Chairman of the Board: A Biography of Carl A. Gerstacker [NOOK Book]

Overview


Carl A. Gerstacker was born in 1916 in Cleveland, Ohio. At an early age his father, Rollin, instilled in him an interest in finance and the stock market. In 1930, when Carl turned fourteen, Rollin advised his son to withdraw his paper-route and odd-job money from a local bank and invest it all in The Dow Chemical Company. It was the beginning of a relationship that would last a lifetime. After high school, Carl landed an hourly position with Dow Chemical as a lab assistant and, at the same time, pursued an ...

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Chairman of the Board: A Biography of Carl A. Gerstacker

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Overview


Carl A. Gerstacker was born in 1916 in Cleveland, Ohio. At an early age his father, Rollin, instilled in him an interest in finance and the stock market. In 1930, when Carl turned fourteen, Rollin advised his son to withdraw his paper-route and odd-job money from a local bank and invest it all in The Dow Chemical Company. It was the beginning of a relationship that would last a lifetime. After high school, Carl landed an hourly position with Dow Chemical as a lab assistant and, at the same time, pursued an engineering degree at the University of Michigan as part of the company’s student training course. After graduating in 1938, Gerstacker continued to work for Dow Chemical until the outbreak of World War II when he joined the U.S. Army. Returning to civilian life in 1946, he was rehired by Dow and quickly moved up the corporate ladder, becoming Treasurer in 1949, Vice-President in 1955, and Chairman of the Board in 1960, a position he retained until 1976. He retired five years later in 1981. 

     Carl Gerstacker was a business leader who believed that every company had a special personality and that the Dow personality was largely shaped by its employees. “For Dow Chemical, people are the most important asset, not the patents, the plants, nor the products.” Gerstacker’s personal financial acumen was rivaled only by his own contributions to the sound corporate growth of Dow Chemical, a business he loved and to which he devoted his life. Gerstacker died in 1995, leaving a legacy that lives on in the form of numerous philanthropic endeavors he began during his lifetime and on whose boards he once served. Carl A. Gerstacker was one of the towering figures of twentieth-century American industry.


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Product Details

  • ISBN-13: 9780870138966
  • Publisher: Michigan State University Press
  • Sold by: Barnes & Noble
  • Format: eBook
  • Sales rank: 1,049,765
  • File size: 2 MB

Meet the Author

E. N. Brandt has been the company historian of Dow Chemical since 1983. A journalism graduate of Michigan State University, he served as a U.S. Army officer in World War II, as a United Press correspondent, and as a U.S. State Department employee in Europe before joining Dow’s public relations department in 1953.

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Read an Excerpt

CHAIRMAN OF THE BOARD A Biography of Carl A. Gerstacker
By E. N. Brandt Michigan State University Press Copyright © 2003 Michigan State University Press
All right reserved.

ISBN: 978-0-87013-683-2


Chapter One Rollie and Eda, 1916-34

1916 Born Carl Allan Gerstacker on 6 August in Cleveland, Ohio, second child and first son of Rollin Michael Gerstacker and Eda Uhinck Gerstacker. Rollin ("Rollie") is a mechanical engineering graduate of Case Institute of Technology in Cleveland and spends his entire career in the engineering firm of Bartlett & Snow there. Eda is one of identical twins, Eda and Elsa, born to a local farming family. Rollie and Eda meet as classmates at West High School, Cleveland.

1921 Begins kindergarten at Landon Elementary School, Cleveland. Rather sickly as a child, misses one semester entirely. He and sister Elsa, four and one-half years older, begin spending summers in Midland, Michigan, with their uncle and aunt, James T. Pardee and Elsa Uhinck Pardee. (Pardee, a classmate, close friend, and early financial backer of Herbert H. Dow, founder of the Dow Chemical Company, will become board chairman of Dow Chemical in 1935).

1930 Enters West High School, Cleveland. Delivers newspapers for spending money. When he is thirteen, he and his father study stock market and he begins investing his earnings from paper route. Plays tennis, golf, ping pong, softball, and other sports. Editor of school paper, The West Higher.

