Glass House Read online

  In its annual report for 1987, Newell called the showdown over Clarksburg “a ‘public’ exposure type problem.”

  It kept selling off bits of Anchor Hocking—the natural gas transmission division, the packaging and closure plants, the trucks—until Anchor Hocking amounted to Plant 1 and the distribution center in Lancaster, as well as the Phoenix plant in Monaca.

  Meanwhile, Western Savings and Loan collapsed during the S&L crisis of the 1980s. Driggs resigned as president and CEO in 1988—at just about the same time that Newell declared victory in Clarksburg. In 1989, the Federal Deposit Insurance Corporation took over the insolvent Western. Driggs was sued for fraud and conspiracy. He settled for $650,000. He also pleaded guilty to federal felonies and served probation in lieu of prison. Driggs resigned from Newell’s board in 1989 but was soon back on it, serving as a member of Newell’s audit committee.

  * * *

  Dale Lamb was far removed from people like Driggs and Simon. He’d lived the farm life, but he didn’t see much romance in it. His parents owned a farm just outside Lancaster, and they also worked another one nearby, growing oats and corn and raising hogs and a few dairy cows. This meant that Lamb worked the farms, too, because that’s what you do when you grow up in a farm family. The other kids in the “county” school he attended foretold their lives at forty by wearing the blue corduroy jackets of Future Farmers of America, but when Lamb projected that far ahead, he knew he didn’t want to “ride a plow around and talk to Bessie.” He wanted to be a teacher.

  He started down that road by taking some college courses at the OU Lancaster campus. To make a little money along the way, he worked a part-time job filling in on a rural mail delivery route. But then he fell hard in love and decided the only way to salve that ache was to get married. He’d have to make a lot more money than he could working a couple of days a week carting mail across the countryside, but that wouldn’t be too tough a nut to crack. He’d just apply at Anchor. Lamb started in June 1962, packing ware at Plant 1. After a few months, he put his name on the bid sheet to go into the hot end.

  The hot end had its pecking orders and traditions, some of them codified by the union, some of them lore passed down from one generation to the next. Like everybody else, Lamb had to step on the rungs of the ladder in the proper order. He was a floor boy. He cleaned ware. He worked in the batch house, where raw materials were fed into the furnaces. He became a lehr attendant, watching the glass enter the long annealing tunnels, making sure the temperature was controlled. Finally, he was formally inducted into the apprenticeship program, and his union membership changed from an industrial local to a skilled local.

  He bought a little house on the west side and walked to work. As the weeks passed, he began to change, or the job changed, or both. Something. He wasn’t sure. He’d come to Anchor Hocking to make a living so he could get married, but he found that life in the plant wasn’t just a matter of doing your work and collecting a check.

  As a rookie, Lamb relied on the older, more experienced men. To them, the plant was a heaving being, its innards strung with cables and plumbing and wires, its machines sighing and churning, with silica and other minerals flowing in and glassware flowing out. The old boys had a feel for the place. They could diagnose a bad mold ring just by looking at a tumbler, mix batch by feel, gauge temperature without looking at a dial. By tapping that wisdom, Lamb could shorten his climb up the learning curve and pocket more money, too. The fewer rejected pieces a man made, the more bonus money he could collect. Always, it seemed, somebody was willing to lend a hand.

  The Flints looked out for one another. Layoffs came around not long after Lamb started, but layoffs didn’t necessarily mean any Flint was going to be laid off.

  “If we was working six days, you had to go down to five. Instead of the youngest guy, who needed the most, for family and stuff, getting laid off, we divided it. And that was good for the company and good for us. Our hours went on for vacations, our insurance kept tickin’.”

  As a newcomer, Lamb didn’t know the names of many of his coworkers, so, country boy that he was, he called everybody Laddy-Buck, as in “Hey, Laddy-Buck, can you help me with this mold?” Word got around, and then one day, Lamb walked into the break room, and everybody in there shouted, “Hey, Laddy-Buck!”

