Glock: The Rise of America’s Gun (23 page)

Bereczky first met Gaston Glock in 1995, when she worked days as a hotel concierge in Atlanta and nights as a hostess at an upscale seafood restaurant. The Austrian businessman sometimes stayed at the hotel and ate at the restaurant. He stopped to speak to Bereczky, a slim, attractive young woman with a pale complexion and short dark hair. “He spoke to me in German,” she recalled. “He was this kind old man who paid attention to me.”

She had left her native Romania in 1989 as the Soviet bloc crumbled. Eventually she followed her divorced mother, a former ballet dancer, to the United States. Mother and daughter lived in a dingy, insect-infested apartment in Atlanta. Monika worked seven days a week from five a.m. until late at night. After several conversations, Glock invited her to visit his gun plant in Smyrna. Monika’s suspicious mother told her not to go. The older woman did not trust Glock and assumed he had lecherous intentions.

Monika was torn. In her mid-twenties at the time, she knew nothing about guns or the firearm business and was not particularly interested in learning. But she wanted a better life and sensed that Glock was offering her something. “I didn’t know how to say no,” she said.

The tour of Glock, Inc., turned into an offer of an administrative job, which Monika accepted. The post evolved into overseeing human resources: hiring and firing lower-level employees and complying with regulatory paperwork. Glock sponsored her work visa, allowing her to remain in the country with her mother, who had become a citizen. The pay was generous compared to hotel and restaurant jobs, and the hours were more reasonable.

At first, Bereczky enjoyed being a favorite of the company’s owner. When he was in town, Glock went out of his way to talk with her privately about how other employees conducted themselves in the office. Glock did this with a number of German-speaking underlings, creating resentment among the Americans. “I was awful to the Americans,” Bereczky admitted. “This was how Mr. Glock liked it. We spoke in German. The Americans were ‘stupid.’ ”

Her coworkers returned the favor by calling her a spy and
gossiping about her relationship with the boss. Glock encouraged the hostile talk with his tactile manner of showing affection for his slender young employee. “He would come out of a conference room or a meeting with his hand around my waist,” she said. “He laughed and let them know he owned me. I was something like a fool.… I went along with this to keep my job, keep my visa, and to make the money, which was good.” Bereczky said she rebuffed Mr. Glock’s more amorous advances and never slept with him. “I hated that the Americans thought I was Mr. Glock’s bimbo.”

Her duties, meanwhile, progressed in two very different directions: She gained responsibility and influence in the office, while at the same time Glock demanded that she carry out highly personal errands. The Glocks purchased, among other Atlanta real estate, a luxurious home in a wealthy neighborhood called the Vinings. When Glock was in town, it fell to Bereczky to clean the house, stock it with food, make the beds, and place candy on the owner’s pillow. He sometimes called her in the middle of the night to bring him toiletries or batteries for the television remote. When she arrived, she said, Glock greeted her on some occasions in his underwear. “I don’t know what he thought I would do when I saw him half-naked,” she recalled. “I just wanted to get out of there as fast as possible.”

Despite Bereczky’s resistance to what she saw as his romantic overtures—or perhaps because of her reluctance—Glock expected her to look after other women with whom he socialized. Over the years, according to Bereczky, she took several of these women to lunch and on shopping trips to upscale stores in Atlanta. This occasionally led to awkward scenes. Once, the day after Bereczky accompanied one of her employer’s female
friends to the local Saks Fifth Avenue, Glock’s wife, Helga, arrived in town and asked to visit the same store. Bereczky worried about returning to Saks but could not come up with an excuse to steer Helga Glock elsewhere.

“Welcome back!” a Saks salesperson greeted Bereczky, who signaled desperately for the retailer to stay quiet and play dumb. Mrs. Glock seemed not to notice the exchange, and the shopping trip proceeded without further incident.

Gaston Glock traveled in luxury and dropped thousands of dollars on visits to the Gold Club. His female friends had carte blanche at Atlanta’s most expensive stores. But he could explode in rage when underlings bought what he considered unnecessary office supplies. On one occasion that lived long in company lore, he became furious that the front-desk receptionist at the executive offices in Smyrna used a $29 headset to answer the phone more efficiently. In Austria, he bellowed, we pick up the telephone the old-fashioned way!

American employees, not surprisingly, came to anticipate his visits with dread. They fretted when the convoy of BMW and Mercedes sedans carrying him and his entourage pulled into the company parking lot: “Mr. Glock is here, Mr. Glock is here.”