1934 Graduates from high school in January as class salutatorian and as such gives first public address, entitled "Two Wars and Two Debts."

Carl's story begins with Rollie and Eda. They first met as classmates at West High School in Cleveland. Rollie was one of the brightest lads in the class, the son of Michael Gerstacker, the druggist who owned Gerstacker's Drugstore over on Fulton Street, on Cleveland's west side. Rollie worked there after school. Eda was something of a celebrity around the school, one of a set of identical twins, Eda and Elsa, the daughters of a farming couple, the Uhincks. They dressed identically most of the time, and resembled each other so closely that no one could tell them apart except their mother, and sometimes even she was not sure. They came to West High after completing grade school in a one-room schoolhouse in the farming area of south Cleveland.

Cleveland's south side was populated mostly by Germans in those days, and most of the Germans were farmers. The Gerstacker family came to the United States from Bavaria, from a village called Kirchensittenbach, not far from Nuremberg. Their farming background was betrayed by the very name-Gerstacker, in German, means "barley field." Rollie's grandfather, the first of the family to arrive, got a job working on a railroad-building crew when he came to the United States, and was especially remembered for his thriftiness, which was inherited by Rollie. Rollie's father Michael worked as a stevedore in Cleveland for awhile, and then borrowed money to go to Philadelphia to study pharmacy.

Michael spent his entire working career in the Fulton Street drugstore that he bought upon returning to Cleveland; late in his career, however, he went out of business when a chain drugstore bought land neighboring his store and he chose not to compete with it.

The Uhinck girls decided very early on that they did not want to follow old-country tradition and marry one of the German farm boys in their neighborhood and raise lots of children, as their family more or less expected them to do. They had higher ambitions, and decided they would go to college and become schoolteachers-which both of them did.

Rollie also decided to go on to college, and enrolled in mechanical engineering at Case Institute of Technology, in downtown Cleveland, in due time graduating with a degree in engineering.

He worked at several jobs around Cleveland, and finally settled in at the Bartlett & Snow engineering and construction firm, where he spent his career. Bartlett & Snow specialized in ore-handling machinery for the boats that plied the Great Lakes. In addition to making and installing this kind of machinery, the firm also built sewage disposal plants. Eventually Rollie was in charge of a group of engineers for the firm.

It would be romantic to say that Eda and Rollie were high school sweethearts in the good old American tradition, but they were just good friends who enjoyed each other's company and always got along well. Both seem to have been waiting for someone else, who never came along. When they had a little more experience in life, and were twenty-five years old, they decided to marry.

It turned out to be a very solid marriage. Their first child, whom Eda named Elsa for her twin sister, arrived in February of 1912. Eda then gave up her teaching job and became a full-time housewife. Carl was born in August 1916, which completed the family. As he looked back on his family situation years later, Carl said that "the more people I meet the more I realize that our family (1) has more money than the great majority, (2) is happier than most, and (3) is like the majority of people, who are really good solid Americans."

When he was five he entered the kindergarten class at Landon Elementary School, whose principal had been Eda Gerstacker's teacher in that one-room school in south Cleveland. "That was awful," Carl said, "because the principal knew me from day one. My older sister had excelled at languages and I had a cousin who excelled in math and science. Every time I got to a class the teacher would say, 'Are you that long German name? Are you related to so and so?'"

One of his earliest memories was of a neighbor lady "who got annoyed with me and threatened to cut my head off with a butcher knife when I was probably about three. I was so frightened that I had an accident in my pants on the way home. When I explained what had happened to my mother, she was furious, but she would not say anything bad about the lady! She finally said, 'The lady was a fine swimmer.' She always tried to concentrate on something good. She believed that you should never say anything ill about anybody."

He also remembered his mother saying to him, "Carl, you're as good as anyone in the world, but you're not better than anyone else." "I used to think she had slipped up somewhere in that," he said, "it didn't make complete sense to me. I gradually began to understand that she meant that you could be anything in the world you wanted to be if you were willing to try hard enough and that you should never look down on anyone else or feel that you were better than anyone else. It is a great principle."

