Every April, Fortune Magazine trots out its annual list of the top 500 companies in the U.S. It makes for fun and enlightening reading, because it shows where we spend the most money. It’s not necessarily a sign of our values, so much as a sign of our needs and desires: needs imposed on us by economic realities, and desires manufactured by the advertising industry.
If you were to try to guess which companies made the number one and two slots, you might pick companies from the oil industry, banking or insurance companies, department store chains, agribusinesses, or healthcare conglomerates. Or you might guess it would be high-tech companies–computer manufacturers or software companies–maybe even a telecommunications firm or two. But, of course, you’d be wrong.
This year the list is topped by two automobile manufacturers: General Motors ($178 billion) and Ford Motor ($154 billion). They boosted their incomes by selling expensive, gas-guzzling sport utility vehicles.
Don’t despair! You already guessed who number three would be: Exxon ($122 billion). Those SUVs have to run on something. Other automobile-related companies that made the top 25 are: Chrysler at number seven ($61 billion), Mobil Oil at number eight ($60 billion), Texaco at number 12 ($45 billion), Chevron at 19 ($36 billion), and Amoco at 22 ($33 billion). Obviously, the auto/oil industries are what fuel U.S. corporate growth. Now you know why mass transit it so popular in the business community.
To round out the top 10 corporate criminals–er, corporate billionaires–we find: Wal-Mart stores at number four ($119 billion), General Electric at five ($91 billion), IBM at six ($79 billion), Philip Morris at nine ($56 billion), and AT&T at number ten ($53 billion). Department stores, military contracts, media conglomerates, computers, cigarettes, and telephones–all indispensable products of the modern age. You have to drop down the list to number 45 to find an agribusiness corporation (Conagra) and to number 50 to find a grocery store chain (Safeway). Costco squeezes in at 53, and Sara Lee (nutritious!) squeezes in at 61. Damn. The U.S. economy cannot live on bread alone.
But this list is ranked only by gross revenues–total income before expenses. When we look at the list of companies ranked by gross profit (what they made after expenses), we find many of the same suspects, just in different order, but with a few surprising additions. Here, Exxon is number one, followed by GE, Intel, Ford Motor, General Motors, Philip Morris, IBM, AT&T, Merck, and Coca-Cola, followed by a list of banks and insurance companies. Microsoft, which is ranked at only 137 on the revenue list, is number 15 on this list–an indication of how high the profit margins are on each software package the company sells.
Banks and insurance companies are extraordinarily profitable. The main offenders: State Farm, Chase Manhattan, Citicorp, BankAmerica (owns Seafirst), Allstate, Travelers Group, NationsBank, and Fannie Mae–all within the top 30, at an average of $3.3 billion in profits. And pharmaceutical companies really cleaned up, too: Merck, Johnson & Johnson, Bristol-Myers Squibb, Pfizer, Abbott Laboratories, and American Home Products all made the top 40, with an average profit of $3 billion last year (Merck was at $4.6 billion). But where the pharmaceutical companies really show their stuff is in the measure of highest returns on revenue–i.e., their profits as a percentage of their total revenues. Here the pharmaceutical industry out-sleazes every other industry with an average of 16.1% profit (the median is 4.9%). The main culprits are: Schering-Plough (21.3% profit), Merck (19.5%), Bristol-Myers Squibb (19.2%), Pfizer (17.7%), and Abbott Labs (17.7%). In fact, only three companies beat out Schering-Plough and Merck in this category. The leader was Microsoft, with 30.4% profit on revenues. Fortune, of course, is not the only prestigious business news publication that can compile a list. Here, then, is our very first annual Week Of Eat The State! Non-Organic Daily Lunch Specials for Washington State. Chow down!
Monday: Boeing. Number 11 on the Fortune 500 list, Boeing has the distinction of being the only company in the top 50 that shows a loss of $178 million, instead of an enormous profit. That, of course, is changing as you read this, as Boeing extracts a few billion more from taxpayer pockets! (Revenues $45.8 billion, loss -$178 million.)
Tuesday: Costco. A Taj Mahal built of shrink-wrapped packages of “dolphin-safe” tuna. It’s the place we sneak out of, enormous bags of pasta and bottles of laundry detergent clutched under each arm, hoping nobody from the local co-op sees us there. (Revenues $21.8 billion, profits $312 million.)
Wednesday: Microsoft. Rumor has it Windows 98 will be a big flop, with few new features and lots of bugs. Sound familiar? (Revenues $11.4 billion, profits $3.5 billion.)
Thursday: Weyerhaeuser. Every year they slip further down the list, as a few more trees disappear from our state and national parks. I wish they’d go extinct a little faster! (Revenues $11.2 billion, profits $342 million.)
Friday: Washington Mutual. The so-called “local bank” that continued its fondness for big mergers last year by gobbling up Great Western Financial (for $6.8 billion) to create the largest thrift in the U.S. Then it merged with H.F. Ahmanson, another thrift worth $9 billion. The headquarters are still here in Seattle, though. (Revenues $7.5 billion, profits $482 million.)
Saturday: Paccar. The truck company. Ever wonder where all those potholes came from? (Revenues $6.7 billion, profits $345 million.)
Sunday: Nordstrom. They couldn’t have done it without our tax money! (Revenues $4.8 billion, profits $186 million.)