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VESTAL--Ask James Matthews what it takes to build a $300-million company with seven divisions and 25 subsidiaries, and he will tell you it all stems from a combination of design and luck.

Others might be more inclined to credit shrewd decision-making, scrupulous honesty, and a willingness to put people with talent in positions where they can exercise it.

Whatever the keys, one thing is certain: In 30 years, James F. Matthews turned a decision that amounted to corporate suicide in the mid-1960s into an enormous success. And he did it on a $3,000 personal stake and a $350 line of credit.

Matthews struck off on his own in 1965, leaving a very promising path that he was traveling with Johnson Controls, Inc. Matthews went to work for Johnson soon after he graduated from Clarkson College with an engineering degree. Matthews credits his first two years with Johnson for teaching him many of the things that have paid off in building his company.

"They gave me enough rope to hang myself but enough support to keep me from doing it too often. It was a great learning experience. They let me negotiate my own contracts, and some of them were sizable--in the half-million-dollar range," Matthews recalls.

That kind of responsibility teaches one very important lesson, according to Matthews: "It is one thing to win a project, and quite another to get it done. Once I landed these deals, I had to see them through all the way to completion. And that meant working with suppliers and contractors. You mature in a hurry when you are 25 years old and you have that kind of responsibility."

Perhaps that kind of success and environment also fuels an appetite for new challenges. Matthews left Johnson Controls to work for an area plumbing-and-heating contractor, but that didn't last long. Johnson recruited him back to head up a new office in Binghamton.

Fueled by the rapid expansion of IBM and by numerous state projects, Matthews quickly built a record of success for the Binghamton office, enough of a record of success to attract the attention of top marketing executives with the company. And when you attract their favorable attention, it generally means a jump to the corporate fast track.

Matthews saw it coming. But he wasn't sure the corporate ladder was the course that he wanted to follow.

"One of the gifts that I thought my parents gave to me as that they didn't move me all over the country while I was growing up, so when I thought I might be offered a promotion, I talked it over with my wife (Judy). We decided that it was more important for us to give the kids (we had three at the time) stability," Matthews recalls.

Within two weeks, Matthews got the offer he had been expecting. Knowing that he had his wife's support, Matthews turned down the opportunity to move up at Johnson--a move that he suspected amounted to corporate hara-kiri.

"Turning down a promotion was a no-no in those days. Companies felt that turning down a promotion meant that you were telling the company that you were not going to stay," Matthews says. And Johnson Controls' management wanted to be sure that he understood their perception.

He was called to a meeting in New York City. "They gave me a little talking to, and I knew right then that I had to find something else."

"Something else" turned out to be an electrical contracting company. It was one area of the construction business that he knew little about, but Matthews believed that he knew enough about the construction business and enough about the potential customers to build a decent business because, during his work with Johnson Controls and with the plumbing-and-heating firm, he saw that there was a little less competition in electrical contracting than in other construction businesses.

But Matthews also knew that, battling established companies with solid credit, he would have to find a different formula for success.

"Being new to the business meant that I wasn't stuck with any traditions or traditional ideas about how things had to be done, and I questioned everything that was standard about the industry. That led me to find some break-throughs that helped us find ways to serve our customers better than other people could," Matthews explains.

While everyone in the construction business was, and is, cost-conscious, Matthews looked at costs from a different perspective. "Where most contractors were looking to save money on the actual installation of fixtures and the like, I saw that most of the labor was not in the installation, but in the materials handling and the hangers and fasteners," Matthews recalls.

Matco Electric focused on planning for its jobs--planning how materials would arrive and be distributed at the job site, what kinds of fasteners and hangers to use, and other factors. That planning, Matthews says, meant that his crews could finish their work in less time than other, more experienced crews, so it cut his labor costs.

Matthews' approach also meant less waste. There was less cutting, bending, and fitting at the job site.

Construction, however, is not a gentle business, and established players do not always make newcomers in the business welcome. Other electrical contractors, Matthews says, put pressure on suppliers not to sell to Matco, or used other tactics to make life difficult for the new company. And that led to Matco's first expansion--Wholesale Electrical Supply Co., Inc. of Vestal. With his own electrical supply company, Matthews could ensure his supply of materials and that they would be delivered the way he wanted them to be.

But Matthews kept his focus confined to the Southern Tier until the late 1970s. "I made a decision that I would always stay in the local area because I had five kids, and I wanted to be home to have dinner with them," Matthews explains.

Dedication to family led to Matthews' venture into the auto business. He credits a car-sick son with bringing a Chrysler-Plymouth dealership in Vestal into the Matco Group.

"We had spent the weekend with friends who had a Chrysler station wagon, and I noticed that my son (Doug) didn't get car-sick. I thought it might be because of the torsion-bar suspension on the Chrysler, so I went to buy one when we were in the market for a new car," Matthews recalls.

Instead of getting a sales pitch on a car, Matthews got a sob story from the manager of the dealership--a sob story about the dealership's problems. "I decided to make him a loan, but ended up buying the dealership," Matthews says.

The auto business turned out to be one of Matthews' biggest headaches. The dealership lost money--lots of it--for two-and-a-half years. But it taught Matthews some lessons.

"I was relying on people in the business to teach me the business and tell me what I needed to know. "I finally figured out that I had been getting 'the business,' not learning the business," Matthews recalls.

Ultimately, though, Matthews figured out whom he could trust to give him good information, and whom he could count on to do a good job in the various areas of the dealership. Then he turned to them for ideas and for hiring decisions. And now he can boast that the dealership has not been "in the red" for even one month since mid-1976.

Lessons learned from that experience have helped Matthews and Matco build its record of success ever since. "Find good people, put them in positions where they can act, and rely on them for advice. And you have to be willing to make mistakes. But when you make a mistake, correct it and learn from it," Matthews stresses.

Those lessons came at the right time--just as Matthews was beginning to feel free to expand beyond Binghamton. The first opportunity came in 1979, when IBM asked Matco to bid on the electrical work for a new plant in Charlotte, N.C. Matthews and his executives decided to buy Port City Electric in Charlotte.

Then came another electrical-supply wholesaler in Raleigh.

Matthews credits his employees, now numbering 1,900, with helping him take advantage of business possibilities that come his way. Since the mid-1970s, Matthews and Matco have added electronics businesses, including circuit-board design, fabrication, and assembly; environmental work, recycling television and computer picture tubes; sports and recreation, which owns a marina on Lake Ontario, an ice rink, a golf driving range, and a sports-accessory manufacturer.

Matco also includes a real-estate business and video-production operation.

Matthews, however, admits some scares, the biggest being in the electronics business. Matthews bought Chenango Industries, which had operations in Vestal and Endicott, N.Y.; Hallstead, Pa.; and Myrtle Beach, S.C. "A banker told me that the company might have to leave the area unless someone bought it. I did, but I just let the plants go for a while under their existing management," Matthews recalls.