Bitter Brew: The Rise and Fall of Anheuser-Busch and America's Kings of Beer (16 page)

Gussie was becoming increasingly crotchety, and more and more, the focus of his irritation was August's corporate planning department, or “the MBAs,” as they came to be called around the executive office building. It was part of the MBAs' jobs to question things, but some of their questions infuriated Gussie. Are the Clydesdales necessary? Do the beech wood chips in the Budweiser aging process really affect the taste? Does taste even matter to the average beer drinker?

“The old man started to see [the department] as a threat,” said Denny Long. “He didn't want the company to be reorganized and modernized to a point where August was more comfortable but he wasn't. Weinberg would show him some computer model of something, and he couldn't follow it. He thought August was either trying to make him look foolish or push him out.”

Gussie responded predictably. The week before the company's annual sales convention in St. Louis, “I was called into Dick Meyer's office and told that my services were no longer required,” Weinberg recalled. “August felt compelled to accompany me to my home when I told my wife that I'd been fired.”

Gussie also ordered Denny Long—in August's presence—to “go down there and get rid of that whole damn department.” That provoked a loud argument between father and son behind closed doors in Gussie's office. After the shouting stopped, August walked into Long's office and stood staring out the window. His father had just demanded his letter of resignation, he said, turning from the window to face an astonished Long with tears in his eyes.

That night, Long and August's best friend, John Krey, drove out to Waldmeister Farm and begged him to give up his fight to reorganize the company for now and work things out with his dad. It wasn't the right time, they told him. Gussie was still too powerful. Think of another way. Wait for another chance.

August took their advice, and instead of tendering his resignation he wrote a conciliatory letter to his father that played up family ties and loyalty. In so doing, he managed to save not only his own job but most of the MBAs' as well. Only a few of the weaker staffers were let go, and Weinberg continued advising August on a consulting basis. Gussie seemed mollified by the sacrifice of Weinberg, boasting in an interview with
Forbes
magazine that he “recently cracked down on a computer expert” and had “slashed his million-dollar staff.”

“When you try to run a company on a computer basis, I have to tell you no,” he said. “Beer is a people business.”

According to the magazine, when asked if August would succeed him, Gussie replied, “Not necessarily. I hope he can make it. I made it very clear that nothing would please me more than if he took over when I died. But he has to measure up and do the job.”

There it was, as clear as he could make it: he intended to hold on to the reins of power until he dropped dead in the driver's seat.

And then came a backhanded, belittling compliment to the kid: “He is a grand, bright lad and he works very, very hard.”

Gussie wasn't done yet. Several days after the
Forbes
interview, he announced at the annual A-B shareholders meeting in St. Louis that he was recommending to the board of directors that fifty-four-year-old Dick Meyer be promoted to president of the company. He said that he would remain chairman, and, oh yes, he also was recommending August for Meyer's job as executive vice president.

The announcement was nothing less than a public spanking. And it was all the more shocking because it marked the first time in A-B's history that someone outside the family was named president. The financial press jumped on the story, saying Gussie was “teaching his chilly, tough-minded son some humility,” and that “growing speculation” favored Meyer to eventually succeed him in the top job.

August's reaction was stoic. If he felt humiliated, he didn't let on; he went about the business of the brewery as if nothing had happened. He did, however, ask Denny Long to start researching how boards of directors were constituted and elected, and how they governed in the modern business environment, as opposed to that of Anheuser-Busch, where they both had spent their entire professional lives.

Gussie soon was caught up in the hoopla surrounding the Memorial Day grand opening of the company's third brewery-adjacent theme park. Busch Gardens Houston was a $12 million, forty-acre Asian wildlife extravaganza that featured a monkey island, an elephant compound, a deer park, a Bengal tiger temple, a rhinoceros enclosure, a petting zoo, a free-flight bird cage where visitors could stroll among a hundred species of exotic birds, a miniature turn-of-the-century railroad called the Orient Express, and a canopied boat ride through the “Ceylon Channel.” There was also an incongruous refrigerated geodesic dome called “The Ice Cave” that housed polar bears, penguins, and sea lions. Apparently, Gussie couldn't restrain himself. The company predicted that the Houston facility would draw between 700,000 and 800,000 paying visitors ($2.25 for adults, $1.25 for children) during the first year.

August made a public break with his father in November 1971, when he officially came out as a Republican. Appearing at a $500-a-plate fundraising dinner at the Greenbriar Country Club, he said he supported the GOP because he was “concerned about the success of this country over the next 10 years. I'm concerned about the will to do a day's work for a day's pay, which we've lost sight of. That's what made this country great, wasn't it?”

When a cheeky reporter asked him if his father knew where he was, August smiled and replied, “We have a great philosophy in our company: Everyone is encouraged to express his individual views.”

Gussie's views had not changed since Prohibition—he remained a dyed-in-the-wool FDR Democrat. “I don't bite the hand that fed me,” he liked to say. He was a close friend of former president Lyndon Johnson, who'd been aboard his yacht on more than one occasion, and he'd entertained Johnson's vice president, Hubert Humphrey, at Grant's Farm when Humphrey ran against Richard Nixon in 1968. There was one Democrat he couldn't abide, however: Bobby Kennedy. His animus stemmed from a meeting the two had while Bobby was serving as his brother John's attorney general in the early 1960s. According to the story Gussie told among friends and family, when he was escorted into the AG's office, “that arrogant little prick” didn't even stand up to greet him, but rather remained seated, leaning back in his chair with his feet up on the desk. Gussie took that as a sign of disrespect that bordered on contempt, and he never forgot it. When Bobby was assassinated in June 1968, his reaction was simply, “Serves him right.”

