Arrow-right Camera
The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Service Firms Join Fortune 500 Change Reflects Blurring Of Lines Between Manufacturing, Services

Associated Press

Call it a last nail in the coffin of the Industrial Age.

The Fortune 500 list, a who’s who of the mightiest manufacturers in America for 40 years, is now including in its tony ranks Wal-Mart, McDonald’s, Microsoft and others in the service world.

It was time for a change, according to Fortune magazine, because the lines are blurring between the companies that make products and those that sell, maintain, design or package them.

If appliance maker General Electric Co., for example, derived 40 percent of its revenues last year from writing mortgages and other services, and computer firms make their own software, why not let them weigh in together?

In effect, Fortune’s old method of ranking the country’s top 500 industrial and service companies separately was outdated.

As well, the power of the service sector couldn’t be ignored. In 1993, Fortune’s 500 biggest service companies made $93.7 billion in profits, nearly 50 percent more than their counterparts on the industrial list.

There were even more service companies on the new list than industrials: 291.

Of course, the industrial powerhouses of old aren’t gone. In the 41st annual list, General Motors Corp. again grabs the No. 1 spot, just as it has 31 times before. Ford Motor Co. and Exxon Corp. take second and third places, as they did in the previous year.

But three newcomers appear among the top 10 on the Fortune 500, which ranks companies according to 1994 sales figures. Wal-Mart Stores Inc. takes fourth spot, AT&T Corp. is No. 5 and Sears, Roebuck and Co. is No. 9.

“If you consider the Fortune 500 began as a ranking of bigness, it doesn’t make a lot of sense to have (Wal-Mart) relegated to another list,” says Managing Editor John Huey.

AT&T Corp. applauded the changed list, which was released Tuesday and will be available on newsstands May 1.

“We’re pleased that Fortune’s editors have taken this step,” the company said in a statement. “With the inclusion of service corporations, we think the new list more accurately reflects the reality of corporate America.”