Chemist built an industry giant in quick-drying paints, resins, and adhesives.
Henry Helmuth Reichhold (1901-1989)
It was Sunday in Vienna, and the guard at Reichhold Chemie AG could hardly believe his eyes. There, poking among the workstations, vats, and reactors on the factory floor, was a huge man with thinning white hair, wearing wrinkled trousers and a ratty blue cardigan. The guard quickly made his way over to the man and demanded curtly in German, “Who are you, and what are you doing here?”
The large man seemed unconcerned and answered, “My name is Henry Reichhold, and I own this factory.”
Despite his rustic appearance, Henry Reichhold held, at the time of his run-in with the plant guard, the distinction of having had the longest tenure as chief executive officer of any Fortune 500 company in the United States. He had been at the helm of Reichhold Chemicals Inc. (RCI) for 54 years, and had built it into a diversified, publicly owned, international chemical concern with factories in 23 states and operations in 24 countries around the globe, with sales approaching $1 billion annually. RCI manufactured and sold products that formed the underpinnings of our modern lifestyle: synthetic coating and polymer resins for automobile and house paints; polyester resins and initiators for boats, swimming pools, and sinks; adhesives for bookbinding, business forms, and cartons.
Beginnings: Vienna to Detroit
The ubiquitousness of RCI’s products is a good metaphor for the way Henry Reichhold operated. He was known for his restless energy, his obsession with business, and his compulsive desire to be everywhere at once. Whenever you met Henry, he was on his way somewhere . . . else.
This energy came from having to prove himself at an early age. He was born the youngest of seven children—four boys and three girls—in Grunewald, an upper-middle-class suburb of Berlin, on July 31, 1901. His father, Carl Reichhold, was a well-known figure in the European chemical industry, especially in surface coatings, and was a principal in the Viennese firm of Beck, Koller & Company. The firm had prospered and set up offices in London, Berlin, and Hamburg, and counted all the royal households of Europe among its customers for coach varnishes.
Each Reichhold son joined the firm. Henry started in the laboratories at age 14 and showed an affinity for chemistry. However, whether due to wanderlust or the difficulty of competing with his brothers for the patrimonial share, he decided to emigrate to the United States in 1924, after completing his studies at the University of Berlin and the University of Vienna. He arrived at the gates of the Ford Motor Company in Detroit at age 23, speaking a few phrases of English, and landed a job for $4.80 a day as an assistant in the paint department. Within a year, he had been promoted to the department’s technical head. But he had a bigger game in mind than working for Ford. “I started right away thinking about when I could start my own business,” he said in a 1981 interview.
Ford Coup
The big break in Henry’s life was called “phenolic resin.”
Automobile finishes at the time were called “coach-and-carriage” finishes and used natural gums and resins. The long drying times of these natural resins created a major production bottleneck and posed an obstacle to mass production. In the winter of 1925, Henry heard from his brother Otto that Beck, Koller & Company had developed a heat-hardening and oil-soluble phenolic resin whose properties reduced the drying time of surface coatings from days to hours.
Quickly realizing the potential for this breakthrough in the U.S. auto industry, Henry had Otto ship him twenty 100-pound bags of the phenolic resin. He named it “Beckacite,” set up shop in the garage of his friend and soon-to-be employee, paint salesman Charlie O’Connor, and went into business for himself while continuing to work at Ford part-time. By 1927, he had gone completely on his own, quitting Ford when they refused to give him a 40-cents-a-day raise. With a $10,000 loan from his father, Henry bought a 4,000-square-foot paint and varnish factory in the Detroit suburb of Ferndale and became the American manufacturer of Beckacite.
Charlie O’Connor, whom Henry hired as his first salesman, recalled the early days: “Of the two of us, Henry was the visionary, the dreamer. But it’s doubtful that even he could have visualized the Reichhold Chemicals of today emerging from such humble beginnings.”
