Figgie International's palatial new headquarters -- a sprawl of tennis courts, gardens and colonial Williamsburg-style buildings on 1,200 acres just north of Richmond -- seems like an unlikely place in which to contemplate the destruction of the nation's economy.

But at an interview there last week, the company's founder, Harry E. Figgie Jr., talked as fervently about the economic armageddon he anticipates as he did about his plans to improve the profitability of his highly diversified, eclectic firm.

Hyperinflation is the disease that will undermine the seemingly healthy U.S. economy, Figgie said. It will strike in 1992, he said, because elected officials will take no significant action to reduce the federal budget deficit and the spiraling annual interest on the national debt.

Figgie plans to be a survivor. He is sending a representative to South America to find out how successful companies there have learned to cope with hyperinflation, so he can plan for the disaster. "I'm going to find out how the hell they do it," he said.

Figgie said he believes annual inflation in excess of 30 percent by 1992 will lead to fundamental changes, not only in the nation's economy but also in the system of government.

"As day follows night, hyperinflation is coming to this country, and it could wreck the republic," Figgie said. "I have never been as frightened. Your bank accounts won't be any good, your life insurance won't be any good, your pension plans won't be any good, nothing will be any good."

Figgie's startling views about the future of the U.S. economy are unusual. So are Figgie and the $750 million diversified company he heads, which produces products ranging from Rawlings baseball gloves and catchers' mitts to test instrumentation for the Navy's fleet ballistic missile program.

Consider the following: Figgie, a fifth-generation Cleveland native, has a law degree, a Harvard MBA, a degree in metallurgical engineering and a master's degree in industrial engineering.

Before he embarked on his boyhood dream of building a conglomerate in 1964, he specialized in sales and manufacturing with several industrial companies, spent nine years working as a consultant for Booz, Allen & Hamilton, where he specialized in turning around small and medium-sized troubled firms, and purchased two companies that formed the nucleus of a family-owned business.

The family firm, operated today by one of Harry Figgie's sons, is separate from Figgie International.

Figgie International is one of the most diversified companies in the world, reflecting its founder's philosophy that poor performance in one area will always be balanced by strong performance in another.

The downside of this strategy, which emphasizes stability, is that, structurally, it may be impossible for the company ever to be a stellar performer.

In 1970, the company consisted of more than 50 divisions, with average annual sales of only about $7 million each.

Today, the company, which employs about 12,500, has more than 40 divisions. They are divided into five groups: consumer, fire protection and safety, industrial machinery, technical products, and services.

Familiar Figgie operations include Rawlings Sporting Goods and Fred Perry Sportswear. The company has been moving its headquarters to Richmond gradually over the past two years, transferring approximately 130 employes in the process.

Analysts say they are encouraged by the company's strategy of reducing its debt by eliminating inefficient operations.

Figgie said he intends to continue this strategy for about another two years, as long as performance at least equals projections, before taking the company on an acquisition binge that will enable Figgie to reach one of the goals he set 20 years ago: $1 billion in annual sales.

Operating income fell in the last recession, but the company has remained in the black. The company still is striving to reach its 1981 peak of $769.9 million in sales and its 1982 peak of $26.1 million ($3.76 a share) in net income.

In 1984, the company had revenue of $720.7 million and net income of $17.4 million ($2.77 a share). Net income from continuing operations last year was $26.9 million, but the company suffered about $9.5 million in losses from unprofitable operations that were discontinued, including American LaFrance, the company's upstate New York-based manufacturer of custom fire engines that had consistently hurt the company's cash flow and earnings.

The company is heavily leveraged, and the chairman is determined to strengthen the balance sheet.

"In 1981, we got clobbered by the recession on the industrial side and some on the consumer and technical sides," Figgie said. "I decided I am not smart enough to run a heavily leveraged company in periods of excessive inflation because the rate of inflation is going to chew up your working capital. So I just said, hey, shut the place down."

That means trim the sails, in Figgie-speak, before damning the torpedoes when he goes out to do deals again.

"What I am really trying to do is get us on a solid base and then take us out again," Figgie said.

The company has known more difficult times than these, particularly in the early years, when cash was short, technical default was on the horizon and credit was hard to come by. Figgie knew he could turn the Automatic Sprinkler Corp. of America into a conglomerate, if only he remained determined and healthy. Figgie bought the sprinkler-manufacturing company in a fire sale in 1964 with borrowed funds.

"My dad and [Col. Willard F. Rockwell Sr., founder of a company that was merged with another in 1967 to form Rockwell International Corp.] started out as young men together," Figgie said. "I saw what Col. Rockwell did, and I wanted to do that. I never varied from what I wanted to do."

