Bitter Brew: The Rise and Fall of Anheuser-Busch and America's Kings of Beer (18 page)

“I had six other children, so I couldn't go crazy,” Trudy said years later. “I couldn't forsake them for my grief. I accepted in general that sad and terrible things are part of life. I was able to deal with it much better than Gussie. He couldn't handle sadness.”

“He became like a child himself, and he didn't help her in that regard,” said Adolphus. “He was another child for her to deal with.”

On the days that he showed up at the brewery, Gussie was unfocused, erratic, and disruptive. His thoughts wandered in the middle of conversations; seemingly nonsensical statements popped out of his mouth. In a management committee discussion about the need for still more production capacity, for example, he said in apparent seriousness, “We don't need another brewery; we just need to keep raising the price until people stop buying it.”

“August thought that Dad had lost his mind,” said Adolphus. “Christina's death seemed to have speeded up his aging process, as if some form of dementia had kicked in.”

Gussie brought twenty-two-year-old Adolphus with him to another meeting at the brewery. With his arm around Adolphus's shoulders, he said to the group of executives that included August, “I want you all to meet my son. He is the one who is going to be taking over for me; he will succeed me.”

“Things like that went on constantly,” said Denny Long. “August didn't react to it because he knew it wasn't reality. No one from the family was going to take his place. The old man didn't have his hands around the brewery. It was his way of fighting back, inflaming things, making August look bad or feel bad.”

Gussie's sudden deterioration added urgency to secret meetings August held most Saturdays at Waldmeister Farm. The purpose of the meetings—which had been going on for more than a year—was to plan how the company would be organized and operated post-Gussie. The attendees were the core group of young executives—the MBAs and others like Denny Long—who owed their jobs and allegiance to August. They'd taken to calling themselves “the Dawn Patrol” due to the ungodly hour he imposed on the meeting—6:30 a.m., which meant they had to be on the road before 6:00 to traverse the thirty miles to Waldmeister. You did not want to be late for a meeting with August, or tired either, so they tried to be in bed early on Friday night. And this was in addition to the twelve-hour days they worked at the brewery and the calls they could expect from August at any hour on a Sunday or a holiday asking terse, pointed questions about their areas of expertise that they'd better be able to answer to his satisfaction. As much as they resented August's dominion over their lives, however, they were thrilled he'd chosen them to be on the team that would run Anheuser-Busch after Gussie either retired or expired.

In early 1975, August began considering a previously unthinkable option—forcing his father out. It would be a drastic move, to be sure, messy and emotional, but he saw no other way around the impediment that Gussie had become.

Miller provided the impetus. The Milwaukee brewery had doubled its market share and its production capacity since Philip Morris acquired it fully in 1971, jumping from seventh place to fifth, in terms of barrelage. Under CEO John Murphy, a savvy cigarette marketer, the company had reinvigorated its signature Miller High Life brand by repositioning it from “the champagne of bottled beers” to the working man's brew through a series of TV commercials that featured the tagline “If you've got the time, we've got the beer.” The company further demonstrated its marketing chops in January 1975 when it introduced Miller Lite with a brilliant TV ad campaign that featured famous former athletes (including NY Yankees legends Whitey Ford and Mickey Mantle) comically debating the relative merits of great taste and fewer calories, along with the memorable tagline, “All you ever wanted in a beer. And less.” It would prove to be the most successful new product launch in the history of the industry, propelling Miller into fourth place by the end of the year.

August didn't believe that a light, low-calorie beer would ever supplant his full-bodied Budweiser as America's favorite, but he saw Miller's rapid growth as a serious threat to A-B's industry dominance.

“August understood that we were at war with them,” said Denny Long. “Gussie didn't.”

So August set out to convince the board of directors that, for the good of the company, it was time for his father to go. He met with them individually over a period of months and found them surprisingly receptive to the idea. Even Gussie's closest friends on the board acknowledged that they were concerned about his mental acuity and the challenge from Miller.

August chose the May board meeting to make his official pitch to the directors. Gussie was alerted to the impending vote the night before, and Trudy was asked to accompany him to the brewery, where August had a doctor standing by in case the old man went into cardiac arrest. August entered the boardroom on the third floor armed with a detailed presentation and signed statements from all the members of the Dawn Patrol saying that they would resign if he was not named CEO. He was fairly certain he had the votes, but still he worried that some of the directors might lose their nerve in a face-to-face confrontation with Gussie, who doubtless went into the room thinking that he would prevail, as he always had.

This time, however, the board did not bend to Gussie's will. One by one, directors who had rubber-stamped his every whim for years went against him and voted him out as chief executive. As expected, Gussie flew into such a purple, vein-bulging rage that some people present wondered if his head might explode. Waiting in Gussie's office, Trudy heard him shouting over the commotion as he stormed down the hallway after the meeting had ended: “I thought you were my friend, goddammit,” he hollered at someone.

“He was beside himself, screaming,” Trudy recalled.

August walked directly into Denny Long's office and said simply, “It's done.” He quickly called a meeting of all executives on the management committee. “There's been a change,” he told them. “The board has put me in charge because the Chief has decided to retire.” (He always called Gussie “Chief.” Most people assumed it was out of respect, but Long suspected he was uncomfortable with the more intimate “Dad.”)

The official story was, of course, a lie. Gussie hadn't decided anything. The terms August and the board had presented to him were nonnegotiable and, given his fifty years of service, brutal: He could retain the title of chairman, but it would be purely honorary. He would no longer have any say in running the company. Nor would he be entitled to the free use of company planes, automobiles, boats, or the Adolphus rail car or motorbus. Even the operations at Grant's Farm—the exotic animal enclosures, the deer park, the Bauernhof, and the Clydesdales—were no longer in his purview; the company had leased everything but the big house and the Cottage.

