Bitter Brew: The Rise and Fall of Anheuser-Busch and America's Kings of Beer Part 7

7

THE OLD MAN AND THE KID

In his late sixties, suffering from a number of age-related ailments, including a painful spinal disc problem that required him to wear a corset and sometimes walk with the aid of two canes, Gussie Busch had no intention of retiring any time soon, or maybe ever. Why would he?

His company had doubled its market share in the decade since he pushed it back into first place, and now it was pulling away from Schlitz and Pabst on the way to becoming the dominant brewery in America. Budweiser was practically selling itself.

His baseball team, too, was going gangbusters. Playing their first full season in the new Busch Memorial Stadium, and with newly acquired home run king Roger Maris in the lineup, the Cardinals set an attendance record of 2.09 million in the course of winning the National League pennant in 1967. They then went on to beat the Boston Red Sox in the World Series behind the pitching of Bob Gibson, who threw three complete games while striking out twenty-six batters and allowing only fourteen hits, and the base-running of Lou Brock, who stole a Series-record seven bases.

Gussie and Trudy and a large contingent of family members and friends descended on Boston in a flotilla of corporate and private aircraft for the final two games. Gussie was miffed when Boston owner Tom Yawkey failed to host a party in their honor (as he had done for Yawkey in St. Louis), so he threw his own extended party at the staid Ritz-Carlton Hotel. After watching the Cardinals lose 84 in the sixth game, he hosted Ma.s.sachusetts governor John Volpe and his wife at a banquet that ended in a traditional Busch-family food fight, during which Gussie's oldest daughter, Lilly, hurled a dinner roll at her father that went wide and hit Mrs. Volpe instead. Watching people diving under the table to dodge flung food, one shocked waiter blurted out, "I'm wondering, Mr. Busch, what you do when you win."

He found out after the Cardinals' 72 victory in the seventh game, in which Series MVP Gibson struck out ten and hit a home run and Brock stole two bases in a single inning. Back at the hotel, Gussie and Trudy celebrated by taking fire extinguishers off the wall in the hallway and blasting other members of their group as they got off the elevators. (The hotel sent Gussie a bill for $50,000 for damages and cleanup, which was paid out of the advertising budget.) The Busch entourage then partied on the planes all the way back to St. Louis, where Gussie was hailed by the local press as the architect of the greatest Cardinal team in history.

The Cardinals won the pennant again in 1968, thanks in large part to the spectacular performance of Bob Gibson, who logged a (still) record 1.12 ERA, threw twenty-eight complete games, and struck out 268 batters. In one stretch, he won fifteen games in a row, ten of them shutouts. During June and July, he pitched ninety-six and two-thirds innings and allowed only two earned runs. He topped himself in the opening game of the World Series against the Detroit Tigers.

With a shutout going, Gibson struck out the first batter up in the ninth inning. Catcher Tim McCarver stood up, stepped across the plate, and with the ball in his hand, pointed to the scoreboard.

Known for his rapid-fire rhythm, an irritated Gibson hollered at McCarver, "Throw the f.u.c.king ball back, will you? C'mon, c'mon, let's go!"

But McCarver kept pointing, and the sold-out Busch Stadium crowd stood and cheered as the scoreboard reported that the Cardinals' right-hander had just struck out his fifteenth batter, tying the all-time record set by Sandy Koufax. It made for one of the most joyous moments ever in Gussie's Red Bird Roost. Gibson tipped his cap to the stands and quickly went back to work, striking out the next two batters to end the game.

The future Hall-of-Famer followed up with a complete-game one-hitter in the fourth game to put the Cardinals ahead 31 in the series. Leading in the seventh inning of game five-just two innings away from a second straight world t.i.tle-the Cardinals collapsed and lost. That put a tired Gibson back on the mound for the seventh game. He pitched a shutout through six innings, but with two outs at the top of the seventh, he finally proved human, loading the bases on a walk and two hits. Then, as Gussie and Cardinals fans everywhere watched in disbelief, the Tigers' Jim Northrup drove a Gibson fastball into deep center field, where multiple Gold Glove winner Curt Flood made a rare error and the ball sailed over his head for a three-run triple. Gibson completed the game, but the Cardinals lost 41.