In the 1960s, when the company was growing rapidly through acquisitions, the chairman sometimes worked 20 hours a day. Comparable-sized companies would have had acquisition teams evaluating proposals and visiting targets. Harry Figgie was the staff.

"When we were really hot in the '60s, I was looking at 50 [targets] a month on paper," Figgie said. "I was physically walking through 10 to 12, negotiating with three and buying one a month. Along with that, I was building up all of these little divisions that had all kinds of problems. That was a workload that was just ungodly, like 20 hours a day. It was not uncommon for us to get on a plane at 5 a.m., fly to the West Coast, come back by 3:30 a.m., get a few hours sleep and be back on a plane the next morning. When we go out again, I won't go after so many little ones."

Figgie International left the New York Stock Exchange a few years ago because the chairman decided he wanted the company to have the freedom to create two classes of stock with unequal voting rights. Figgie is traded on the over-the-counter market, where the company has received approval to go to two classes of stock.

While it has not exercised this right, Figgie said the company will do so before it begins its acquisition program. The reason for having two classes of stock, Figgie said, is so that management can carry out its long-range acquisition program without having to fear a takeover.

By having two classes of stock, management can place a majority of voting power in friendly hands, protecting itself from unfriendly raiders while carrying out its plan. Otherwise, because the acquisition program could have a negative impact on earnings and the stock price in the short run, the company would be vulnerable to a takeover.

Because of his unusually strong commitment to his job, Figgie said he realized years ago that it would be impossible to be a good father, husband, chief executive officer and friend. He has been criticized by some in Cleveland, where the company was based before moving to Richmond, for being a private person. Figgie said it was a conscious decision.

"When my wife and I were going to get married, I told her what I wanted to do," he said. "When we really started to get moving in this business, she said to me that we couldn't run the business, have a social life and raise the kids. Something had to go, and it was the social life. Many people don't understand us because we are a very private family and we don't socialize. That doesn't bother us."

One thing that concerns Wall Street analysts who follow the company is that when Harry Figgie is no longer at the helm, nobody else will have the ability to direct the enterprise.

While operating responsibility in the decentralized company is at the divisional level, analysts are afraid that the important role Figgie plays personally in the annual divisional planning processes and in solving unusual divisional operating problems is critical.

When the president of the company retired several years ago, rather than replacing him, Figgie assumed the responsibility of being president in addition to chairman and chief executive. Figgie is 61 years old.

One way of looking at this is to consider that Harry Figgie is a master of turning around troubled businesses. He is a man who thrives on solving manufacturing and sales problems. He is the glue that holds the company together.

Some have criticized him for being too involved in operating problems, but he has never learned to stay away from the trenches and concentrate exclusively on directing the battle.

"I am a field general as opposed to an armchair general," Figgie said. "I can't sit in an office. I have to be out there. It really helps me to have been there when the paper was blank. I bought all of these businesses, and I stayed with them. We have thorough discussions each year for four to eight hours with each division, and I physically go and visit the troubled ones. I really do understand all of these businesses and the managers."

Figgie believes managers should focus more on cutting costs than expanding revenue. He complained that his managers are much better at predicting and attaining sales goals than they are at predicting net income.

A Figgie cartoon emphasizes the message: "It's not the revenue that makes you," it says, "but the overhead that breaks you."

Figgie has written a handbook, "The Cost Reduction and Profit Improvement Handbook," to guide others who want to follow his suggestions for improving profits by cutting costs.

The company has ambitious plans to develop the 1,200 acres it has purchased for approximately $12 million near Richmond. But much of that development, which includes conference centers, office parks, retail shops and office buildings, probably will not take place until the company disposes of the 105 acres it owns outside Cleveland -- something it has tried unsuccessfully to do for the last two years.

Shearson Lehman Brothers analyst Sidney J. Heller recently added Figgie to Lehman's recommended list because the stock sells at a low multiple and the company appears ready to improve profitability by disposing of operations that have kept its cash flow and balance sheet weak.

"The company that emerges should be a stronger entity with enhanced profitability and growth prospects," Heller wrote. "We regard the closing of American LaFrance as the first definite sign of Figgie's new realism."

Figgie stock already has had a good move from a depressed base, but a further 50 percent gain in the next six to 12 months seems quite possible.

"It will take time for Figgie . . . to show satisfactory profitability," Heller said. "The market may not fully recognize the change until all the cards are on the table."

"What I jokingly say inside the company is that we are in grave danger of becoming a mediocre company from being a real sow's ear," Figgie said.