Henry J. Kaiser: Builder in the Modern American West.
By Mark S. Foster. Austin: University of Texas Press, 1989. Illustrations. Bibliography. Index. 358 pages. $29.95.
Reviewed by Felice A. Bonadio, Associate Professor of History, University of California, Santa Barbara.
The sins of American business leaders in the 1980s are seemingly endless: mediocre management, shoddy products, poor services, leveraged buyouts, junk bond shenanigans, preoccupation with the bottom line, inability to compete with the Japanese, and others. We can, without too much exaggeration, apply to big business and its leaders in general the same indictment that Ken Auletta brought to the fall of the House of Lehman. What happened at Lehman, Auletta wrote, “is a tale of political intrigue unrivaled in Washington, of incompetence unmatched in the civil service, a sordid tale of vanity, avarice, cowardice, lust for power, and a polluted Lehman culture.”
In this, the first full account of the life of California industrialist Henry Kaiser, Foster tells us there was a time when American businessmen enjoyed a far more respectable public reputation. Kaiser came into national prominence in the early 1940s, a big, bald, immensely energetic, sixty-year old “can do” builder of roads, bridges, and dams whose greatest business successes lay ahead of him. The nation’s war-production effort was extremely critical in those days. The number of cargo ships needed to supply arms and material to troops fighting the Nazi menace abroad was dangerously limited. Washington wanted a new brand of executive to solve the problem, not some cautious, none too imaginative industrialist of old, but a take-charge wheeler dealer who was eager to bring efficiency and rapid production into the moribund shipbuilding industry, and who had the capacity to deliver.
Kaiser (who had never built a ship before) turned out to be that man. As Foster writes, “Production figures present only part of the story, but they were spectacular. Between 1941 and 1945 his yards yielded 1,490 vessels…More than any other activity, shipbuilding made Henry Kaiser a national hero.” It also encouraged him to move into many new industries, to lock himself inevitably in bitter combat against some of the most powerful business leaders in the country. Kaiser liked to think of himself as a maverick, forever challenging what he perceived as the self-satisfaction and lethargy of an older, more comfortably established class of industrialists.
Washington then as now had its share of contractors seeking lucrative government contracts, but none had more success in selling his ideas to federal officials than Kaiser. His temperament for gladhanding was there from the beginning, but Kaiser’s Washington experience during the war heightened it. He was in fact the best promoter of his own ventures, a shrewd, rough-edged, public relations minded businessman of enormous charm and vitality, who learned very quickly whose egos to stroke and how to maneuver his way around bureaucratic hurdles. From the 1940s on, influential political figures in both parties were among Kaiser’s most enthusiastic supporters. Consequently, Kaiser’s relations with government officials generated less strain than those of many of his competitors.
Kaiser was a visionary, not a details man. Although he was an active participant in major corporate decisions, he despised desk work and committee reports. His was a “hands on” management style. His passion was not for flow charts or the conventional etiquette of corporate authority, but for “ad hoc” decisions, reached with a small circle of key executives during informal and vigorous free flowing strategy sessions. He had no use for yes men or executives unwilling to provide others with a continuous stream of information about developments within their operating divisions. He surrounded himself with talented people and expected them to become willing and eager partners in his awesome appetite for work and grandiose ambitions. Most did, and at a high cost to their marriages and family life. Members of Kaiser’s top echelon of executives looked upon themselves as corporate supermen, capable of outdistancing any of their boss’s competitors.
Even as he reached the peak of his success in the 1940s, Kaiser moved quickly to expand the scope of his industrial operations: automobiles, steel making, aluminum, housing, nuclear power plants. In some of these ventures, Kaiser made good progress; in others, such as the production of automobiles, he failed disastrously. He never tired of looking for new opportunities. Toward the end of his life, he moved from Oakland to Hawaii, built hotels and a new city, and entered radio and television in Oahu. He brought to his career an extraordinary combination of skills; he was a dynamic and imaginative businessman who watched the future with the sharpest of eyes, anticipating trends and innovations in the country’s postwar economy of unparalleled prosperity. He believed — as perhaps only a westerner could believe — that government should take any action in making capitalism more responsive to the new preeminence of a technological and industrial society.
In the 1930s, most businessmen regarded organized labor with suspicion; Kaiser was no exception. But as New Deal reform filtered through his organization, he adopted a more compassionate and enlightened attitude toward the resentments of blue collar workers. He paid his employees better than average wages, furnished them with the latest in safe and modern equipment, and set up a prepaid health clinic for them. Ironically, as Foster points out, perhaps Kaiser’s most lasting legacy was not in roads, dams, or aluminum, but in medical services through his Kaiser Permanente Medical Care Program, which by the time of his death in 1967 had become one of the largest and most successful health plan systems in the nation.
The theme of this biography is summed up in the book’s subtitle. Kaiser was a builder of dreams as well as ships and dams, who envisioned a nation of material abundance and comfort. But perhaps his greatest influence may have been as an ideologue of far western development, in bringing to California and the Pacific Coast generally a confidence in itself as an emerging powerhouse of industrial development, less dependent on the aged financial infrastructure of the East. He was for forty years the single most powerful industrial figure in California, and Foster rightly reminds us that “Kaiser’s overall contributions place him among the first rank of American business leaders.”
In his concluding chapter, Foster suggests that Kaiser was the last of the late nineteenth century’s highly individualistic entrepreneurs who dominated their industries by the sheer force of their personalities. He was an obsessively ambitious man. But while Kaiser’s ambitions were considerable, so too was the outcome of his efforts in making the quality of life, as he was fond of saying, “a little better for the little guy.” Not least of all, Kaiser never wandered far from his own ethical standards and sense of responsibility to his sprawling empire. One does not have to invest an older generation of America’s business elite with an unnecessary amount of virtue to recognize in today’s business leaders an inordinate greed for money, lack of institutional loyalty, and indifference to the interests of consumers and stockholders.
One of the book’s major strengths is in the author’s extensive use of primary and secondary sources, including Kaiser’s personal papers as well as those of his prominent executives, government documents, oral history interviews, newspapers, and unpublished dissertations. Foster also sought out Kaiser’s friends, family members, close associates and, when possible, interviewed them. The result is a richly documented book, nicely indexed, made even more authoritative by the splendid manner in which Foster has manipulated his material into a lean, well-organized, fascinating, and thoroughly readable piece of personal and business history. Along with specialists in the field, it will appeal to a wider audience.
Although one might quibble with Foster’s decision to place Kaiser in the national pantheon of corporate leaders like Rockefeller, Ford, and Carnegie, it is nonetheless true that Kaiser was indeed an empire builder of considerable importance. It is unlikely that any future biographer will produce a better book.