It was a bitter defeat, but it did nothing to diminish St. Louis's enthusiasm for the team and its colorful president. St. Louis sportswriters ballyhooed the birth of a new sports dynasty and celebrated Gussie as a bona fide baseball genius. Not coincidentally, Anheuser-Busch bunged 18.5 million barrels in 1968, another industry record.

The hoopla surrounding the Cardinals' ascendance distracted Gussie from the day-to-day operations of the brewery, as did his increasing involvement in civic and charitable endeavors. Still, his every move seemed tailored toward promoting the Busch brand. As general chairman of St. Louis University's 150th-anniversary fundraising effort, for example, he personally raised two-thirds of the $3.25 million needed to build a new student union in the middle of the campus, for which he was duly celebrated as the guest of honor at the 1967 dedication ceremony for the Busch Memorial Center. As much as he loved basking in the accolades that day, he would argue that his act of philanthropy was another example of "very good business" because it built goodwill among the fastest growing group of beer drinkers-baby-boomer college students. Wasn't that the American business system operating at its best-private industry, motivated by self-interest, acting in the public interest?

That was his view of it anyway, and few ever worked the system better than Gussie Busch, who could justify his most self-indulgent excesses as legitimate corporate expenditures. He once defended his favorite toy, the million-dollar yacht A & Eagle, to a newspaper reporter, saying, "You look at this here and say, 'Isn't that an extravagance?' Sure, it is. But in business benefits, it is tremendous. Just a week ago, we landed an important new yeast customer, one we probably couldn't have gotten without that cruise." Indeed, Gussie regularly used the A & Eagle and the smaller (fifty-one-foot) Rybovich sports fishing boat Miss Budweiser to entertain customers and cronies on lavishly provisioned "booze-and-broads" cruises to the Florida Keys, the Bahamas, and Cozumel, Mexico. When your corporate motto is "Making friends is our business," it forgives a lot of sins.

In a way, it was the perks and extracurricular opportunities his work provided that kept Gussie on the job long past normal retirement age. Though he was invariably described as the "owner" of the Cardinals, the team belonged to the company. So did the private rail car and the chauffeur-driven automobiles. The charitable donations he was applauded for making came from Anheuser-Busch accounts, not his. The brewery paid for the parties and the boats and the beach houses and the broads and most of the cost of Grant's Farm, including the Clydesdales and c.o.c.ky the c.o.c.katoo. If he retired, then he might have to pay for his grand lifestyle out of his own pocket, and he was not about to do that.

He did, however, begin scaling back his work schedule as he approached seventy, adopting bankers' hours at the Pestalozzi Street offices, usually arriving between 10:30 and 11:00 in the morning and leaving by 2:30 or 3:00 in the afternoon, on the days that he came in at all. Which was just fine with August III, who was increasingly at odds with his father about how the company should be run. They could not have been more different in their approach. Gussie responded to opportunity, usually decisively, but with no grand plan or strategy beyond maintaining first place among American brewers and avoiding anything that would dishonor the legacy of his father and grandfather. August, on the other hand, was an inveterate, even compulsive planner who carefully thought out his every action in advance. As one longtime family friend put it, "I've never once seen him do anything spontaneous."

August wanted to reorganize and modernize the company, which he thought was mired in the past, as evidenced by the fact that the executive offices were still in the hundred-year-old former schoolhouse around which the brewery had been built. The children of Adolphus and August A. had attended the school there. Gussie's office was in his old cla.s.sroom.

It wasn't that August disdained tradition. He venerated his grandfather and great-grandfather, even kept their letters to one another in his desk drawer, often pulling them out and reading them for inspiration and guidance. He respected his father's accomplishments, too, but he worried that Gussie was no longer up to the task of leading the company, which had become hidebound by the old man's insistence that everything go through him. If August gave an order as general manager of the brewery while his father was out of town, Gussie was likely to loudly countermand it or quietly undermine it when he returned. There had to be a better, more professional way to manage the company, August was convinced.