  The tears in his eyes when he told that story got him thinking about another one. Bill Nutter, a good ol’ boy who’d been working in Plant 1 since the 1930s, when it was still the Hockin’, was a west-side neighbor and a mentor who was smart as hell about making glass. Back when Nutter started, the company gave each man his own metal toolbox. He could have it custom-fabricated in the tool department at the plant. Nutter carried his pretty near every day of his working life. One day, he held it up to Lamb and said, “I want you to have this, Lambie.”

  “There’s a lot of guys that were nice to you and would help you,” Lamb said. “You gotta believe in empathy and reciprocity, you know? You should have that in life in general.”

  That Dick Ellwood would become a friend of Dale Lamb’s might seem unlikely if you knew nothing about Lancaster. Ellwood ended his career at Anchor Hocking as one of the four executive officers with a golden parachute and all that stock. Because of that, he became a controversial figure in town.

  But that was not how he started. Ellwood grew up swimming in the Tuscarawas River, because, unlike Lancaster, with its Miller Pool, the little town of Dover, Ohio, northeast of Columbus, didn’t have swimming pools. Ellwood’s father was a bricklayer. The family was so poor that, sixty years later, Ellwood could remember all the details of the day they moved from a four-dollar-a-month cottage to an eight-dollar-a-month cottage that had honest-to-God running water piped right into the house. To help fund the family, Ellwood became a bricklayer. He joined the bricklayers’ union. Hoisting bricks was hard work, but it helped build a body. Ellwood’s was squat and thick, a solid mass, his head a block with the defined angles of a mason’s square.

  Ellwood moved that strong body with scary speed across the high school football fields of Ohio, including Lancaster’s, where his Dover squad was always an unwelcome sight. Ellwood parlayed a star high school career into a starting spot for Ohio State, where he played in the 1950 Rose Bowl, an OSU victory over Cal, and the following season’s “Snow Bowl,” a game famous for its arctic conditions.

  After graduation, Ellwood served in the navy during the Korean War. He married and, after he mustered out of the navy, spent a few weeks enjoying civilian life back in Dover with his wife, Barbara. She let about thirty days go by before suggesting that, perhaps, he might like to look for a job. She reminded him of Lancaster.

  “She said, ‘What about that town down there, Lancaster?’” Ellwood told me one afternoon as we sat in the bar of the Lancaster Country Club. “‘They have that beautiful swimming pool, beautiful parks. You oughta go down there. Remember? They have a dish plant down there.’”

  Ellwood drove to Lancaster, parked by the Anchor Hocking headquarters at Broad and Main, and walked into the offices. A man who happened to work in personnel was on a ladder behind a secretary. Ellwood asked the secretary if they were hiring, not caring all that much whether they were or weren’t; he wanted to satisfy his wife.

  The man on the ladder turned around and said, “Hey! Are you Dick Ellwood?” Ellwood was easy to recognize. He still looked exactly like a central-casting football player, with his rugged, slightly flattened face, dark slashes for eyebrows, and that forward-leaning physique, as if he were still charging a quarterback—something the personnel guy had seen Ellwood do in Lancaster, in Ohio Stadium, and on the Rose Bowl TV broadcast.

  “What are you doing?” the man asked.

  “Looking for a job,” Ellwood answered.

  “Come with me,” the man replied. Ellwood never worked for another company.

  Throughout all the new job titles and pay raises, Ellwood remained Ellwood. He moved into a big house—practically an estate—out on BIS Road, with a horse stab
le, even, and people talked because it was a little showy and extravagant, a former poor boy’s dreamland. But he also spent a lot of evenings inside Old Bill Bailey’s with glassworkers. More than one person landed a job by drinking beer with Ellwood.

  He walked the plant floors. “I loved going to work at six in the morning and leaving at six at night, rolling through the plant every day, seeing all those people. Those people were amazing. Nice people.”

  The union and Ellwood had fist-pounding fights at contract time, but they spoke each other’s languages. “Dale Lamb, hell, we were friends. We had some problems, you know. He knew his job and I knew my job. Those other guys who were tough, tough labor guys? Shit, I got along with ’em.”

