Building for
Greater Profit
By 1958
the world-wide post-war sellers' market had
abated. During these easy, prosperous years,
Sinclair profits had reached a record $90.4
million in 1956. But motor gasoline prices then
began a long decline. The lower prices caught
Sinclair in a bind, cutting sales income by $45
million in 1958. Increased costs in every
department were aggravated by additional cash
outlays for raw materials. Its historic low
ratio of raw material production to refinery
needs made Sinclair acutely sensitive to lower
production
 allowables,
to import restrictions on crude oil and to price
erosions.Sinclair moved
promptly to offset the potential crisis. A new
group of professionally educated executives,
skilled in the technology of the day, were
charged with the responsibility of solving the
burgeoning problems. Thus began a new emphasis
toward building for greater profit.
The accent
was no longer on physical growth, which had been
achieved. The goal of the new executives was
effective integration of the billion dollar
family of companies to eliminate permanently the
vexing imbalances which had plagued Sinclair's
past, in an attempt to stabilize profit growth
in the future. On September 30, 1957, their
program was outlined to the principal
executives. It was a 1-2-3 punch to knock out
past problems and create a future champion. In
essence, it was simple:
- Increase
profit by reducing costs;
- Realize
greater profits from existing facilities;
- Create new
sources of income.
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