Authors: Richard Kluger
Such caution and territorial bickering seemed absurd to Ernst Wynder, the Sloan-Kettering investigator who by the age of thirty had established himself as the nation’s, and perhaps the world’s, boldest scientific assailant of cigarette smoking. Writing in the November 1954 issue of the
Pennsylvania Medical Journal
, Wynder laid out his case witheringly. Doubtless such peripheral factors as air pollution and occupational hazards contributed to carcinogenesis,
and surely genetic and hormonal factors with their systemic effects abetted an “internal disposition” to lung cancer among some of its victims, but such susceptibility was “a factor affecting all human diseases” and could hardly serve to explain away the relatively high frequency of this disease among serious smokers. While no one study or factor had yet conclusively incriminated cigarette smoking, the emerging pattern of evidence was cumulatively persuasive to Wynder: “The established statistical association … is a causative one.” The cigaretti makers, rather than going out of business, ought to respond to the evidence already at hand—and not wait until it became conclusive—“by modifying the manufacture of tobacco products,” perhaps with truly effective filters that selectively removed the offending agents in the smoke as these were identified.
The public seemed to agree. By the end of 1954, one of every ten cigarettes bought was a filter tip, and per capita cigarette consumption dropped another 6 percent that year, making a falloff of about 10 percent over the two years in which the Wynder skin-painting experiment and Hammond-Horn population study were reported.
IX
JOSEPH FREDERICK CULLMAN
III was well into his thirties before he began working closely with his father in managing Benson & Hedges, the manufacturing end of their family’s various tobacco businesses. Joe Third was a short, lively fellow, but notably less earthy and demonstrative than Joe Junior. There was little at first to suggest that he would one day emerge as the most successful tobacco merchant since Buck Duke.
Young Joe was not a stellar student at the elite Hotchkiss School or in Yale’s class of 1935 nor a leader among his peers in an era when youngsters of the Jewish faith, whatever else their background, were not eagerly received on the playing fields of the Eastern social establishment. But Joe Third had a pragmatic mind, keen curiosity, plenty of energy, a superior athlete’s grace and channeled aggressiveness, and an infectious personality with a natural knack for storytelling. “He was just fun to be with,” said his brother Edgar, the third of the four Cullman boys and the one who went into Culbro, the family’s tobacco-growing and brokerage business. Yet there was a perceptible, guarded quality about Joe Cullman and the self-possession of a skilled cardplayer working the game of life.
Fresh out of college in the middle of the Depression, he went to work as a fifteen-dollar-a-week clerk at the Schulte tobacco counter in the lobby of an office building behind the New York Stock Exchange. It was a sixty-hour work week during which he was obliged to try to foist “push items” on his customers
in accord with their manufacturers’ payment for same. Then came a stint at the Upmann cigar factory in Cuba, learning the leaf and manufacturing end of the trade, followed by a more intensive spell as a traveling salesman for the Webster-Eisenlohr company, peddling their line of cigars on the East Coast. Although the Cullmans sold the Webster people the tobacco they used as wrapper for their cigars and his father later became involved in its management while the company was in bankruptcy, Joe Third was spared little of the pain of the drummer’s life. Essentially a quite private person, he applied a native optimism and self-confidence that are essential to effective salesmanship. For all his advantages of upbringing, moreover, Joe was no high hat and mingled easily with those below his social station.
His taxing five-year apprenticeship was not a merry one, and it was hardly surprising that Joe Third jumped the gun on World War II by enlisting in the U.S. Naval Reserve in 1940, serving first in Washington but spending much of the war as the chief air defense officer on the light cruiser U.S.S.
Montpelier
. Struck by how little his young wartime colleagues understood about what they were fighting for, Joe gave thought to becoming a history teacher at war’s end and did in fact take some history courses at Columbia upon his return to civilian life. But by then his father badly needed him at Benson & Hedges. Young Joe proved a less lovable but more orderly executive than his father, so much so that when he would reduce his thoughts and concerns to memos, as he had routinely done in the navy, Joe Junior balked, preferring face-to-face communication. “There is nothing easy about working for your father,” Joe Third recalled.
As the smoking and health issue gathered momentum in the early ’Fifties, Benson & Hedges’s Parliament brand, with its recessed filter, continued to grow steadily. In 1951, it became the twelfth best-selling U.S. brand; by the next year, its market share reached one-half of 1 percent—tiny, to be sure, but lucrative since Parliaments sold at a premium nearly 50 percent above the standard brands. By 1953, as the filter field grew more crowded, the company’s volume surpassed $20 million, and Benson & Hedges was a bustling little business with 600 employees and a 4 percent net profit.