Henry Ford, who refused to buy paint from Dupont because they were a supplier to General Motors, became Henry’s principal client, not only launching Henry’s company but changing automotive history. Henry could claim credit for helping Ford realize his dreams of mass production with quick-drying paints and for convincing Ford that the American public deserved cars in more colors than black. In 1926, the Model T was offered in blue, gray, and brown. In 1927, maroon and green were added. A revolution in production and fashion was underway.
A Chemical A&P
At age 26, Henry was on his way as the head of his own company, which he initially called Beck, Koller & Company after his father’s firm. He quickly developed the strategy that would build his company into an industry giant. During the Depression, Reichhold established research laboratories to explore the potential of phenols and other chemicals as raw materials for synthetic resins. He tied formulators to his full line by becoming a single source for their requirements. He kept prices low by first improving processes, then by expanding production, followed by sales efforts to maintain the volume at modest profit.
He compared his method to that of A&P, at the time, the largest supermarket chain in the country: “No one gets excited when a business like the A&P operates on a 1 percent return basis with the aim of doing mass-scale business. That is our aim, too: to go into really big commodity selling on the basis of lower prices . . . it is simply a matter of being satisfied with a lower margin of profit, of passing along savings in costs to customers.”
To secure his own position as a resin supplier and to make sure he could keep up with demand, he began manufacturing his own chemicals. He also began placing plants near the markets he wanted to serve to ensure quick and efficient distribution.
By 1938, sales had reached $3.2 million, and Henry Reichhold changed the name of the company from Beck, Koller & Company to Reichhold Chemicals Incorporated.
Not All Business
Like many self-made men, Henry was not much of a family man. Working 12 to 15 hours a day, seven days a week, left little time for a private life. Henry did marry twice. He married Ilsa Brewer in the late 1920s, and they had one daughter, Ingrid, in 1931. And in 1954, he married Sabina, and they had three daughters, Barbara, Katherine, and Susan.
His daughter Ingrid remembered him as a warm-hearted, strong-willed father with a wonderful sense of humor, who loved to play tennis and the violin. Her childhood was spent in an affluent suburb of Detroit, where the Reichhold lifestyle was more than comfortable but never lavish. While Henry believed in making money, he also believed in being personally frugal, and that if you were lucky enough to make a lot of money, you should give much of it back to society.
In 1942, with his company prospering, Henry combined his love for music with philanthropy by leading the revival of the Detroit Symphony Orchestra, which had fallen on hard times and disbanded. He became one of its big benefactors. By the end of the 1944-45 season, the symphony had regained firm financial footing, and critics were giving it accolades.
The Family Business
Since business kept him away from his family, Henry channeled most of his paternal energies into his company. He ran it with a firm but unorthodox hand, calling all of his managers by their first names. Former employees described him as a man who gave his loyalty to his employees and inspired fierce loyalty in return. Perhaps because of his early independence and his thwarted desire for a son, Reichhold took great pride in being a father figure to his executives, hiring them when they were young, treating them like sons, and personally nurturing their careers. Stories like that of John Gaither, vice president of the Coating Polymers and Resins Division, are common: “Henry was like a father to me . . . he gave me my first job and pushed me up through the ranks.”
In return, Henry was always demanding, expecting his executives to travel with him at a moment’s notice, dropping in on them unexpectedly (including staying at their houses), and calling them at all hours and during their vacations. Homer Dunnmon, former director of manufacturing, recalled that to really take a vacation, “you had to leave the country,” at least, whatever country Henry Reichhold was in at the time, otherwise “he would find you and start asking questions about your operations.”
Dunnmon said this personal feeling and loyalty between Henry and his employees built the company. The war and post-war years were bountiful for RCI. As the world demanded more and more products to satisfy construction and growth, RCI grew to meet the demand. By 1981, its sales were nearly $1 billion, and it boasted a Fortune 500 ranking. Following a strategy of bringing its facilities to the market, RCI built 30 plants across the United States and in 24 countries.
