Bitter Brew: The Rise and Fall of Anheuser-Busch and America's Kings of Beer (13 page)

After a European honeymoon, the newlyweds settled into domestic life at Waldmeister. On June 15, 1964, Susan gave birth to August Anheuser Busch IV, and dutifully fed him a thimbleful of Budweiser when he was a day old. Another child—Susan—followed two years later. A family man now, August slowed the pace of his traveling, cutting it back to about 50 percent of the time, while continuing his rapid rise in the company with a promotion to vice president and general manager of the brewery in 1965. His father had approved the promotion and thought he had earned it with his performance as marketing VP. But Gussie didn't want anyone to get the impression that his son's ascension to the top spot was guaranteed or imminent. “If I've told him once, I've told him a thousand times that the board of directors does the electing,” he told
Business Week
magazine. “In my book, you rise or fall on your own.”

Of course, no one believed that. When August sat down for an interview with a reporter from the
Post-Dispatch
in April 1967, the resultant headline read, “August Busch III Prepares for Job of Keeping Anheuser-Busch on Top.” Al Fleishman had arranged the interview, with Gussie's approval. It couldn't have happened otherwise, because Fleishman tightly controlled all publicity for A-B, which didn't have its own PR department, just Fleishman's firm, Fleishman & Hillard, which devoted about 75 percent of its billing hours to telling the A-B story the way Gussie wanted it told. Apparently, he had decided it was time to introduce his heir apparent to the public.

August's official media debut was what's known in the publishing trade as a “puff piece.” The article presented the picture of a handsome twenty-nine-year-old prince in waiting, “an intense young man … who has become a well-grounded specialist in the beer and is an articulate student of the brewing industry.”

Crediting August with “a philosophy that shows both an understanding of corporate teamwork and a feeling for the pitfalls of nepotism,” the article quoted him as saying, “Family members in the corporate executive structure of a company like Anheuser-Busch can either be a great asset or a great liability.... There are some very definite advantages to having people around who have grown up in a business, who have lived with the company around the dinner table in the evening, who have learned the personalities involved.”

The article closed with a quote that now seems eerily prescient. “If you get a bad apple anywhere in the lower executive levels, you've got trouble,” August said. “But get a bad apple at the top, and you've got super trouble.”

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 8–4 in the sixth game, he hosted Massachusetts 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' 7–2 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 fucking 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 3–1 in the series. Leading in the seventh inning of game five—just two innings away from a second straight world title—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 4–1.

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 Cocky the cockatoo. 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 classroom.

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 Dick [Meyer] would get into knockdown, drag-out disagreements, and the old man would always take Dick'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 antithesis 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 analytical 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.