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The AUTODIN Legacy Project

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  Western Union Chronology of Major Events
1851 to 1995
Includes "The road to corporate oblivion" Submitted by: Bruce L. Suttle,  Ed.
1979 to 1995
 
 


Western Union Chronology of Early Historical Events
1851 to 1974
(The Road to Corporate Oblivion)

1851 The New York and Mississippi Valley Printing Telegraph Company, Western Union's predecessor, is formed by a group of businessmen in Rochester, New York.
1856: The New York and Mississippi Valley Printing Telegraph Company changes its name to The Western Union Telegraph Company following the acquisition of several competing telegraph systems.
1861: Western Union completes the first transcontinental telegraph line.
1866: Introduced stock tickers.  New York Stock Exchange quotations.
1870: Launched W.U.® time service, helped standardized time nationally.
1871: Introduced Western Union Money Transfer service nationally.
1923: Introduced teletypewriters, joining branches and individual companies.
1935: Introduced first inter-city facsimile service
1943: Pioneered the first commercial inter-city microwave system.
1945: Western Union merged with the Postal Telegraph Company.
1958: Introduced Telex, a direct-dial consumer to consumer teleprinter service.
1960: Became a primary participant in the AUTODIN ASC system.
1964: Inaugurated transcontinental microwave radio beam system. 1970: Introduced Western Union® Mailgram® messages.
1974: Launched Westar I, America's first domestic communications satellite.