Around the brewery and out in the field, August was referred to as "the Third," or "Three Sticks" or "young August," but on the third floor of the administration building, where Gussie held sway with his longtime right-hand man Richard Meyer, he was called "the kid," and it was not a term of affection. "They were all Gussie's boys up there," said Denny Long. "August and d.i.c.k [Meyer] would get into knockdown, drag-out disagreements, and the old man would always take d.i.c.k's side." As A-B's executive vice president, Meyer was officially the No. 2 ranked corporate officer, and it galled him that August didn't acknowledge that. But deference and humility were not in August's toolbox, and he made it clear to the rest of his father's executive team that he believed he was fully capable of running the company and intended to do it at his earliest opportunity. They thought he was cold, arrogant, and abrasive.

August sought to counterbalance Gussie's boys by hiring a cadre of young executives who were the ant.i.thesis of Gussie. He recruited them at some of the best business colleges in the country-Harvard, Stanford, Columbia University, and the Wharton School at the University of Pennsylvania-flying into town to interview recent or soon-to-be graduates of the MBA programs.

The Wharton School proved particularly fertile ground. It was there that August heard a speech by Robert S. Weinberg, a PhD in economics who was the director of a.n.a.lytical services at IBM. Weinberg's speech was on corporate planning, and it apparently knocked August out.

"He came to visit me in New York and took me out to lunch at the most expensive restaurant in town," Weinberg recalled later. "He said, 'I want to offer you a job,' and I told him I wasn't interested. He said, 'I'm disappointed; I want you to think about it.'"

Weinberg thought about it for several weeks and decided he didn't want to work for a beer company in St. Louis. So he sent August a letter asking for a salary so high he was sure it would be turned down. Six months later, out of the blue, August called and said, "You have a deal." He made Weinberg A-B's vice president of corporate planning.

At Wharton, August also met a professor named Russell Ackoff, who ran the school's Management and Behavioral Science Inst.i.tute. "Management science was an area of study that was catching fire," Weinberg said. "Ackoff was a brilliant guy and a superb salesman, and he saw in August a willingness to take chances and look at complicated problems differently."

August saw in Ackoff a father figure with an intellect and education he envied. Theirs quickly became a mentor-protege relationship. August was particularly taken with Ackoff's concept of "preactive" corporate management. Unlike inactive management, which ignored change in favor of tradition, and reactive management, which responded quickly to change when it occurred, Ackoff's preactive management sought through research and a.n.a.lysis to predict change and prepare for it. That's exactly what August wanted at Anheuser-Busch. But because Ackoff didn't want to leave academia for the beer business, August agreed instead to endow his inst.i.tute, paying the university $200,000 to $300,000 a year for Ackoff's students to conduct computer-modeling studies of the company's advertising, marketing, and distribution practices. "The various a.n.a.lyses had to be done in order for us to know if we were looking at something new or were just playing the same old game with new names," Weinberg explained.

Gussie and d.i.c.k Meyer rolled their eyes at the thought of computer-a.s.sisted planning, but they decided to give August his head as long as his little project didn't become too expensive or disruptive.

"Gussie had no interest in what we were doing," said Weinberg. "I think I kind of bamboozled him in the beginning. And, yes, I think there was an element of indulgence in his att.i.tude."

Gussie might have been more concerned if he'd heard Weinberg's presentation, "The Philosophy of Planning," at the Super Market Inst.i.tute in Chicago six months after he joined Anheuser-Busch: "Traditionally, getting smart is an evolutionary process. You have to wait for one level of management to die and a new level of management to come in. But now there is a means for changing quickly."

