Maxwell, Hamish—Philip Morris
King of the LBO (leveraged buyout). Liked to play hardball. Didn’t always win at hardball. Spearheaded the buyout of Kraft foods. But Philip Morris, now Altria, has divested itself of the food business. Maxwell’s efforts to inflate Philip Morris to be a massive conglomerate of consumer goods were not to be.
McCormick, Brooks—International Harvester
Beginning, founding, timeline:
Mccormicks intermarried with the Deerings, the other half of the merger that would create International harvester. Brooks Mccormick, the final CEO of IH, was the great-grandson of the founder of Deering Harvesting.
Brooks Mccormick inherits struggling business. John Deere and Caterpillar value begins soaring. He picks fight with UAW contract as motion to turn around profitability—mandatory overtime. As tensions with union grow, McCormick steps down and cedes family’s involvement in company for first time since its creation. “In this world there’s no room for emotionalism or sentimentality.” Makes you think—perhaps the business changed to the point where it was unrecognizable to the McCormick family, symbolic of the cultural shift in business to the McCardell type.
Archie McCardell takes over, and instead of “traditional” spending measures he presses for concessions from labor—fires 11k of 15k mid level managers whom he feels are too close to the union—and takes personal control of the entire operation. He tanks it. Underestimates his workers and tries to boss them around. Gets canned.
This is the aftermath of what happens to Americans, towns when a guy like McCardell goes rogue with a struggling, iconic business:
Another article detailing what happened to a central Ohio town—the organization man betrayed, his identity pulled from under him with the loos of his job, “suicide hotlines."
McGillicuddy, John F.—Manufacturers Hanover Trust
With his merger of Manufacturers and Chemical Bank, McGillicuddy jumpstarted the wave of bank consolidation that define the 90s. Consolidation meant big bucks for executives.
Manufacturers and Chemical were “reeling” from the lending excesses of the 80s, a philosophy pioneered by Walter Wriston.
What spurred the change in corporate philosophy?
As digital revolution began, customers looked to larger banks who were financially able to offer innovative digital technologies
Does this consolidation imply future slashing of the lower level banking job market
McGillicuddy: "The mistake that the bankers of yesterday made, that this bank made and I made, was that we were so concerned about taking care of the customer that we never demanded adequate compensation for the service. And renting your balance sheet is a service."
Evidence of the elimination of the customer from consideration, ushering in the era of the bonuses (hey, we’re doing all this wonderful stuff, and they’re not. We should be rewarded)
“It is a message constantly repeated by US corporate treasurers. Companies are keen to reward their loan arrangers and bank lenders. They now realize how vital access to bank credit is. It is becoming standard practice with corporate treasuries to allocate service business – cash management, foreign exchange – among lending banks. Lenders have the right to pitch in any area where they are genuinely capable. And, all other things being equal, a lending bank will have preference over an outside commercial or investment bank.”
Evidence of Wriston’s philosophy in action, and the growing practice of aggressive lending:
Meriwether, John—Long Term Capital Mgmt.
Munoz, Oscar—United Airlines
Musk, Elon—Solar City
This is an ongoing list; names will be filled in due time.
VPA was created by corporate vice presidents in New York for their amusement. Also for their survival. After 30 years, it now is open to people with similar experience. Participation is free. Participation is anonymous.