The Road to Corporate Oblivion
1979 to 1995
by: Warren R. Bechtel

1979 R. W. McFall retires on May 1 after 14 years as Western Union CEO.  R. M. Flanagan named new CEO.
Westar III launched.
National Sharedata Corporation sold.
American Satellite Corporation purchased 20% of Westar.
Major write-down of Western Union Data Services Company (DSC) assets.
1980 Western Union long distance telephone service introduced.
Western Union lobbies Congress for repeal of Section 222 of Communications Act to permit its entry into international telex market.
Television and radio broadcasters expand use of Westar system.
1981 Transfer of TWX (renamed Telex II) from AT&T facilities to Western Union Digital Exchange System completed.
Further write-down of assets of DSC, which is folded into newly formed Field Service Division.
Western Union acquires 50% of Airfone.
Sale of real estate assets, including Upper Saddle River, New Jersey headquarters building.
AT&T proposes sharp increase in rates for lease facilities.
Western Union Telex networks peak at 141,000 subscribers after 23 years of growth.
Sales of individual transponders to Westar customers begins.
Curtiss-Wright begins to purchase shares of Western Union common stock.
New federal law enacted at year end amending the Communications Act, permitting Western Union to enter international telex market.
1982
Westar IV and Westar V launched.
AUTODIN II system canceled by Department of Defense.
Western Union sells PR Newswire Association, Inc.
Western Union Easylink electronic mail service introduced on a limited basis.
Company begins major push into cellular mobile telephone equipment.
Western Union acquires E F Johnson Company, manufacturer of cellular telephone equipment.
Curtiss-Wright increases its purchase of Western Union shares.
Net income reported for 1982 is the last annual profit reported by Western Union Corporation
1983 Western Union and Merrill Lynch form New York Teleport joint venture.
Western Union sells its remaining interest in Spacecom.
Easylink expands as service provider on new Western Union packet switching network.
Western Union Mailgram contract canceled by the U.S. Postal Service.
Western Union international Telex service expands.
Corporate debt increases.
Local distribution (fiber optic) business pushed by Western Union.
Work force reduction implemented.
Sharp increase in local telephone access line charges, previously deferred, again proposed in anticipation of Bell System break up.
Western Union shifts from regulatory accounting to standard accounting, increasing depreciation charges.
Standstill agreement reached with Curtiss-Wright in November placing three Curtiss-Wright directors on Western Union board.
Fourth quarter special charge of $125 million results in net loss for 1983.
1984 Westar VI, launched from space shuttle Challenger, fails to achieve operational orbit.
Western Union Board of Directors approved 1984 expenditure of $115 million to support rapid acceleration of Easylink growth.
New bank credit lines established.
Workforce reduction is implemented.
Flanagan ousted by Board of Directors on August 28 and replaced by Western Union CEO by T. R. Berner, Chairman of Curtis-Wright.
Banks cut off Western Union line of credit, producing sudden liquidity crisis.
Dividends omitted on Western Union common and preferred shares.
Salaries and wages temporarily reduced by 10% for both management and union employees.
R. S. Leventhal replaces Berner as CEO on December 21.
As year ends, bankruptcy looms.
1985 Deal worked out with banks to provide limited interim financing to avoid bankruptcy filing.
Aggressive program of Western Union asset sales begins, resulting in 1985 sale of E. F. Johnson, Telestat Systems, Western Union interest in Teleport and some cellular telephone interests to raise cash.
Work force reduced by 22 percent.
Prolonged strike by unionized employees disrupts operation.
Exorbitant access line charges put into effect by “Baby Bell” telephone companies during 1985 produce an increase in Western Union leased facilities costs of more than $100 million annually and prompt many telex subscribers to cancel service.
Western Union records fourth quarter charge of $300 million for write-down in value of switching and transmission equipment.
1986 Curtiss-Wright sells all of its Western Union stock.  All Curtiss-Wright Directors resign from board.
Government Systems Division sold to American Satellite Corporation for $155 million cash.
Western Union interest in Airfone sold to GTE for $59 million cash.
First comprehensive financial restructuring plan attempted with advice from Drexel Burnham Lambert.  Plan fails to get required approvals from stockholders and debt-holders.
Pacific Asset Holdings proposes to acquire Western Union in new restructuring plan.
Western Union takes fourth-quarter charge of $468 million, mainly for write-down of Telex, private wire and satellite assets.
1987 Remaining Western Union cellular communications assets sold.
Pacific Assets replaced in May as potential Western Union acquirer by Bennett S. LeBow.
Eight month effort begins to secure stockholder and debt-holder approval of LeBow restructuring plan, which includes: buyout of banks at a substantial discount; issuance of new preferred stock for surrender of outstanding debentures, notes, and old preferred shares by public holders of old Western Union securities; acquisition of ITT Worldcom to be merged into Western Union; merger of Western Union Corporation and the Western Union Telegraph Company into a single entity to eliminate preferred dividend arrearage; and issuance of junk bonds through Drexel to raise $500 million in new money to pay off banks and provide working capital.
After several postponed deadlines, the LeBow plan secures all necessary approvals and is implemented on December 30th.
With bankruptcy filing prepared and ready for submission to court, bankruptcy is averted at the eleventh hour.
1988 Lebow management team takes over on January 12th.  R.J. Amman replaces Leventhal as Western Union CEO.  Most of previous officer group removed during first quarter.
Westar system sold to Hughes Aircraft Company
New workforce reduction began, totaling 25% by year end.
Worldcom private line business sold to Tele-Columbus AG of Switzerland for $56 million cash.
After three quarterly payments, dividends on new preferred shares issued to old shareholders and debt-holders in 12/30/87 financial restructuring are omitted.
Western Union records charges totaling more than $1 billion for 1988, representing write-down of switching and transmission equipment and other non-recurring charges.  Company has huge negative net worth.
Pension benefit accrual stopped 6/30/88 for management and 12/31/88 for union employees.  Pension entitlements frozen as of those dates.
Western Union Telex subscriber base, which had been in serious decline for three years, is now in meltdown.
1989 Western Union voice and private wire businesses sold to Telecom USA.
Moorestown, NJ Central telephone bureau, in service since 1971, is closed.
Western Union acquires National Payments Network, a bill paying service.
Interest rate on $500 million of outstanding Western Union junk bonds, sold as part of 12/30/87 restructuring, is reset from 16½% to 19½%, raising annual interest expense for this debt issue to $96 million.
New financial restructuring plan to issue new notes in exchange for 19¼% notes is proposed, but later withdrawn.
1990 Western Union Financial Services, Inc. (FSI) is established as a separate entity, a wholly owned subsidiary of Western Union Corporation.  Henceforth, FSI will be the provider of Western Union Money Transfer Service.
Western Union sells its Advanced Transmission System unit (local cable distribution business) to MCI.
New restructuring/recapitalization plan is proposed in the form of an exchange offer to alleviate debit service burden.