She also taught him not to get into a fight unless he expected to win it. "She thought parents should not fight the battles of their kids," he said. "I remember vividly being beaten up by another kid in a neighborhood fight. I used to get into lots of fights. I remember out of the corner of my eye seeing that she was watching out of the window, but she never did anything to break up the fight. That was my problem, in her opinion. If I got beaten up, I would just do better the next time, which was a good feeling to have."

The fact that he was an only son was a major factor, he thought. "I often think mothers are never completely satisfied with their own fathers or with their husbands," he said. "If they have a male child, mothers are determined to program that child to have the best qualities of their own father and the best qualities of their husband, without the qualities of which they are not so fond. They work very hard at doing that. They are never completely successful, but since they have tried so hard, they tend to have a great love for an only male child. My present wife has the same feeling about her only male child."

They lived on West 102nd Street, not too far from the lake (Lake Erie), just south of Clifton Boulevard, and only half a block away from the Pardees, who lived in a big house on Clifton. From his earliest days he knew them as "Unkie"-Uncle Jim-and Aunty, his mother's twin sister. The Pardees also had a "summer place" up in Midland, Michigan-it was a comfortable old farmhouse on Main Street, just up the street from Uncle Jim's old friend Herbert Dow-and as the years went on the Pardees spent more and more of their time there.

From the time he was five, little Carl and his sister Elsa spent most of their summers up in Midland with Unkie and Aunty. It was like having a second set of parents, he said. Some of his earliest financial training came from those days with Unkie and Aunty, too. Uncle Jim "loved to educate me in various ways," he said.

For example, he paid me to pick up the fallen apples from the apple trees in his yard. For a cherry basket full I got one penny. I began to negotiate with him. When the apples were big, it didn't take much to fill a cherry basket, but when they were tiny little apples I had to work awfully hard. I remember really bargaining with him and his laughing, I'm sure, on the side, and finally giving in to me. We had a lot of negotiations on things like that, which I later found were very educational. The two of them, my father and Mr. Pardee, were a great influence on me that way.

Pardee loved to have the children get up early and have breakfast with him before he went off to work, but the children, being "on vacation," preferred to sleep in. So Uncle Jim would put a dime under their breakfast plates, and if they got up in time they got the dime. If they were not up by the time he left he pocketed the dimes and went on down to the office.

The Pardees saw a great deal of the Dows socially during these times, and Carl grew up knowing the Dow family on a first-name basis. He did not get to know Herbert Dow himself very well, but he did have one memorable session playing checkers with the man. "At the time I thought I was a very good checkers player," Carl said.

H. H. Dow was a very good checkers player. He used to play with the hourly people in the plant. I remember clearly one Sunday afternoon visiting the Dow home on Main Street. I must have mentioned checkers, being a brash young kid, so he offered to play with me. I remember it vividly because he beat me once rather badly and then he beat me again. I remember thinking I was just a little kid and this grown man would throw me a game somewhere along the way. But no way, he just clobbered me, game after game! I never thought I was a good checkers player after that.

When he reached high school age, he went to West High School as his parents had; it was the principal college preparatory choice in Cleveland. When he looked back on his high school days his most vivid memories were of the toughest teachers at West High:

... the ones who gave me a lot of homework and tough grades. Those are the ones everyone remembers. I remember the first day of the World Series when a few of us wanted to listen to it on the radio. We went to our home room teacher and said we wanted to be excused to go because we wanted to listen to the baseball game. She thought that was absolutely ridiculous and said "No." So we went to the assistant principal. He thought it was humorous that we would try that hard, so he said, "Yes." That was a great lesson to me that you should never take the first "no." Often if you keep trying, you will find someone who will agree to do what you want, even if the first answer was "no."

He was quite sickly as a child, seeming to have more sniffles and sneezes and flu bugs than any of his school friends, but his mother was a model of patience and did not mind at all serving as his nurse. The usual childhood diseases hit him very hard and kept him out of school for varying periods of time. Once he was absent the greater part of a semester and had to stay behind his class, much to his chagrin. "My mother was a member of a women's study club, the Clytean Club," he recalled many years later, "and when I had to stay home from school my mother used me as a captive audience, as I lay on my sick bed, to practice the talks she had to give at her club. I had to learn all about Lake Titicaca, and how to pronounce long words like Ixtacihuatl and Popocatepetl. I learned more as a captive audience for my mother's Clytean Club papers, that has actually helped me in my business life, than I learned in most of my courses as a chemical engineer at the University of Michigan."

