Everybody Ought to Be Rich: The Life and Times of John J. Raskob, Capitalist
(Oxford University Press, 2013)
(Oxford University Press, 2013)
Icons and Idiots: Straight Talk on Leadership
Detroit is back. Not the city, alas, but the Big Three automakers whose glorious pasts gave Motown its moniker. General Motors, while duly paying off much of its US$50 billion bailout debt, is again leading the world in car sales and, more surprising, winning kudos for quality. Ford remains healthy under sound leadership, and Chrysler’s near-term prospects seem startlingly good. There’s even a mini-boom in new books about auto industry leaders past and present, executives whose daring (and foibles) transcend Motor City. At least three of these books are about men whose character and practices were, and still are, representative of American C-suite leadership.
The Bean Counter
The most significant leadership book published this year, David Farber’s Everybody Ought to Be Rich: The Life and Times of John J. Raskob, Capitalist, is about an executive who was responsible for much of what is right, and wrong, with the U.S. auto industry today (and the leadership of giant businesses, in general). Six decades after his death, Raskob remains one of the most influential—and colorful—characters in the annals of corporate America. He served as chief financial officer of both General Motors Company and DuPont in an era before the title existed. In the early 1920s, Raskob laid the foundations that enabled both companies to rise from relative obscurity (in GM’s case, from near bankruptcy) to become, respectively, the world’s first- and third-largest corporations by the time he retired from their boards in the late 1940s.
John Jakob Raskob (1879–1950) knew next to nothing about making cars (or chemicals) and wasn’t particularly interested in industrial manufacturing, engineering, or organizational management. Instead, his many and lasting contributions to corporate leadership were entirely financial. Raskob was the first executive to practice what came to be called management by the numbers. At DuPont, in the 1910s, he created—with a big assist from protégé Donaldson Brown—most of the accounting and budgeting procedures and metrics that are still standard in American companies.
Raskob’s most significant creations (and for him, the most fun) were the arcane financial instruments that allowed DuPont to acquire its major competitors (and control of General Motors) using other people’s money. He was the Adam of corporate acquisitions and financial restructuring. His creative output included the invention of holding companies and paper instruments that reduced the risk, liability, and taxes of his boss, Pierre S. du Pont, chairman and, for a time, chief executive of both GM and DuPont. Raskob’s financial prestidigitation helped make du Pont a multibillionaire in today’s dollars—and, through stock speculation, insider trading (he shorted GM stock), and prodigious tax avoidance, a billionaire in his own right.
Farber, professor of history at Temple University and author of Sloan Rules: Alfred P. Sloan and the Triumph of General Motors (University of Chicago Press, 2002), documents how the largely self-educated Raskob quickly rose from the ranks of the petite bourgeoisie (his father was a cigar maker). He became the first Roman Catholic accepted as a peer in U.S. boardrooms, the progressive head of the nation’s anti-Prohibitionists, chairman of the Democratic National Committee at the time of Franklin Roosevelt’s first presidential nomination, and, in a spectacular volte-face, a leader of the right-wing American Liberty League, which opposed the New Deal and the United States’ entry into World War II. He was Pope Pius XII’s main fund-raiser in the United States, a lifelong pal of New York’s powerful Cardinal Spellman, a Knight of Malta, and, along with his 12 children, a regular communicant. At the same time, he was a playboy nonpareil (with a weakness for showgirls, booze, and gambling) and a willing abettor of his wife’s cohabitation with a man many years her junior. John Raskob seems also to have helped conceal Pierre du Pont’s evident homosexuality. Few bios of CFOs have such racy subplots.