Company fails to make $51 million interest payment on junk bonds due in June, creating a default.
Western Union reaches agreement in July to sell its Business Services (Telex and Easylink) unit to AT&T for $180 million cash.
Union lock out.
Exchange offer withdrawn after seven months of unsuccessful effort
Western Union proposes tender offer to buy up junk bonds at 50¢ for each dollar face amount.
Tender offer and sale of Business Services to AT&T are completed simultaneously on December 31st., with cash received from AT&T, used to retire $338 million of Western Union junk bonds.
Default is cured and bankruptcy is forestalled, but Western Union warns that remaining debt burden will require further restructuring in 1991.
1991 Out-of-default status lasts until April, when interest payment due on old debentures is missed.
Shareholders approve change in name of parent company from Western Union Corporation to New Valley Corporation  Western Union identity is vested in FSI, operating as an independent subsidiary, whose business is strong.
Company begins discussions with Pension Benefit Guaranty Corporation (PBGC) concerning PBGC takeover of underfunded Western Union Pension Plan.
FSI forms international division to pursue worldwide money transfer business, which is growing rapidly.
In November, creditors file petition with U.S. Bankruptcy Court in Newark NJ seeking to force New Valley Corporation into Chapter 11.  New Valley challenges this petition and the court agrees to an indefinite stay in the proceedings.   Bankruptcy is now a matter of time.
1992 Involuntary Chapter 11 action pending in Bankruptcy Court is stayed for all of 1992.
New Valley reaches agreement with PBGC for takeover of Western Union pension plan.  Based on that agreement, in May, New Valley proposes a prepackaged bankruptcy reorganization plan contemplating a quick in-and-out of Chapter11.  Other major creditors don't sign on, however, and at year end prospects for prepackaged plan are dimming.
FSI's consumer money transfer business shows substantial growth during the year, with international component especially strong.
1993 On March 31, faced with a ruling by the Bankruptcy Court that the 16 month stay of the creditor's petition for an involuntary Chapter 11 order would not be extended any further, and unable to secure agreement among its creditors on its prepackaged plan, New Valley Corporation, at its own request, is placed under the protection of Chapter 11 of the U.S. Bankruptcy Code as a debtor-in-possession by the court.  Western Union Financial Services Inc. (FSI) is not included in the bankruptcy filing.
Trading in New Valley common and preferred shares is immediately halted by the New York Stock Exchange, which then proceeds to de-list the company's stock.
Security-holders jockey for claimant position as a complex and contentious bankruptcy reorganization process begins.  New Valley is given four months to present a proposed reorganization plan to the Court, and this period is later extended to eight months.
On November 24, new Valley files it's plan of reorganization with the Bankruptcy Court.  The plan provides for cash payment of most of the creditors claims, issuance of new debt securities, retention of the pension plan within the company, and new equity infusions by Apollo Advisers, L.P. and Electronic Data Systems, Inc. (EDS).  Apollo would acquire a controlling interest in the company.  The secured creditors, unsecured creditors, preferred shareholders and the PBGC all oppose New Valley's plan.
FSI, which now accounts for virtually all of New Valley's ongoing business, records accelerated growth in revenue and income for 1993.
1994 In January, the Bankruptcy Court terminates the ten-month period during which New Valley alone had been permitted to propose a Chapter 11 reorganization plan.  As a result, in February, three alternative reorganization plans are filed with the court by debt-holders and shareholders.
In May, First Data Corporation (FDC) offers to acquire Western Union Financial Services, Inc. (FSI) for $480 million in cash plus assumption of the underfunded Western Union pension plan.  New Valley rejects this offer as inadequate.
On June 9, FDC increases the cash portion of its offer to $595 million, and New Valley announces preliminary agreement to take this offer.
On June 15, New Valley rescinds agreement with FDC and announces acceptance of higher offer for FSI from Forstmann, Little & Company, which will pay $650 million in cash plus assumption of the pension plan.
On June 23, FDC increases the cash portion of its offer to $660 million.
On July 7, the Bankruptcy Court rules that FSI is to be sold in a court-supervised auction to be held in September.  The sale of FSI, whose robust business and prospects in the international money transfer market have attracted cash offers well beyond the previously assumed level of it's worth, has become the clearly apparent means of resolving New Valley's bankruptcy and settling creditors' claims.
On August 3, New Valley announces that, in accordance with the new labor contract negotiated with it's employee union, FSI's customer service center located in Reno, Nevada will be closed on December 31, 1994.
On September 2, First Financial Corporation (FFMC), of Atlanta, announces that it will bid $800 million in cash, plus assumption of the pension plan in the forthcoming auction for FSI.
On September 19, the auction sale of FSI is held in the Bankruptcy Court in Newark, New Jersey.  The winner is FFMC, with a bid of $893 million in cash plus assumption of the pension plan liability (valued at $300 million) for a total consideration of $1.193 billion.
In October, an agreement is hammered out among the various parties at interest on a New Valley reorganization plan with all claimants sharing in the cash proceeds to be realized from the sale of FSI.
On November 1, the agreed upon reorganization plan is confirmed (approved) by the Bankruptcy Court, concluding three years of court proceedings.
On November 15, the sale of FSI to FFMC is consummated.
1995 In January, New Valley Corporation emerges from Chapter 11 bankruptcy.  It exists today on paper, as an affiliate of Brooke Group Ltd., which is located in Miami, Florida and is controlled by Bennett S. LeBow.  It serves as a corporate vehicle for Brooke's investments in brokerage services, real estate operations and other areas.
In June, FFMC agrees to merge into (be acquired by) First Data Corporation (FDC).
In October, this merger is completed and the FFMC name disappears.  In a strange turn of events, FDC, which had failed in it's attempts to acquire FSI before and during the auction sale in 1994, now acquires FSI by acquiring it's acquirer.

FSI, which has inherited the valuable "Western Union" brand name, exists today as the largest subsidiary of FDC.  It's worldwide consumer money transfer service has grown to the point where, in 2001, it will record nearly $3 billion in revenue and about $800 million in profit

Copied from
Retired Western Union Employees Association's
Fourth Quarter 2001 Newsletter - #184
with permission.

Revisions made 2/13/2002 from the copy on their web site.

 

I don't remember where I found the data preceding “The Road to Corporate Oblivion” (from 1856 to 1974).  If anyone can tell me where this came from I will be glad to ask for permission to copy and give credit.

For a history of telecommunications in general and Western Union in particular, visit The NMAH Archives Center.

For a history of telegraphy in general, visit A Short History of Telegraphy.

Ever heard of the Schooner "Western Union?"  Visit Schooner Western Union for some interesting history.
Need to synchronize your Western Union self-winding clock?  Then visit CLOCKS and TIME.

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