THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, April 26, 1995 TAG: 9504260445
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: NEW YORK LENGTH: Medium: 86 lines
Call it a last nail in the coffin of the Industrial Age. The Fortune 500 list, a who's who of the mightiest manufacturers in America for 40 years, is now including in its tony ranks Wal-Mart, McDonald's, Microsoft and others in the service world.
Fortune magazine said its old method of ranking the country's top 500 industrial and service companies separately was outdated. It was time for a change, according to the magazine, because the lines are blurring between the companies that make products and those that sell, maintain, design or package them.
The power of the service sector could not be ignored. In 1993, Fortune's 500 biggest service companies made $93.7 billion in profits, nearly 50 percent more than their counterparts on the industrial list. As a result, there were even more service companies on the new list than industrials: 291.
Of course, the industrial powerhouses of old are not gone. In the 41st annual list, General Motors Corp. again grabs the No. 1 spot, as it has 31 times before. Ford Motor Co. and Exxon Corp. take second and third places, as they did in the previous year.
But three newcomers appear among the top 10 on the Fortune 500, which ranks companies according to 1994 sales figures. Wal-Mart Stores Inc. takes fourth spot, AT&T Corp. is No. 5 and Sears, Roebuck and Co. is No. 9.
``If you consider the Fortune 500 began as a ranking of bigness, it doesn't make a lot of sense to have (Wal-Mart) relegated to another list,'' said managing editor John Huey. ``They are clearly a major player that's here to stay.''
Fortune attributes the blurring of lines between manufacturers and service companies to two trends.
The computer revolution allows companies to cheaply hire others to do work they once did before. Nike Inc., for example, designs, markets and distributes shoes but does not actually make any, said Fortune.
In addition, deregulation has allowed more companies to be compared by their sales figures. Previously, Fortune compared those companies by assets, since the profits of regulated companies are closely controlled by governments.
The Fortune 500 list was created decades ago as an in-house tool to help editors track which companies they should write about. In 1955, the magazine began publishing it.
Later, Fortune concocted its Service 500 list, which ranked companies by industry. That list, however, did not carry the cachet of the original Fortune 500 list.
Today, the club is even more exclusive. While the last-ranked company from last year's Fortune 500 list had $614 million in revenues, this year it took $2.2 billion in revenues to make the grade.
Reflecting a growth year, total revenues of the 500 this year are equal to 63 percent of the U.S. gross domestic product, the magazine says. Profits during 1994 rose 54 percent for the group on a sales gain of 8.2 percent.
The five companies that showed the biggest increases in revenues - Viacom, Cardinal Health, Travelers Inc., Keycorp and Panhandle Eastern - were not even included in last year's Fortune 500.
Of course, not everyone is celebrating. Insurance companies had a less-than-fortunate year, partly as a result of troubles stemming from the California earthquake.
Some well-known companies were bumped from the list, although they are included in an expanded roster of 1,000 companies grouped by industry and also ranked by sales.
Among those toppled from the top tier are B.F. Goodrich Co., which fell from 239 to 501.
New York state, however, regained some stature. After losing to California last year in the competition for having the most company headquarters, New York wrested the No. 1 spot again with 65. California placed second with 51. ILLUSTRATION: Graphics
JANET SHAUGHNESSY/Staff
NATION'S BIGGEST COMPANIES
VIRGINIA BUSINESSES ON THE LIST
HAMPTON ROADS LOSES GROUND
[For complete graphic, please see microfilm]
by CNB