As an inducement for him to go quietly, they said he could stay on as president of the Cardinals, but only if he accepted the terms and stated publicly that he was stepping down voluntarily. He had twenty-four hours to decide before the offer was taken off the table.

Gussie arrived back at the big house that evening still raging. As he hollered for all the family to gather in the gun room, Trudy pulled Adolphus aside. “August has thrown out your father,” she said. “Dad is not in charge of the company anymore.” Adolphus was astounded. “What?” It was not something he ever imagined could happen. “I told you,” Trudy said. “I always thought that little sonofabitch would do something like this, a sneak attack. It's the way he is.”

As Gussie explained to the six kids what their half brother had done, his mood cycled from disbelief and despair one moment to vengeful resolve the next: “How could my own son do this to me?” … “That no-good goddamn bastard, I'll get him for this.... We are going to fight this thing.”

By “we,” he meant all of them. He made it clear that everyone in the family was going to have to choose—they stood either with him or with August. And if they sided with August, then they were dead to him, and disinherited, too.

Adolphus's mind reeled. He was about to graduate from college, and would be the first of the American Busch family to do so. His plan was to work at the brewery—starting at the bottom and, hopefully, climbing the management ladder to one day succeed August, who was seventeen years his senior. Gussie had always encouraged him in this regard, and was himself proof that the second-born son could become king. Adolphus had just filled out a pro forma job application at the brewery, but a routine entrance physical indicated he had a hernia that needed to be corrected through surgery before he could start. The surgery was two weeks away.

Adolphus knew he could never go against his father. The two had become increasingly close in the last few years. But he also knew that if he sided against August, and August prevailed, then he probably would never get to work for the company; August would see to that.

“There was no way any of us could avoid taking a side,” he said. “You couldn't be neutral. Dad wouldn't allow it. You had to declare.”

To Gussie's deep disappointment, three of his daughters by his previous marriages, Lotsie, Elizabeth, and, to a lesser degree, Lilly, supported August. “Daddy really needed to retire; he was exhausted,” said Lotsie. “The board probably did what it had to do, even though it could have been done better.”

Gussie quickly pressed Adolphus, Peter, Billy, and Andrew into service. “The four of you boys have to have a talk with your brother,” he told them. “He owes the family an explanation.”

Feeling “a mix of anger, sadness and disbelief,” Adolphus put in the call to August and arranged a meeting at the fence that separated Waldmeister from Belleau Farm. “There was so much animosity right then that it couldn't have happened in either house,” he said later. August brought along his twelve-year-old son, August IV, so all six of Gussie's male heirs were present for the face-off.

Adolphus did most of the talking for his side. “Why did you do this to our father?” he demanded to know.

“I had no choice,” August responded. “Papa was slipping. The board of directors saw it, and you did, too. We all saw it.”

“But why now, so soon after Christina? And why did you do it by surprise and humiliate him like that? Couldn't you have talked to him?”

“We tried,” August said. “People went to him about some of the things that have been going on, and they advised him to step back and take some time off. But he didn't listen. If I had done it your way, then he would have fought it; he never would have gone along. You know how Papa is. He would have gotten rid of me.” Adolphus couldn't argue with that; he knew it was exactly what Gussie would have done.

For fifteen minutes, August defended his action passionately but without emotion or apology, repeating that he'd done what had to be done for the good of the company, the family, and their father. Throughout the confrontation, August IV hung back about fifty yards, as if afraid to get too close. August turned to him several times, saying, “Come on up here, son. I want you to hear this.” But the boy stayed where he was.

Adolphus didn't know what the meeting was supposed to accomplish, but he was sure it settled nothing. He walked away from the fence feeling the weight of his father leaning on him for support in a fight he feared they'd already lost.

The shock of the coup had the immediate effect of focusing Gussie. Now he had an enemy—his own son—and he was not without options, or friends. He owned about 15 percent of the company's stock, and through the trusts set up by his father he controlled another 15 percent. August, on the other hand, owned only about 1 percent of the shares. So it was not far-fetched for Gussie to think he might be able to use the imbalance to turn the tables on August. One of the first visitors to Grant's Farm after the board's vote was a politically connected attorney named Louis B. Susman. After conferring with Susman, Gussie tacitly agreed to the board's terms in order to avoid a public fight that would drive down the price of the company's stock. Susman, meanwhile, began secretly looking for a buyer for Gussie's shares.

On Thursday, May 8, Anheuser-Busch announced that the “Grand old man of the American brewing industry” was stepping aside as chief executive. In a press release written by Al Fleishman, Gussie was quoted as saying, “After more than 50 years of active association in the only job I ever had and the only company I have ever been associated with, I am stepping down as chief executive of Anheuser-Busch. This has been more than a company or a business to me, and it is not an easy decision.

“The fact is, I have had three love affairs in my life. First has been my wife and family; second, the company, which bears the proud name of Anheuser-Busch, and third, this great community of St. Louis.” (Fleishman cleaned up Gussie's previous statement to a reporter that the company was first in his heart, followed by his family.)

The news coverage was as incurious as it was idolatrous. Every newspaper, magazine, and TV broadcast swallowed whole the fiction that Gussie had graciously stepped aside in favor of August III. Not one report connected his exit to recent events such as the death of his daughter, the management layoffs at the company, the resignation of Dick Meyer, lagging sales, or sagging stock performance. There wasn't a hint of his decline or of tensions with August and the board. Nowhere was it reported that Gussie's retention of the chairman title was purely honorary, leaving the public to assume that he still had the final say in things, even if August was now in charge of the day-to-day. Thanks to Al Fleishman and his public relations company, August's boardroom coup would remain a secret for nearly fifteen years.