The Global Grocery
Paradoxically, but typical for Henry Reichhold, RCI maintained a reputation for familial intimacy, even as it grew into an international giant. A Harvard Business School graduate sent by the Navy during WWII years to study RCI as an example of American business practices, reported to his superiors that “everything I have learned here deviates from the accepted business procedures I was taught at Harvard. RCI operates like a small grocery store—but on a big scale.”
The personal touch extended to Henry’s business dealings, too. He promised all customers he would “send to your plant, to assist in the solution of formulative problems, any member of our technical staff, and with sufficient time at his disposal to remain on the job until it is completed, whether it takes an hour, a day, or a week.”
All this personal attention meant a lot of traveling—something for which Henry Reichhold was legendary. He often logged as many as 11,000 air miles a month in the United States and abroad, keeping an eye on his operations.
Where His Heart Lived
While Henry had adopted the United States as his home, his heart was never far from Europe. As he grew older, he spent more time there, visiting an average of once a quarter for several weeks, watching over his European operations and visiting his family. (His second wife, Sabina, lived in Hamburg, and their daughters grew up in Europe.)
In the summer of 1966, Henry purchased Castle Feistritz am Wechsel about 80 kilometers south of Vienna, a castle of considerable historical importance, with parts of it dating back to the 10th century. The castle withstood attacks from Turkish invaders in the 15th century but had fallen into disrepair. Henry had it restored into a showplace, using it as his Vienna home.
Money and Responsibility
Because Henry Reichhold believed in giving back to society, he continued the philanthropic activities he started with the Detroit Symphony. He contributed $1 million to build a cultural center for the Berlin Academy of Arts. Dedicated in 1960, it was called a “dream house of the arts,” with exhibition buildings, concert halls, experimental theater, and interior courts for small concerts. With 250,000 shares of RCI stock, he set up the Henry Reichhold Foundation through which he contributed generously to other causes. After he bought Bluebeard’s Castle Hotel in the Virgin Islands, he became involved in a number of civic projects there. He contributed to the founding of the College of the Virgin Islands and to the construction of its cultural Center for the Arts, and he became an original member of the college’s Board of Overseers. In 1976, the Intra-Science Research Foundation of Los Angeles conferred on him its Louis Pasteur Humanitarian Award for his “personal commitment to science and progress and their application to the improved quality of living.” And in 1979, the legislature of the Virgin Islands passed a special resolution awarding him the Virgin Islands Medal of Honor in recognition of his gifts to the College of the Virgin Islands.
Call It Retirement
In 1987, RCI was bought by Dainippon Ink & Chemicals—now known as DIC Corporation—a Japanese chemical giant led by Katsumi Kawamura, a long-time business associate of Henry’s. Henry approved of the Japanese policy of long-term growth versus concerns with short-term gains (typical of American business) and the Japanese corporate culture’s stress on loyalty and seniority—two qualities he had instilled in RCI.
By then, Henry was a “retiree.” He had stepped down in 1982, at age 81. Until his last year, Henry was keeping a busy schedule of eight-hour days at the office and four trips a year to Europe to oversee operations. He continued as a consultant to the company and a board member until 1985. He also spent time managing his sizable private investments, including a cedar mill in Newport News, Virginia, that he ran with fellow “retiree” Dunnmon. “Business was his whole life,” Dunnmon recalled, “so he was completely lost when he retired. He wasn’t just going to sit around, so he bought a mill!”
Plagued by failing health, however—arthritis and congestive heart failure—Henry Reichhold cut down on his activities in the late 1980s. He died at his Armonk, New York, home on December 11, 1989, at age 88.
Back in July 1966, business associates and friends had marked Henry’s 65th birthday and the 40th anniversary of RCI by creating the Henry H. Reichhold Scholarship Fund to provide scholarships and other educational assistance for children of RCI employees. Since that time, grants from this fund have helped hundreds of young people attend college and work toward fulfilling their dreams.