  After Icahn, though, he stopped understanding what it was Anchor Hocking was doing. It seemed to him that getting a mention in the Wall Street Journal had become more important than making and selling glass. He claimed Topper controlled the board and kept decisions within a tight circle with a couple of others, neither of whom was Ellwood.

  Some believed Ellwood sold out the workers—and the town—by closing Plant 2 and taking the pillowy payday at the Newell sale. He insisted that the Clarksburg plant, the Ohio EPA, the lower labor costs in West Virginia had nothing to do with Plant 2 coming down. The decision to shutter it, he told me, was the hardest day of his life. “The eight or nine hundred people working out there? Their kids went to school with my kids. We knew everybody. Everybody.” As for the Newell sale, Ellwood claimed he wasn’t consulted, had little say, and so kept his mouth shut.

  After the Newell sale was approved, Ferguson asked Ellwood to lunch. They sat at the same table where we sat. Ferguson asked Ellwood to stay. “I wanted no part of it,” Ellwood told me. Ferguson, he said, was “a jerk-ass.”

  Topper left town for Florida. Ellwood stayed.

  Though he had been retired for nearly thirty years, he remained haunted by an elegiac shadow. Some evenings he’d wander into the Pink Cricket, order a beer, and talk to an old waitress who, like many in Lancaster, worked two jobs, her other one in the Anchor sluer. She’d been there for decades. She’d fill Ellwood in on what tanks were down and how many feeders were running inside Plant 1. Good news was rare. Everybody who still worked at Anchor, like Brian Gossett, was on edge.

  The day after our conversation, Ellwood went to a funeral. He attended a lot of funerals—every funeral of every Anchor Hocking employee who worked for the company during the years he did. “I go to all of them,” he said. “I just feel like these people represented Anchor Hocking, and I am the last representative they’ve got that they know. I’m the last.”

  During the 1980s storm of deal making, critics like Felix Rohatyn, an investment banker with Lazard Frères & Company (and, later, U.S. ambassador to France), Harvard University business and social policy professor Robert Reich (secretary of labor in Bill Clinton’s administration), Yale economics professor and Nobelist James Tobin, and others warned against the long-term effects of the frenzy of financial engineering, executive self-interest, and greenmail, but they were screaming into a Friedmanesque typhoon.

  A. Bartlett Giamatti, then president of Yale and later the commissioner of baseball, worried about something more ineffable than what was good or bad for a company’s future. People, he said, might become disillusioned about “the idea of institutional loyalty.” An institution, whether it’s a political body, a corporation, a school, or a club, is a “means for translating private impulse to the public good.” Without a sense of that purpose, people might feel cut adrift until “the impulse to private gain has nothing to connect itself to except itself.”

  FOUR

  Newellization

  March 2004

  Some civic leaders argued that the Newell takeover benefited Lancaster. The paper editorialized that the town should welcome the newcomer with open arms and make the arriving team feel like Lancaster was their home, too. Even the unions said at first that they were pleased with Newell. But the enthusiasm felt forced, based more on relief than on real optimism. Coming after the intense uncertainty and resentment that had haunted the company and the town since Icahn, Lancaster clung to any island of stability.

  And there was optimism within the company itself. “Newellization” introduced a few needed modern efficiencies and systems that Anchor Hocking had neglected—like data and accounting techniques, order tracking, customer service methods. Profit as a percentage of revenue rose. Newell also tried smoothing relations with the unions that had been left embittered by Topper. It held regular “burgers on the bricks” events, during which salaried staff cooked hamburgers at the plant for the hourly workers.

  On the other hand, Newell infused Anchor Hocking with some of the “brutality” that Peter Roane said had been missing in the old management. It eliminated the apprenticeship program, in which raw talent from the community would be turned into skilled, specialist experts. Newell was laser-focused on bottom-line performance. Nobody got hired at Old Bill Bailey’s anymore, and if you failed to hit targets, nobody hunted for a position in which you could find “your level of competence.” You were fired.

  “They told us that, going forward, we’d never be any more responsible or any more accountable for what we did and our actions than from this day,” recalled Mike Shook, who led a product design and development team. Shook liked that.