Patched together on the fly, the company evolved into a prodigious moneymaker powered by excellent product design and a fearful desire not to displease Mr. Glock. And the reserve of the reticent engineer at the helm gradually gave way to capricious grandiosity. “He started out pretty humble and unassuming,” said one former American sales manager, who recalled that on his first trip to Austria, Gaston Glock picked him up
personally at the Vienna airport. “Then he began believing his news clippings.”

Karl Walter took tremendous pride in his role as Glock’s top executive in the United States and architect of the company’s marketing success. Gaston Glock found ways to remind all his employees that they were subordinates, but for a time Walter enjoyed special standing. Most visitors to the Glock factory in Deutsch-Wagram were left to fend for themselves at midday, while Gaston Glock went home to be served lunch by his wife. Walter, by contrast, broke bread with his boss at the Glocks’ kitchen table, while Helga laid out the meat, bread, and beer. The Glocks sometimes invited him to the family’s villa in Velden and took him along when they went swimming in the large lake nearby. In the late 1980s, before the Glocks knew their way around Atlanta or had bought a house there, they stayed with Walter and his family in their suburban home.

Success, however, eroded this camaraderie. “My contract was signed the day after the [American subsidiary] was incorporated,” Walter recounted. “I had a very small salary, like $50,000 a year, plus a small percentage on net revenues.” He would not reveal his exact commission, but others familiar with the company speculated that it was 1 percent. “If you came close to $100 million [in company revenue], this small percentage is quite something,” Walter said. The “super gun” stood to make him a wealthy man. “Initially,” he said, “Mr. Glock had no difficulty. Then some of his coworkers and managers became envious.”

Wolfgang Riedl, Glock’s Vienna-based marketing chief, recalled the jealousy growing in Austria among other executives,
as they questioned why Walter was so much better compensated than they were. “They started to poke Mr. Glock in the side, I believe, and said, ‘He is making too much money. I want to make this money,’ ” Walter said. His colleagues failed to acknowledge, he added, that “whatever money they made, most of it was generated in the United States.” And it was largely, Walter thought, because of his sales acumen. “Karl was very sure the Glock organization would not work in the United States without him,” Riedl said.

Richard Feldman saw more at issue than money, however. Ego, too, was a factor. The industry operative met Gaston Glock for the first time at the 1992 SHOT Show, held in New Orleans. For the third year running, the Glock booth was mobbed. “Everybody treated Gaston like a celebrity, and he enjoyed being treated that way,” Feldman said. He picked up chatter from within the company about Walter’s compensation. Feldman also noticed that when the Austrian company received industry awards at the show, it was Walter who went up to the stage to accept them. To Feldman, that was a big mistake. Studying Glock’s body language, Feldman could see that Gaston seemed annoyed not to be the one in the spotlight. “Rule number one,” said Feldman, “is you always let the guy who pays the bills take all the credit.”

In late 1992, during a visit to the Smyrna facility, Glock proposed changing Walter’s contract to cut drastically his percentage commission. The owner had no intention of making Walter a millionaire.

Taken aback, Walter refused. He and his wife, Pam, had lived and breathed Glock pistols for seven years. Was this to be his reward for all the sacrifice—to be cheated by the man he had made rich?

Glock remained unmoved. “He gave me an ultimatum,” Walter said: “ ‘Accept it, or …’ I took the ‘or.’ ” Without hesitation, Glock fired Walter, the man widely credited with establishing the company in America.

“I didn’t believe he did it,” Walter said, “because not only did I put a huge effort into it; I picked some of the best people that I could find in the industry to make it happen.”

Walter continued to work in the US gun industry as an executive and consultant, but he never regained the prominence he had at Glock.

Over the next eleven years, Gaston Glock would run through seven US sales managers. Distinguishing oneself within the company became a career-killer, and longtime employees learned to keep their heads down. Wolfgang Riedl realized that his own goal of one day directing the European branch of the company was futile. Herr Glock intended to pass control to his children. Before he could be fired, Riedl left the company for another industry job, eventually becoming a successful independent military arms broker with government clients in Asia.

As a fuming Karl Walter departed, another Glock lieutenant was ascending within the company. Charles Marie Joseph Ewert met Gaston Glock in 1985, when the Austrian traveled to Luxembourg to set up a holding company, also known as a shell company, as the partial owner of his manufacturing operation. Luxembourg does not tax holding companies on income or capital gains, making the tiny principality a popular haven for this sort of arrangement. As far as Luxembourg is concerned, shell companies are a legitimate means of sheltering
business revenue (or a personal fortune) from taxation. But from the perspective of other jurisdictions, such as the United States, routing revenue generated elsewhere through a Luxembourg shell corporation may constitute fraudulent tax evasion.