Still, it was a stunner when Gussie announced in September 1972 that he was supporting a Republican for president. “I have examined the record of President Nixon and Senator George McGovern on the issues,” he said, “and I feel that, all things considered, President's Nixon's re-election would be in the best interest of the nation and the future.” Of course, the man who recruited him to the other side was Nixon's treasury secretary, former Texas governor John Connally, an old friend of Gussie's and a Democratic icon for having been wounded while riding in the open convertible with President Kennedy the day he was assassinated in Dallas.

McGovern's dumping of Missouri senator Tom Eagleton as his vice presidential running mate a few weeks earlier likewise may have had something to do with Gussie's sudden appreciation of Nixon. Eagleton was practically a member of the Busch family. His father Mark, a prominent St. Louis attorney, was a longtime Gussie confidant who had represented him in his divorce from Elizabeth. Tom Eagleton's first job out of Harvard Law School was as assistant general counsel at Anheuser-Busch, and Gussie had generously backed his subsequent political rise. McGovern picked Eagleton to be on the ticket with him on the last day of the Democratic National Convention. He asked him to withdraw eighteen days later when it was revealed that the first-term senator had once undergone electroshock therapy as a treatment for depression.

It's doubtful that Gussie took much joy in Richard Nixon's reelection, however; by that time he was fighting battles in every corner of his kingdom, with some embarrassing results.

It started with Cardinals pitcher Steve Carlton, who, after winning twenty games in 1971, held out for $10,000 more than Gussie wanted to pay him in 1972. When Carlton failed to show up for spring training in February, Gussie ordered him traded to the Phillies. “The sonofabitch is gonna go no matter how good he is,” he bellowed.

Two weeks later, the Cardinal players voted 35–0 to join nine other teams in authorizing the Major League Baseball Players Association to call a strike unless the owners contributed more money to the players' pension fund. Gussie promptly blew his stack. “They can have a strike as far as I'm concerned,” he told reporters. “I'm fed up to here [indicating his eyebrows]. They are going to ruin baseball the way they are going. I'm against knuckling under, and you can quote me.”

The
St. Louis Post-Dispatch
did more than quote him. The newspaper published a baldly affectionate editorial titled “Gussie at the Bat”:

After an eleven-day strike, the first in the history of baseball, the two sides reached an agreement. But as the season finally got under way, Gussie continued to vent, accusing his players of ingratitude, disloyalty, and treachery, ordering them to travel in smaller planes and double up in hotel rooms, going so far as to cancel the free case of beer each player traditionally received during home stands. Al Fleishman could not spin the national media this time. A
Newsweek
article depicted Gussie as a petty, vindictive tyrant who “seemed chiefly intent on revenge.”

“As a result, team morale is at its lowest ebb and the tense atmosphere in the Cardinals clubhouse is reflected on the field,” the magazine reported. The article quoted several unnamed Cardinal players blaming the boss. Said one, “In all other cities the strike was forgotten right after the season started. Not in St. Louis. Busch kept talking about it, and the fans were all ready to boo when they got to the park—and that hurt us.”

Indeed. The Cardinals finished the season in fourth place and posted a financial loss of nearly $600,000. Steve Carlton, on the other hand, finished his first Phillies season with 27 wins (including 15 in a row), 30 complete games, 8 shut outs, 310 strike outs, a 1.97 ERA, and a unanimous selection as the winner of the National League Cy Young Award. In sum, he made Gussie look like a chump.

It got worse. Four days before Christmas, Anheuser-Busch reported that Busch Gardens in Houston—Gussie's baby—was a bust, and the company was taking a $4 million write-off against fourth-quarter earnings. The company stock immediately dropped seven points. A week later, Gussie announced that the Houston gardens would be closed and converted into “a sales promotion facility.” A local Houston newspaper, the
Baytown Sun
, declared the situation, with its loss of hundreds of jobs, “a disaster.” When Denny Long was sent to Houston to oversee the closure, he found that someone had shot up the park's entrance sign.

At the annual shareholders meeting in April, Gussie, Dick Meyer, and August sought to play up the 26.5 million barrels A-B had produced in 1972 and the company's sixteenth consecutive year in first place. But questions about declining profitability, falling share prices, and the challenge from Schlitz put them on the defensive. They explained that the company was caught in a squeeze between the fast-rising cost of its “natural ingredients”—hops, barley, and rice—and President Nixon's Economic Stabilization Program, an anti-inflation effort better known as wage and price controls, which prohibited the company from passing the cost increases along to consumers. Schlitz looked better on paper for the moment, they claimed, only because the Milwaukee brewer used cheaper, non-natural ingredients in its brewing process.

“We are not going to trade cost efficiency for lower product quality,” August vowed. “We are not going to trade solid long term growth for short term earnings gain.” Gussie put it in a more personal context: “As long as I am in charge, I'm not going to lower quality.” He believed in his bones that shortcuts and substitutions were the road to ruin in the brewing business and that his friend Bobby Uihlein was making a terrible mistake in playing around with his product formula, risking nothing less than the destruction of the company.