Founded as a regulated gas pipeline company during the 1940s, Tenneco diversified after World War II to minimize federal regulation. This eventually included J.I. Case, a farm and construction equipment manufacturer whose president James Ketelsen became Tenneco’s CEO in 1978.
Case faced disastrous sales declines in the late 1970s and 1980s due to recession and the embargo on grain sales to the Soviet Union. Rather than selling Case, Ketelsen poured billions into the company, notably buying International Harvester in 1984 in an ill-conceived attempt to compete with John Deere.
This diverted resources and leadership talent at a time when Tenneco faced the difficulties of deregulation, which had resulted in a very uncertain business climate for Tenneco’s gas pipelines. The efforts to save Case ultimately failed, leaving Tenneco heavily in debt, and forcing the sale of Tenneco’s lucrative oil company in 1988. After further losses, Case was finally sold in 1994, followed shortly thereafter with the dismemberment of Tenneco.