Ash, Roy Lawrence
ASH, Roy Lawrence
(b. 20 October 1918 in Los Angeles, California), corporate manager, financier, and government official, who built Litton Industries into a modern conglomerate enterprise; directed the Office of Management and Budget for two presidents; helped introduce modern accounting methods to government work; and advised President Richard M. Nixon to create the Environmental Protection Agency.
Ash was born the son of Charles K. Ash, a grain and hay broker, and Fay E. (Dickinson) Ash. Ash attended public schools in Los Angeles, including George Washington High School and Manual Arts High School, graduating in 1935. He then landed a job with the Bank of America Trust and Savings Association in Los Angeles, where he worked for the cash collection department, eventually moving to administrative positions.
In 1942 Ash joined the U.S. Army and attended its officer's candidate school. There he was selected to join the U.S. Army Air Corps' statistical control division, which was headed by Charles B. Thornton. Ash's genius for managing a diverse inventory was important to modernizing the management techniques of the air corps. On 13 November 1943 Ash married Lila Marie Hornbek, with whom he had five children. When he was discharged from the army in 1945, he held the rank of captain.
Thornton and many who had served under him joined the Ford Motor Company after the war, becoming known as the "whiz kids," but Ash chose to go to school instead. He had been based at Harvard University, and he was admitted to Harvard's Graduate School of Business Administration on the strength of his work in the army, even though he did not have a bachelor's degree. He received his M.B.A. in 1947.
Ash then went to San Francisco to work at Bank of America's headquarters as its chief of statistical control. Meanwhile, Thornton had taken a job with Hughes Aircraft Company, and he persuaded Ash to join him in 1949. In 1953 they pooled their resources and founded their own company, Electro-Dynamics Corporation. Ash used his little corporation as a base for soliciting investors, each of whom purchased $29,200 in stock. He used the investors' money to leverage bank loans, and in 1953, he and Thornton purchased Litton Industries, an electronics company that was doing about three million dollars per year in sales.
This was the beginning of what business historians consider the modern age of conglomerates and mergers. Throughout the 1950s Litton Industries, under the guidance of Thornton and Ash, purchased technology companies that were often bigger than Litton Industries. For instance, in 1958, they bought a controlling interest in Monroe Calculating Machines Company, which then had annual sales of $45 million per year, compared to Litton Industries' receipts of only $30 million per year.
Litton Industries entered the 1960s with annual sales of $245 million and forty-eight factories in nine nations. By then, the original fifty investors from 1953 had made more than $4 million each on their investments. In 1960 Ash was named president of Litton Systems, Inc., the subsidiary that focused on military contracts. In 1961 Thornton stepped down from the presidency of Litton Industries, while retaining his position as the corporation's chief executive officer (CEO), and Ash received formal recognition of his contribution to the company's success by becoming its president.
Litton Industries thrived in the 1960s by making each of its many divisions—fifty by 1966—an independent enterprise. The leaders of each division were entrepreneurs who made their own decisions about what to manufacture and how to sell it without having to consult with Thornton or Ash. The idea was to let every manager spread his entrepreneurial wings and thrive; but this experience and training resulted in many other corporations hiring away Litton Industries' managers, creating corporate executives known as "Lidos," for "Litton Industries Dropouts."
By the end of 1966 Litton Industries had annual sales in excess of $1 billion, with net earnings of $55 million. It made over six thousand products in factories around the world. The expertise of Litton Industries' leaders was in demand for virtually every kind of large enterprise. The United States government hired the corporation to train candidates for the Job Corps, and it was even hired by the government of Greece to manage the industrial and economic development of the island of Crete. Yet in the last quarter of 1967 and the first quarter of 1968, Litton Industries' earnings dropped, and its stock prices soon dropped as well. The problem was partly the drain of good management talent, the "Lidos," which hurt the growth of some of the corporation's subsidiaries, and partly a result of the general economic malaise engendered by the inflationary factors of high domestic spending programs and the expense of the Vietnam War. However, Ash was able to reenergize the Royal typewriter division, in particular, and by 1969, Litton Industries had resumed growing.
In 1968 Richard M. Nixon was elected president of the United States, and he appointed Ash as the Director of the Office of Management and Budget (OMB). The OMB kept track of government spending, detecting waste by auditing various parts of the government, and Ash proved brilliant at this. He remained as director during both the Nixon and Ford administrations. He had direct access to the president and was called upon to advise him on how to solve problems in administering government programs. Nixon had extensive ambitions for solving America's domestic problems. His political instincts forced him to lend an ear to those who had concerns about issues like affirmative action and the environment, even though these were areas of less interest to him than foreign affairs. Ash recommended that a special agency devoted to preserving the health of the American environment be created. This was the beginning of what the Nixon administration named the Environmental Protection Agency.
Ash made the biggest public gaffe of his career when in 1972 he told a journalist that he believed that in twenty years the world's economy would be controlled by one central authority. For the rest of his life, he regretted this remark, which seemed to imply that the United States and other nations would lose their economic independence.
Ash continued his involvement in public service by helping to organize the Los Angeles Summer Olympics of 1984. From 1977 to 1980 he was an adviser to the Republican National Committee. As well as serving as a board member for several charities and colleges, he worked as an adviser for several corporations. During the 1980s, when Bank of America was in serious fiscal difficulty because of bad loans and loan defaults, he helped put the bank back in financial order and served as a public spokesperson who reassured investors that the bank would survive.
There are no autobiographies or biographies of Ash. Works examining Litton Industries and industrial conglomerates include Beirne Lay, Jr., Someone Has to Make It Happen: The Inside Story of Tex Thornton—The Man Who Built Litton Industries (1969); Robert Sobel, The Rise and Fall of the Conglomerate (1984); and Jeffrey L. Rodengen and Melody Maysonet, The Legend of Litton Industries (2000), focus more on Thornton than on Ash.
Kirk H. Beetz