notably gas turbines -- and they are potential competitors in other fields. There are certain Pentagon projects now in the research and development stage for which Bendix and UTC might ultimately compete. But instead of two strong suppliers, the Defense Department would be dependent upon a single contractor if the two merge.
Finally, there is the cost to economic growth that results from the Bendix decision to try to expand by acquisition rather than by investing in new plants, new technologies and new businesses.
The $1 billion that Bendix is spending on Marietta stock could create thousands of jobs -- perhaps a whole new industry -- if it were spent instead on research and development in genetic engineering, solar energy, semiconductor research or any one of a number of other emerging technologies.
America's GNP pie does not get any bigger when one company plays corporate Pac-Man with another; the pie is simply cut up in different ways. A billion-dollar gamble on research and development might not provide such exciting spectator sports for Wall Street, but it could pay better dividends for all of us.