One of the planning department's first major projects was an a.n.a.lysis of A-B's production capacity versus the demand for its product. The result was a model that called for the construction of new plants strategically located to minimize freight costs. Gussie had been the first American brewer to build a plant outside his company's home city. But after boldly launching operations in Newark, Los Angeles, and Tampa in the 1950s, he'd grown cautious. A new plant was now a $100 million proposition. He worried about moving too fast, committing too many resources. The previous plants had been financed largely out of revenue. He didn't want to incur a big debt to the banks; his father and grandfather always tried to avoid that. But with both d.i.c.k Meyer and the board uncharacteristically supporting the planning department's model, he reluctantly agreed to build three new plants-in Houston; Columbus, Ohio; and Jacksonville, Florida. Of course, once he'd signed on to the plan, you would have thought it was his idea in the first place. At the groundbreaking ceremony for the Columbus plant, he hopped on a plow pulled by a team of eight Clydesdales and actually broke the first ground himself.

August pressed for even more expansion. In May 1969, during a state-of-the-company presentation to a gathering of financial a.n.a.lysts at Chase Park Plaza, he predicted that Anheuser-Busch would sell 21 million barrels that year, but the company suffered from an "efficiency problem due to its production capacity"-it still could not produce enough beer to meet demand. His proposed solution was to build more plants, beginning with one in Merrimack, New Hampshire, and another in Williamsburg, Virginia. Again, Gussie went along.

Two weeks later, on May 27, all seven operating Anheuser-Busch plants were shut down by a Teamsters strike. It began as a local action in Houston, where peaceful picketing had been going on for four weeks while management negotiated with the union over a number of issues, including the length of a new contract. A-B was seeking a three-year agreement similar to the one the Teamsters had signed with the Schlitz plant in Longview, Texas, but the union would agree to only one year. August had been acting as A-B's point man in the negotiations, with the approval of his father and d.i.c.k Meyer. As a former member of the Teamster-affiliated Brewers and Maltsters Local No. 6 in St. Louis, he believed his father gave up too much to the unions over the years in exchange for labor peace. So he was determined to take a tougher stand this time, and maybe show everyone there was a new sheriff in town. Unbeknownst to him, however, Gussie was playing good cop behind his back, indicating to Local 6 leaders that he thought his son was being needlessly hard-nosed. "Gussie just wanted everyone to love him," said Denny Long. "Everything August was asking for was correct. It was what we needed to grow, and Gussie knew that and backed it."

The Houston strike went national when the company-in the person of August-sought to have nonunion supervisors cross the picket line to make yeast brews prior to a settlement, arguing that it was necessary because yeast cultures had to be made several weeks in advance if the plant was to go into full production immediately after a settlement. The union responded by pulling its personnel from refrigeration and power departments, putting thousands of barrels of already produced beer at risk of spoilage. Then, in a calculated show of strength, the union dispatched pickets overnight to every Anheuser-Busch plant. More than 1,500 ma.s.sed at the Pestalozzi Street facility, where Robert Lewis, the volatile business manager of Local 6, tore into August, saying he "lacked basic human understanding." In a statement to reporters, Lewis accused August of inst.i.tuting a policy of worker hara.s.sment and abuse at the Houston and Jacksonville plants that had forced the labor action: "Foremen have been standing over [workers] like overseers, requiring them to obtain permission to even go to the bathroom," he said, adding that several workers were even denied treatment in the dispensary after they suffered burns from caustic fluid used in cleaning. "There has been a complete change of policy and att.i.tude on the part of the company, and unless young Busch's activities are curbed there will be nothing left of this great company. He is directly responsible for the conditions that led to this strike."

Lewis even claimed that August had caused three of A-B's top managers to quit-the labor relations managers at the Houston and Newark plants, and the company's vice president of marketing, Harold Vogel. (Vogel later confirmed that he had resigned rather than report to August because, he said, "He instills fear and thinks it is respect.")

As the number of pickets grew to 2,000, preventing members of the plant's twenty-one other craft unions from entering the complex, the company enlisted the aid of the police department, which dispatched fifty patrol cars and officers armed with riot guns and nightsticks to protect the plant and the nonunion supervisors inside. August and some of his planning team used the dark-paneled boardroom on the third floor as a kind of control center. From there, they could peer through the blinds and monitor the movement of various union leaders as they walked back and forth in front of the Brew House. Listening to all the vitriol directed at August, they half expected to hear someone in the crowd holler, "Send out young Busch and we'll let the rest of you go."

