The Big Grow Much Bigger

The very largest companies are taking over a steadily growing share of U.S. business. FORTUNE'S annual listing of the top 500, published last week, shows that the biggest industrial companies rang up almost 64% of all industrial sales in the U.S. last year, up from 62% in 1967 and just over 55% a decade ago. In their fields the 500 employed 687 out of every 1,000 workers and accounted for 74% of total profits. Despite the tax surcharge, profits were up 13%, to $24 billion.

General Motors again led the list, followed in the top ten by Standard Oil (N.J.), Ford, General Electric, Chrysler, IBM, Mobil Oil, Texaco, Gulf Oil and U.S. Steel. Collectively, the top ten increased earnings by 21%, or double the rate of the other 490 companies.

The fastest overall growth in the 500 was posted by the conglomerates. Largely through mergers, one of them, California's Commonwealth United, increased sales by an astonishing 2,178%, to $153 million. Membership in the exclusive billion-dollar sales club increased by 21, to a total of 104.

Sales climbed in all 22 industries covered by the 500. Apparel beat out office machines for first place with a 20.5% increase; the slowest mover was the shipbuilding and railroad-equipment group, up 6.3%. In spite of attacks on its pricing structure, the drug industry for the fifth" year in a row was the most profitable, with a 17.9% return on invested capital.

The trend of the 500 underscores the growing importance of "economies of scale." Size clearly offers the opportunity for more efficient use of equipment and greater market clout.

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