On this day in economic and business history …
Two of the Dow Jones Industrial Average‘s components had eventful days on June 1 throughout their histories. Each company actually experienced two major notable events on different years. Let’s take a closer look at what happened for these two components, but first let’s examine another landmark event that took place today.
The 24-hour news cycle was born on June 1, 1980, when CNN made its debut on the channel lineups of 1.7 million American cable subscribers. This low market penetration meant that Ted Turner’s news network initially operated at a loss, but within three years, following the takeover of the rival Satellite News Channel, CNN reached more than 33 million viewers, or 20% of all American viewing households.
CNN achieved prominence in 1986 when it was the only network to offer live television coverage of the space shuttle Challenger, which exploded shortly after takeoff. The Persian Gulf War of 1991 was CNN’s coming-out party, as it was the only outlet offering live communications from inside Iraq during the initial bombing strikes. Five years later, CNN (along with the other Turner broadcasting networks) merged with Time Warner Inc (NYSE:TWX), which dramatically expanded its reach, both domestically and internationally. Today, CNN reaches more than 100 million households and nearly a million hotel rooms in the United States, and is also available in an international format in virtually all of the world’s sovereign countries.
The trust that couldn’t be busted
Alcoa Inc (NYSE:AA) quickly became a leader in the aluminum industry after its founding in the late 1800s, in no small part because of its role in inventing the industry with a revolutionary new extraction process that made commercial aluminum production possible for the first time. So dominant was its market position that the U.S. Justice Department filed an antitrust suit against the company on June 1, 1938. Alcoa Inc (NYSE:AA) was by far the largest player in the aluminum market at the time, with an estimated 90% share of all American virgin aluminum production.
The case dragged on until 1945, when a landmark decision reframing the very definition of “monopoly” allowed Alcoa Inc (NYSE:AA) to skate past the trust-busters wholly intact. You can read more about the decision and its aftermath when you click on this link.
Alcoa Inc (NYSE:AA)’s successful evasion of antitrust crusaders proved important to its later status as a Dow component. The aluminum company won a spot on the index exactly 21 years after its case was first filed, on June 1, 1959. Not only is Alcoa Inc (NYSE:AA) the only one of the four new additions made that day to survive as a current component — Anaconda Copper is gone, Swift & Company is now a subsidiary of Brazilian food processor JBS, and Owens-Illinois Inc (NYSE:OI) was removed in 1985 on the same day of the year that Alcoa Inc (NYSE:AA) won its court case — it’s also the only metals company remaining on the Dow today.
I’m lovin’ it, internationally
The first international McDonald’s Corporation (NYSE:MCD) franchise opened in Canada, in the British Columbia town of Richmond, on June 1, 1967. McDonald’s had gone public only two years prior, and it was already growing quickly in the United States — by the end of the ’60s, there would be more than 1,000 Golden Arches across the United States. At that point, three years after the first Canadian outpost opened its doors, there were 50 McDonald’s Corporation (NYSE:MCD) franchises north of the border.
McDonald’s Corporation (NYSE:MCD) Canada, as the division is now known, grew rapidly throughout the ’70s, largely thanks to George Cohon, who became the Eastern Canada franchisee in 1968 and combined his operations with the Western Canada franchisees to create the present operating subsidiary in 1971. By 1977 there were 250 Canadian McDonald’s Corporation (NYSE:MCD) franchises.
Two years later, at the start of June in 1979, McDonald’s Corporation (NYSE:MCD) introduced one of its most Iconic products to a national audience: the Happy Meal. Robert Bernstein, an advertiser working for McDonald’s Corporation (NYSE:MCD) Midwestern operations, had devised the Happy Meal two years earlier. It was inspired by cereal boxes, which have for decades appealed to kids through toy inserts and games or other amusements printed on back panels.
After a successful Kansas City test run in the fall of 1977, McDonald’s put the new product on menus nationwide. The first Happy Meal had a circus-like wagon train theme and came with a choice of stencil, puzzle, wrist wallet, ID bracelet, spinning top, or McDonald’s-themed character erasers. Several months later, the first branded Happy Meal rolled out nationwide to promote Star Trek: The Motion Picture, which seems like an odd choice of film to promote to children who had largely not been born when the original Star Trek series was canceled a decade earlier.
Today, McDonald’s derives great benefit from its two June-related milestones. McDonald’s joined the Dow six years after launching the Happy Meal across all franchises, and it has been one of the index’s best performers ever since. McDonald’s Canada now serves 2.5 million Canadians every day at more than 1,400 restaurants across the country. The subsidiary claims that its operations generate more than 200,000 jobs and $4.5 billion in Canadian economic activity when indirect impacts are taken into account. The Happy Meal, which cost only $1 when introduced in 1979, now accounts for more than $3 billion of McDonald’s annual sales, and more than 1.5 billion toys are given away in Happy Meal boxes every year.
The article 4 Key Events That Brought 2 Companies Into the Dow originally appeared on Fool.com.
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter, @TMFBiggles, for more insight into markets, history, and technology.The Motley Fool recommends and owns shares of McDonald’s.
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