With nearly 5,000 employees shut out in St. Louis, and more than 30,000 workers idled nationwide, Gussie and d.i.c.k Meyer quickly moved to settle the strike on terms that August considered far too lenient. Furious, he reportedly stomped into Gussie's office and handed him a letter of resignation. Gussie looked at it and said, "I'll give you another chance because you are a Busch, but if you ever do anything like this again, I'll see that the Post-Dispatch has your resignation letter within five minutes." Robert Lewis later boasted to reporters that Gussie told August, in his presence, "You are going to get along with Bob Lewis or you'll never become CEO of this company." On the third floor, Gussie's boys got a kick out of seeing "the kid" get a comeuppance.

August came away from the episode feeling he'd been sandbagged by his father, and more convinced than ever that Gussie's leadership, or lack thereof, was jeopardizing the company's future. He was troubled that his father didn't think it a big deal when cigarette manufacturer Philip Morris announced in June 1969 that it had purchased 53 percent of Miller Brewing Company. Miller had never been a threat. The eighth-ranked brewery, it had a 4 percent market share compared to A-B's 16 percent. But Philip Morris was a $1.14 billion company, bigger than A-B, with a record of building strong brands through sustained TV advertising. Marlboro was its Budweiser. August and Bob Weinberg thought Anheuser-Busch needed to develop a plan for dealing with Miller in the future. Gussie remained fixated on Schlitz, his archenemy of the past.

August had another family problem to deal in 1969: his marriage to Susie was on the rocks. Both of them would say later that the offending party was his work and the frequent absences it caused. For Susie, the transition from a bustling social life in Beverly Hills to the comparatively isolated rural setting of Waldmeister had been "overwhelming," leaving her feeling lonely and without friends when he was on the road. August eventually purchased an in-town home for them in Ladue, but he continued traveling extensively and liked to spend weekends at Waldmeister whenever he could. "I realized in about the fifth year that it just was not going to work," Susie told a local gossip columnist years later. "We tried for another year, but it just didn't get any better."

According to a former A-B executive who socialized with the couple, August's absences were not just physical but emotional as well. "She was the All-American girl who would brighten the mood in the room, and then he would knock it down. He treated her as if she were one of his possessions, as he treated us all."

The first public sign of trouble may have been an incident that occurred on May 9, 1968. According to newspaper reports, Susie was driving home around 11:30 p.m. after dropping off "a friend" with whom she'd spent the evening. On a straight stretch of Ladue Road just a few blocks from the Busch residence, she lost control of her car, ran off the road, took out a couple of small trees, and ended up in a ditch. She was treated at the hospital for facial cuts and bruises and then released, with no ticket issued or charges filed.

Not long after, a rumor began making the rounds in Anheuser-Busch social circles that Susie was having an affair with Harry Caray. It was a jaw-dropping, juicy tidbit that practically demanded retelling. Aside from the age difference (she was twenty-nine, and he was fifty-one) and the fact that both were married, Caray was the longtime voice of the Cardinals and one of her father-in-law's best buddies. That he and Susie would be an item seemed weirdly incestuous. The pair could not have been less discreet when they were seen dining together at St. Louis's only four-star restaurant, Tony's, just a few blocks from Busch Stadium, visibly under the influence and so physically affectionate that owner Vince Bommarito had to instruct his whispering waitstaff to stop staring at them. But it was hard not to. The sight of the florid, cartoon-faced sportscaster cavorting with the stunning young wife of August Busch III was not something a working-cla.s.s St. Louisan ever expected to see, or would likely forget.

(To this day, Susie denies the affair ever happened. "We were a friendship item, but not a romance item by any means," she told the Post-Dispatch in her only interview on the subject. Caray, too, denied the affair rumors over the years, though less consistently than Susie, hinting on one occasion that it might have happened and admitting on another that he was flattered that people thought he was capable of attracting her.)