  But not everybody did. Newell fired a lot of people throughout the operation, not just in the headquarters building.

  “Newell was bad people,” Dale Lamb said. “Bad people.”

  This was certainly the view of Vermont American. At the same time Daniel Ferguson was pursuing Anchor Hocking, he was also chasing Vermont American, a Louisville, Kentucky–based tool company. Vermont American was public, but closely held by members of two families. It had always been run very much like a family business, with a conservative, long-term view. It grew by investing profits in new products, marketing, and quality, not by making acquisitions. Lee Thomas, the chairman of the board, preferred decision-making by the Quaker principles of “consensus and compromise.” The strategy worked. Vermont American had a long record of profitable growth.

  Using tactics Thomas and other officers of Vermont American found deceptive, Newell began acquiring stock, just as it had with Anchor. And just as he had at Anchor, Ferguson at first denied having any desire to take over the company. But Vermont American had learned a lesson from Anchor’s experience.

  “At times Newell had acquired public corporations at bargain prices through ‘creeping acquisitions’ and two-tier tender offers,” Vermont American told a Delaware court. “This was true, for example, in Newell’s acquisition of Anchor Hocking Corporation in 1986. There Newell accumulated the company’s stock and eventually acquired complete equity control of Anchor Hocking. In order to generate increased profitability Newell at times would follow its acquisitions by asset-stripping, plant closures and layoffs.”

  After a long battle, Vermont American escaped Ferguson’s uninvited embrace by selling itself to a consortium of Emerson Electric and the German company Bosch. Newell walked away with a $26 million profit on the sale of its Vermont American shares.

  Lamb’s opinion hardened in 1992, when Newell tried to increase the amount those who had already retired would have to pay for health insurance premiums. “They was gonna triple it or quadruple it,” he recalled.

  The Flint rank and file seemed reluctant to invite conflict over the issue. According to Lamb, that was because Newell “was in bed with some of the union guys.” Newell, Lamb charged, would co-opt a union officer by having him appointed as a shop lead, which paid more per hour. The officer, in turn, wouldn’t challenge the company or rouse his members to action, for fear of losing his new position and extra pay. So Lamb mounted a campaign.

  First, he put some old retirees on a picket line and had them walk in front of the distribution center and Plant 1. Then, as contract negotiations dragged on at the old Holiday Inn on 33, Lamb hired a ragtime piano
player to beat out militant march songs and called workers to come over to the motel’s lounge.

  “They started comin’ in, and she’s pounding that baby like, man! The place was packed. Standing room. The old guys was all there; we had four policemen just in case. They knew what might happen.”

  Lamb explained the issue, saying the union had the right to strike to protect the benefits of the retirees. Some younger workers resisted: “‘Why do you care about them? They’re gone.’”

  Lamb couldn’t believe his ears. This wasn’t the union he thought he knew. Perhaps the Flints had been beaten down since the 1980s. Maybe they considered themselves so lucky to have a job at all, when the news was filled with disappearing union work, that they preferred not to endanger the status quo. Lamb’s theory was that too many of them had bought boats and motorcycles, lived a little high—often on credit—with no stomach for sacrifice.

  “‘Well, they made it what we are!’” he exclaimed of the old retirees who had fought for better pay and working conditions, suffering through a long strike in the 1960s, for example. “‘If we do it to them, what [is the company] gonna do to us? That’s not the way life is! You know that’s not the way it is! He died for us on the cross!’”

  His tactics worked. The union issued an ultimatum to management: Roll back the retiree premium hikes and slightly boost current-worker retiree benefits or the Flints would walk. In response, Newell preemptively shut the plant down, bringing in security guards dressed like storm troopers.

  Joe Boyer walked a picket line, even though he’d been in Plant 1 for only two years. Boyer had worked at an auto parts store and as an auto mechanic before that, but when he realized working on cars was never going to get him out of his parents’ house on Mulberry Street, just a few blocks from where I. J. Collins and Bill Fisher had lived, he talked to a neighbor who worked in the furnace room at Anchor. Boyer’s father had worked at Anchor, making a decent living there, and now Boyer thought maybe he should, too.