The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [162]
A month or so later, Stanley Rubin had to be called into service to persuade Chace not to take a job at a competing textile mill. Meanwhile, Buffett was scrambling to buy more stock, including shares that belonged to various members of the Chace family.
Buffett’s final target was Otis Stanton, who wanted his brother to retire. He had no confidence in Seabury’s son, Jack, and doubted Seabury would ever let go of the reins.
Otis and his wife, Mary, agreed to meet Buffett at the Wamsutta Club in New Bedford.38 Over lunch at the graceful Italianate mansion, a relic of New Bedford’s onetime grandeur, Otis acknowledged that he would sell, on the condition that Buffett make an equivalent offer to Seabury. Warren agreed. Then Mary Stanton asked if they could keep just a couple of shares out of the two thousand they were selling, out of family sentiment. Just a couple of shares.
Buffett said no. It was all or nothing.39
Otis Stanton’s two thousand shares pushed Warren’s ownership to forty-nine percent of Berkshire Hathaway—enough to give him effective control. With the prize within his grasp, he met Ken Chace one April afternoon in New York and walked him out to the teeming plaza at Fifth Avenue and Central Park South, where he sprang for two bars of ice cream on a stick. Within a bite or two he got to the point, saying, “Ken, I’d like to have you become president of Berkshire Hathaway. How do you feel about that?” Now that he controlled the company, he said, he could change the management at the next directors’ meeting.40 Chace, who was stunned to be selected despite the hints Rubin had given him when he convinced him not to take another job, agreed to keep quiet until the board meeting.
Not realizing that his fate had been decided, Jack Stanton and his wife raced down from New Bedford to meet Warren and Susie at the Plaza Hotel for breakfast. Kitty Stanton, more aggressive than her husband, pled Jack’s case. Reaching for an argument that would appeal to the Buffetts, Kitty threw in what she must have thought was the clincher. Buffett surely would not overturn New England’s hereditary mill aristocracy, who had overseen the business for generations, to put a mill rat like Ken Chace in charge. She and Jack fit in at the Wamsutta Club. Kitty, after all, was a Junior Leaguer, like Susie.41
“She was a nice enough person. But I also got the impression that she felt Jack was entitled to it because of his dad. Part of her appeal was that Ken Chace really wasn’t in the same class as Jack Stanton and she and Susie and I were.”
Poor Kitty, making this pitch to a man who so disdained hierarchy that he had refused to join Ak-Sar-Ben and thumbed his nose at the establishment of Omaha.
It was too late for Jack. It was too late for Seabury, who ruled by autocracy and had no friends on the board. Even his own chairman, Malcolm Chace, did not like him. Thus, when backers of Buffett arranged for him to be nominated to the board at a special meeting, on April 14, 1965, he was swiftly elected a director with much of the board’s support.42
A few weeks later, Buffett flew into New Bedford, where he was greeted by a headline in the New Bedford Standard-Times about “outside interests” taking over the company.43 The planted story infuriated him. The one lesson that had stuck with him from Dempster was to never, ever let himself be branded a liquidator—and wind up with a whole town hating him. Buffett vowed to the press that he would carry on business as usual. He denied that mill closings would result from the takeover—and saddled himself publicly with this commitment.
On May 10, 1965, the board convened at Berkshire’s headquarters in New Bedford. It presented a silver tray to the retiring vice president of sales, approved the minutes of the last meeting, and agreed to increase wages five percent. Then the