In Latin class, which he did not like, he developed a habit of writing out the translations in the book.

We were allowed to look things up in the back of the book, and as the teacher walked around the class I would always be looking things up in the back of the book so she couldn't see that I had cheated by writing the translations in the front. But she wasn't born yesterday! One day while she was walking around she stopped at my place, and she stayed and stayed. I fumbled at the back and I fumbled and fumbled and fumbled, and finally she began to laugh because she knew what I had done. She had seen kids before! She said, "The only way you can get out of this is to be Cicero in the Latin play, and if you do that I will forget the cheating." I ended up being Cicero in a Latin play and probably learned more Latin than I would have learned in a long time.

He delivered newspapers while he was in high school to earn himself a little pocket money, but he spent hardly any of it and it began to accumulate; he talked to his father, who followed the stock market daily, looking for advice on where to invest it. "You ought to buy some common stock in a company," his father said.

This was 1930, and Carl was thirteen. "I didn't know what he was talking about," he said.

He explained that there had been a big crash in the stock market and that it would therefore be a wonderful time to invest . He wanted me to withdraw all my savings from my paper routes and other jobs, and I had some government bonds. (The total, he told a reporter many years later, was about $1,000.) I said, "Okay, what should I buy?" He said I ought to buy Dow Chemical stock, since it was way down to $75 a share. We took all my life savings and bought Dow Chemical stock at $75 a share. A few months later he said we had to talk some more because that stock was now down to $50 a share. He said, "I feel pretty bad that you've lost a third of your money. I really don't have much money, but I have just enough to invest the same amount as you did and buy more shares at $50 each than you bought at $75 each, so I'll trade you $50 shares for $75 shares." I said, "Okay." My $50 a share stock, adjusted for splits, has an adjusted cost basis of 27 cents a share today,

he said, in 1988.

The stock market became the principal subject of discussion between the father and son, and their correspondence was full of such discussions until his father's death in 1945. "I think the greatest experience of all was my father having me gamble all of my assets on one thing," he said. "Very few people go through an experience like that. You can go to school and play with things, but when it's your paper route and you've saved your money and you've given up and sacrificed buying things you wanted, you care and you pay attention."

Unfortunately his father was not a happy man, he admitted.

My father did not like his boss and he did not like the company he worked for. He would talk about this at dinner time, and it dawned on me that because he was anxious for my sister and me to have an education, he was trapped in a situation that was very distasteful to him. He couldn't quit because he needed the money and there were no other jobs. That situation impressed me greatly. I wanted never to be in a position where I couldn't tell my boss to go to hell or quit the company for which I worked. I never wanted to be in economic trouble. I wanted to be independent so that I never had to be as unhappy as my father was with his daily work. That was very strong in my feeling.

Although he was a mechanical engineer, what his father really loved was finance and investment, Carl said.

During the 1930s Depression, he subscribed to advisory services. We would read the magazines and talk in the evening about what stock would be a good investment. We made every mistake anybody could make, but we did it with very small amounts of money. He taught me more than any college course. My father and I made all the mistakes you can make, but I learned more things from that work with my father.

(Continues...)



Excerpted from CHAIRMAN OF THE BOARD by E. N. Brandt Copyright © 2003 by Michigan State University Press. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Contents Sources and Acknowledgments....................ix
Introduction....................xv
1 Rollie and Eda, 1916-34....................1
2 Dumbbell, 1934-39....................13
3 Troubleshooter, 1940-46....................27
4 The Mentor, 1946-59....................47
5 The Troika, 1960-67....................71
6 Chairman of the Board, 1968-76....................105
7 Elder Statesman, 1976-81....................137
8 Philanthropist, 1981-87....................159
9 The Beloved City, 1987-95....................183
Epilogue....................199
Appendix....................213
Notes....................217
Index....................227
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