But the solid standing of the prosperous little company was precisely why Joseph Cullman III decided that the moment was ripe to end Benson & Hedges’s existence as a tiny independent in a field of giants. The major companies were now muscling in on the Cullmans’ turf with filter-tip brands, and since industry leaders Reynolds and American Tobacco were likely to market popularly priced versions in the imminent future, the premium price that Parliament had been commanding was in peril. Parliament’s cotton filter, moreover, needed fixing. As its fibers swelled during the manufacturing process, they formed loose twists of irregular sizes and configuration, resulting in an inconsistent performance that was no longer tolerable when measured against
the effectiveness of the cellulose, acetate-based filters coming into common use among the big cigarette makers. Such competitive pressures as well as “developments in the field of public health,” stated a 1953 B&H status report on its research needs for the following year, doubled the need to “search for the responsible agents for carcinogenic action of cigarette smoking … . The overall outlook for a small firm with limited resources is not bright when viewed against the background of current research budgets of some of the large manufacturers.” B&H would earmark only $31,000 for such purposes in 1954.
Mindful of these realities, Joe Third raised the idea of seeking a purchaser with his brother Edgar, who saw its merits but suspected that their father, full of pride over how Benson & Hedges had been built up, would strongly object. They agreed, though, that there was one potential buyer who, if interested and willing to pay generously, might overcome Joe Junior’s understandable reluctance to sell—Cullman’s longtime friend, Philip Morris chairman Al Lyon. Indeed, Lyon had practically become a member of the Cullman family, clowning with the youngsters and growing especially close to Edgar, whom he would take out on early morning fishing trips and regale with tales of his career as a globe-trotting drummer.
Not long after, Edgar, not directly connected with Benson & Hedges, found himself on the same Stratocruiser, returning to New York from Nassau, with Lyon. The two repaired to the bar in the belly of the craft, and Edgar asked if Philip Morris might have an interest in taking over B&H. “Talk to your father,” Lyon urged, “and if he’ll consent, come see me at the Carryle,” the fashionable upper Madison Avenue hotel where the Philip Morris chief kept a suite. The task of persuasion fell to Joe Third, then B&H’s executive vice president. “My father was very proud of our progress—of his watch-charm jewel of an operation,” young Joe remembered. But Joe Junior, in his seventies by then, was swayed by his son’s conviction that the day of the popularly priced filter brand was at hand. “I told him I didn’t think we could compete much longer with the resources and technology available to us. Still, he was really opposed.” But the negotiations were allowed to proceed, no doubt on the premise that a sufficiently high price would ease the senior Cullman’s unhappiness.
A perceptible drift had settled over the executive offices of Philip Morris, occupying the fourth floor at 100 Park Avenue and running the entire block between Fortieth and Forty-first streets. President Parker McComas had brought order and stability to the company, which was now comfortably in the black. But the patriarchal McComas, essentially an inside man and a numbers specialist with an ex-banker’s reserve, deferred in the crucial marketing area to Chairman Lyon, who, nearing seventy, was a spent force.
Reflecting a lack of direction, the Philip Morris product line was stagnant in the early 1950s. Sales were flat in 1951, slid 6.6 percent in 1952, and dipped
an additional 3 percent in 1953. Surveys by rival companies disclosed the main reason: a public perception that the flagship Philip Morris brand had “a sort of musty taste” and its simulated wood-grain package a dreary look that attracted few switchers. Philip Morris loyalists, moreover, were proving not all that loyal. Composed disproportionately of East and West Coast urbanites, college students (thanks to an aggressive network of campus sales representatives), and women who were light smokers, Philip Morris users were also more concerned than others about the health question and all too inclined to switch to Pall Mall, Kent, and Viceroy, then being pitched as virtually therapeutic smokes. Lyon’s advertising now seemed dated. In a desperate bid to exploit the growing chorus of industry advertising on the health question but lacking a product on which to base a plausible claim, Lyon lamely authorized ads urging buyers to make “The Switch That Takes the Fear Out of Smoking.” Urged by younger subordinates to bring out a king-size Philip Morris, Lyon opted instead to dress up the company’s old filterless king brand, Dunhill, with a corklike tip and offer it to the health-conscious with the slogan “King Dunhill Screens Out Irritants.” But when buyers tried it and found it had no filter to do the screening, Dunhill fizzled despite a costly ad campaign. And when Lyon finally kinged the Philip Morris brand in 1953, it did not attract enough buyers to compensate for the drop in sales of the standard-length staple. The company was going nowhere.
