California Has the Most Fortune 500 Firms
For the first time, California edged out New York as home to more of the nation’s 500 biggest industrial companies than any other state, Fortune magazine reported.
California is home to 48 companies in the 1993 edition of the magazine’s annual ranking of the top 500 corporations, with previous leader New York falling to third with 43.
Among the California-based companies joining the Fortune 500 are: Solectron, based in Milpitas; Synoptics Communications, Santa Clara; Cisco Systems, Menlo Park; and 3Com, Santa Clara.
The biggest California-based company on the list is Chevron of San Francisco, which fell to 11th from 8th the previous year. It was followed by Hewlett-Packard of Palo Alto, which rose to 19th from 24th.
The biggest Southern California-based company was Atlantic Richfield of Los Angeles, unchanged at No. 22. It was followed by Lockheed of Calabasas, up to 35th from 45th, and Rockwell of Seal Beach, down to 45th from 43rd.
Also, after losing money in 1992, the Fortune 500 as a group earned $62.6 billion in 1993 while slashing thousands of jobs, Fortune said.
The profit figure would be enough to wipe out the 1993 U.S. trade deficit with Japan.
Fortune attributed the improvement largely to “American industry’s steady, relentless drive to raise productivity, improve quality and boost competitiveness.”
Also helping were a decline in long-term interest rates that lowered the cost of borrowing, a broad pickup in the U.S. economy and the expensive Japanese yen, which made U.S.-built products ranging from cars to computers more affordable than comparable Japanese goods.
The improvement didn’t benefit the U.S. job picture, however. Total employment among the 500 fell for the ninth straight year, to 11.5 million from 11.8 million. The trend confirms a pattern of dwindling employment opportunities as businesses get more efficient with fewer workers.
Fortune said the earnings improvement was especially significant because it was achieved despite stagnant growth in sales. In 1992, by comparison, the 500 lost $196.2 million, the first time the roster as a whole has ever lost money.
Much of the 1992 loss was due to a required accounting adjustment that changed the way companies report retiree health benefits, and that same adjustment also detracted from earnings in 1993.
When the effects of the accounting adjustment aren’t included for both years, the Fortune 500 earned $81.7 billion in 1993--15% more than the comparably adjusted $71 billion in 1992.
The rankings of the 500, based on annual sales, contained no significant surprises this year. But they did illustrate the rising strength of American auto making and a shrinkage of the American petroleum industry, which has been affected by lower oil prices.
General Motors Corp. easily retained its position as the biggest company. But Ford Motor Co. bumped Exxon Corp. for the No. 2 spot, and Chrysler Corp. leaped from No. 11 to No. 8, bumping Chevron, DuPont Co. and Texaco Inc.
Extensive cost-cutting kept the petroleum industry profitable: Exxon earned $5.3 billion, more than any other company.