There was more than talk of a merger: It actually happened. But as with the revolution on Orwell's Animal Farm, it's sort of hard to tell the difference now. Somehow, the acquirer ended up being acquired: A venerable Pittsburgh company tried to expand into a new business, and ended up shrinking its old businesses instead.
When the merger was announced in August 1995, some Pittsburghers might have hoped CBS would relocate here. Westinghouse had its own broadcasting history, having founded KDKA, the world's first commercial radio station, and it owned a handful of other stations to boot. But from the moment Westinghouse then-CEO Michael H. Jordan announced the $5.4 billion deal, it was clear CBS was staying put.
"The corporate headquarters will remain in Pittsburgh" while "CBS will remain based in New York," The New York Times flatly noted.
Some panic was inevitable in Manhattan, where presumably TV folk couldn't imagine living in ... in ... Pittsburgh. "CBS staffers said they are being left in the dark about [whether] Pittsburgh-based Westinghouse will move key company operations like the television studios out of New York," the New York Sun reported.
They needn't have worried. The very same day the Sun was fretting, the Pittsburgh Post-Gazette's Steve Massey was reporting speculation that Westinghouse would move. "At the least, the role for the Pittsburgh headquarters should diminish considerably," he prophesied.
In retrospect, it's ominous that the merger was announced in New York -- home not just to broadcasting but to Wall Street, which had been pressuring Jordan to boost Westinghouse's stock price. TV people got to see the merger's announcement live ... while Pittsburghers had to watch it on TV.
"[T]he announcement was broadcast live to a Gateway Center lobby packed with silent employees," Massey recalled in "Who Killed Westinghouse?," a 1998 newspaper series that is the definitive account of the company's collapse. "Several [employees] said afterward that they wouldn't be surprised if Westinghouse moved to New York in a few years."
Which is exactly what happened. A year after the merger was completed, Jordan announce plans to unmerge it by "spinning off" industrial divisions -- in other words, the Westinghouse parts of Westinghouse. That would allow CBS's balance sheet to reflect the broadcasting business alone. You know, the way it was doing before the merger.
The problem, as Massey recounts, is that in business parlance, Westinghouse's old-line businesses were "mature," with diminished opportunity for growth. In the 1990s, immaturity was the way to go: dot-coms, real estate, entertainment -- the real money was in building castles in the air, and on the airwaves. So Jordan bought more media companies, paying for them by selling off businesses that Westinghouse had once created.
By December 1997, the company decided to get out of the grimy business of building things entirely. Jordan announced plans to sell off its remaining industrial businesses and relocate itself to New York City. By that point, the company's local presence was a shell of its former self, prompting The New York Times to observe, "Westinghouse is leaving with more of a whimper than a bang." (Besides, the paper noted in January 1998, there was lots of other economic activity to cushion the blow -- like "a new 250,000-square-foot Lazarus department store" being built Downtown.)
Was anyone (other than the financiers) better off for all the financial shenanigans? Maybe. Jordan did clean up the balance sheets of some old-line businesses, and CBS got bigger, if not better. In 1995, CBS was the third-ranked network with a second-ranked news broadcast. Today, it's the first-ranked network with third-ranked news.
The Westinghouse name has survived: Its former nuclear-power division, in fact, is currently expanding, in a new headquarters being built in Butler County. The business now belongs to the Japanese -- Toshiba bought it in 2006 from a British firm that purchased it in 1999 -- but so what? Pittsburgh companies like Alcoa have headquarters here but have their facilities somewhere else; this time the executive's loafer is merely on the other foot.
Most Pittsburghers remember CEO Michael Jordan as the guy who pilfered yet another corporate icon -- assuming they remember him at all. But give the guy some credit: At least he never paid Katie Couric $15 million a year.