Emblematic of its problem was that even when it made an inspired media buy, the marketplace did not respond. Lyon had been summoned to the little theater in the mansion of his company’s savvy publicist, Benjamin Sonnenberg, in 1951 and shown the pilot film for a new situation comedy, then a new format in television programming. Lyon liked the sample of the planned series, about a zany Cuban bandleader and his nutcake of a wife, well enough to agree to the $19,000-per-episode cost, but declined to pay an extra $2,000 per show for Philip Morris to retain the rights in perpetuity to “I Love Lucy”. The show promptly scaled the heights of TV hilarity, and when co-stars Desi Arnaz and Lucille Ball were caught up in the Red-baiting frenzy of the day after signing an ad for a cause said to be sympathetic to communism, McComas asked only, “Are they guilty?” Upon being reassured they were political naifs, Chairman Lyon got on the telephone to the Desilu studio to advise their inspired clowns, faced with the prospect of blacklisting, that the company would stick firmly by them. By 1953 “I Love Lucy” was the top-ranked show, seemingly well worth the $3.5 million a year it was costing the company. Yet surveys showed that while almost everyone knew about the boffo show, relatively few could identify the sponsor, with its lackluster commercials.
The dearth of fresh marketing ideas was painfully evident to the field sales force, especially in the Southern territories worked by native North Carolinian Paul Jeblee, who as a boy had helped raise tobacco and would later become a
ranking Philip Morris sales executive. Jeblee was finding it so tough to get the company’s brands into stores that he resorted to outfitting a panel truck with old “Call for Philip Morris” placards, parking just outside plant gates at closing time in factory towns, and selling cartons to departing workers. He might move four or five dozen cartons on a good day, then go over to the leading local cigarette retailer, pay him what he would have earned if he had sold the cartons from his shop, and with that inducement ask for an order and the chance to put up a display. At the company’s own factories in Richmond, meanwhile, manufacturing had been cut to three or four days a week as PM brands slumped. “It was an operation run by poor boys and strong men,” recalled one veteran Philip Morris hand, “and everyone felt damned glad to have any kind of job.”
McComas brought in a new sales manager from Pepsi-Cola and a strong finance man from American Airlines, promoted from within, and sparked up PM advertising. But the change that paid the quickest dividends was the 1952 hiring away of the easy-mannered George Weissman from Ben Sonnenberg’s public-relations shop.
A product of the best public education that New York City could offer—Townsend Harris high school for the gifted and City College’s Bernard Baruch School of Business—the Bronx-born Weissman found that junior accountants were in oversupply, and, given his gift for clear written expression, went to work as a newspaperman in New Jersey. After wartime service as the commanding officer of a subchaser, the mellow-voiced Weissman worked for a while for Hollywood producer Samuel Goldwyn’s New York publicity office and then caught on with Sonnenberg’s crew of smooth flacks. He did so well in his four years on the Philip Morris account, building up the hardly colorful Parker McComas through speeches, press releases, annual reports, and special events, that Weissman was offered the post of executive assistant to the PM president.
After only six months on the job, he was asked by McComas to put down on paper what he thought the company needed most to energize itself. Not without hesitation, Weissman produced a thirty-two-page memorandum which would prove the making of a career that was to carry him to the pinnacle of New York corporate and cultural power. The memo contained two main suggestions. The first was for a marketing department to help frame PM’s sales and advertising decisions. Weissman had been appalled by the lack of sales data and absence of research in the field. “Everything just sort of funneled in to Al Lyon,” he recalled of the idiosyncratic decision-making process. Nor was there even the semblance of a product research program until McComas ordered the creation of a small laboratory in the rear of the fourth floor of one of the company’s auxiliary red-brick factory buildings, where old Richmond production hands were less than delighted when the water would occasionally
overflow and damage the leaf stored on the floor below. Weissman’s second suggestion was that since filter-tip cigarettes were clearly the coming thing—“I was seeing more and more Parliament and Kents around town”—Philip Morris ought to develop its own entry promptly.