August moved out of the Ladue house and took an apartment on Lindell Boulevard across the street from the St. Louis Cathedral, but he said nothing to his colleagues about his marital situation. If he felt bad, he didn't show it, not even to Denny Long, who was pressed into service as his near nightly dinner companion in the Tenderloin Room at the Chase during the first few months of the separation. When the divorce came later that year, it was quick, clean, and quiet, with the newspapers devoting only a few terse lines to the fact that the couple had agreed to joint custody and no alimony (although Susie later revealed that August supported her "in the style to which I was accustomed"). August thus managed to spare his children, August IV and Susan, the embarra.s.sment he had endured over his parents' prolonged and messy split.

Gussie was glad the episode had not developed into a public scandal, but he still had to decide what to do about Harry. They were not only good friends, with a shared affection for booze, broads, and gin rummy, but also business partners, bound together by Caray's contract with the ball club and the brewery. Gussie could hardly condemn Harry on moral grounds-he'd been there and done that many times himself. And Caray was immensely popular among Cardinals fans and had become nationally recognized for his signature on-air catchphrases-"Hol-eeee cow!" and "It might be, it could be, it is-a home run!" In the public's mind, Caray was as much a part of the Cardinals/Budweiser family as Gussie, if not more. He'd been the Redbirds' most vocal booster for twenty-five years, since before Gussie bought the team. There had been a huge outpouring of public support for Caray when, a few weeks after the '68 World Series, he was struck by a car and nearly killed while crossing the street late one night, suffering two broken legs, a broken shoulder, and damaged lungs. Gussie responded by flying him aboard a company plane to the Anheuser-Busch beach compound in St. Petersburg, where he received round-the-clock nursing care during several months of recuperation and rehabilitation.

There was no question that Gussie loved Harry, and however mad he may have been at him for messing around in his family, he needed Caray in the Cardinals' broadcast booth in the spring of 1969. The winds of change were rustling through the well-manicured world of professional baseball, signaling the arrival of the 1960s nearly a decade behind schedule. Players were sprouting mustaches and sideburns; clumps of hair were starting to poke out from under their caps. Moreover, a new militancy was on the rise in the form of the Major League Baseball Players a.s.sociation and its director, Marvin Miller. Deadlocked in negotiations with team owners over pension benefits, Miller had organized the first ever players' boycott of spring training in January. Confronted with the failure of four hundred players to report to camp, the league capitulated and ponied up more pension money, and spring training finally got under way three weeks late.

All of which was sticking in Gussie's craw on March 24, five days before his seventieth birthday, when he and d.i.c.k Meyer, the Cardinals' executive vice president, presided over an unprecedented meeting at the team's spring training facility in St. Petersburg. The players were surprised to find reporters present when they walked into the clubhouse at Al Lang Field, invited by Al Fleishman.

"I don't mean to give you a lecture," Gussie said, "but as president of this club I have a right to speak to you as men, frankly and straight from the shoulder." He then delivered what sounded a lot like a lecture. Pointedly mentioning that the team's $607,000 payroll was "the biggest in the entire history of baseball," he took the players to task for being greedy, rude, spoiled, and ungrateful. "I don't mind negotiations-that's how we get together-but ultimatums rub me the wrong way and I think they rub the fans the wrong way.... I am not suggesting that you should not have individual business managers or even press agents. That is your privilege ... but too many fans are saying our players think of money more than the game itself. We are told too many players are refusing to sign autographs, pushing kids aside when they try to take pictures.... When the media people lose interest and when kids don't want your autographs, then we better begin to worry."

He didn't lose his temper and bang the table and shout, but in his rambling discourse he made quite a few intemperate remarks, including one that seemed to minimize their role in the organization: "It takes hundreds of people working every day to make it possible for 18 men to play a game of baseball that lasts for about two hours."

"This is no pep talk," he said in closing. "I haven't bawled you out. But I've tried to point out that baseball is at a serious point in its history."