Although no country in the world has a gold standard, gold is still needed for the economy, especially now in the middle of the pandemic.
Robert E. Mercer took Goodyear — and Akron — to war.
Mercer, Goodyear’s chairman and chief executive from 1983 to 1989, led the company in its desperate fight against corporate raider Sir James Goldsmith, the billionaire multinational financier who shocked the community with his attempt to buy the company and break it up.
Mercer by default became the general over a team of executives and others in what became the Goodyear War, a 10-week battle in 1986 to retain the identity and substance of not just Goodyear but in many ways also of Akron. Goodyear then was the city’s largest employer and rubber, while on the wane, still ran through Akron’s veins. The aftermath in many ways reshaped the city.
Mercer, a World War II veteran who worked at Goodyear for 42 years, died on Friday. He was 96 years old.
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The 1986 war of substance was also a war of words, and Mercer and his lieutenants chose their words carefully and passionately in rallying and uniting people and institutions to the cause against outsider Goldsmith.
“He wanted to buy it, break it up and sell it off. That’s where the money was,” Mercer recalled in 2011, 25 years later.
As the war began, Mercer met with Goldsmith, who by then was the company’s largest shareholder with 11.5% of Goodyear shares, to size him up.
Mercer referred to Goldsmith as “Goldy” and “Jimmy” and said the raider was “damn good at what he did. The guy was a perfectly charming, bright guy.”
The attempted takeover of Goodyear, then the nation’s 34th largest corporation, was dramatic, Mercer recalled. A hearing, hostile to Goldsmith, before a House of Representatives subcommittee in Washington, D.C., proved to be a key turning point.
“I tried to tell him [Goldsmith] that he was not just fooling with another company, another takeover target,” Mercer said in “Wheels of Fortune,” the Beacon Journal book on the history of the city’s rubber and tire industry. “We’ve got 132,000 employees who want to see you go home. You bring nothing to the party.”
Mercer, Goodyear and Akron prevailed against Goldsmith.
Rick Reiff, part of a Pulitzer Prize-winning team of Beacon Journal reporters covering the attempted takeover, recalled speaking with Mercer the night the company agreed to pay “greenmail” to be rid of Goldsmith.
Reiff said when they talked it was obviously the end of a long ordeal for the CEO.
Mercer wanted to speak freely and let the Akron community share in the news, he said. One detail Mercer disclosed was that Goldsmith could not find the Goodyear stock certificates he owned when it came time to close the deal, Reiff said.
“It was very candid. It was honest,” said Reiff, who recently retired as editor of the Orange County [California] Business Journal.
Mercer “was a dyed in the wool Goodyear guy,” Reiff said. “They don’t make CEOs like that any more. Or very few. He was a Goodyear lifer.”
Doug Oplinger, also part of the Beacon Journal’s coverage of the takeover and the paper’s retired managing editor, recalled Mercer talking about using his mechanical engineering background when he was a young Goodyear salesman. A client, Maytag, was having problems with a washing machine model. Apparently a tiny pulley that used a Goodyear belt wasn’t working properly. Mercer took a look and realized the pulley system required a notched, not smooth, belt.
“He designed it and saved the day for Goodyear and for Maytag,” Oplinger said. “He took great pride in being an engineer who understood sales.”
The greenmail Goodyear paid to Goldsmith came at a high price, not counting the tens of millions of dollars the raider received to walk away. Mercer, who spent much of his time and energy to diversify Goodyear from slow-growth tires into areas such as oil and gas production and a $1 billion oil pipeline, was forced to spin off significant parts of the company to pay for the fight, which had saddled Goodyear with billions of dollars in debt.
And where a top goal had been to create a more diversified corporation, Goodyear was forced to refocus on its core, tire making — something that Goldsmith had said the company needed to do. Goodyear Aerospace went to Loral Corp. for $588 million, and the Motor Wheel division was sold for $175 million to Lemmerz. Other non-tire subsidiaries were also sold off. Goodyear eventually sold the Celeron oil and gas business to a Texas company in 1998 for $420 million.
Under Mercer, Goodyear introduced its first run-flat tire and also radial racing tires that debuted at the 1987 Indianapolis 500.
Mercer became a critic of Wall Street’s takeover culture, calling a proliferation of hostile takeovers and U.S. securities laws that allowed them “an obscenity.”
He took part in an “Ethics in America” panel discussion, part of the Fred Friendly Seminars series on PBS, in 1988, where he decried takeover culture.
“It’s a one-time hit, where we get a spike in the share price and we cash out a corporation instead of operating it as a viable operation sometime in the future,” Mercer said. “We have to have a plan that means the corporate will survive, will become more competitive, will increase jobs and enhance value over a period of time and not just a one-shot price.”
Mercer in “Wheels of Fortune” said he never bought the idea that the shareholder is the owner of a company.
“They own a piece of paper with the company’s name on it, and they’ll get rid of that paper at the drop of an eighth of a point in the stock price,” he said. “Our employees, whether union or otherwise, have a wife or husband and kids and years invested in the company, and they’re looking at investing more years. First and foremost, you have an obligation to your customers. But you have to do the right thing by your employees.”
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Mercer was born in Elizabeth, New Jersey, the son of the late Margaret and George Mercer. His father was a Ford dealer and police commissioner in Roselle Park, New Jersey, a New York City suburb.
He had a twin brother, Richard, and older brother Donald, both of whom had successful careers in advertising and broadcasting.
Mercer won a baseball scholarship to Ohio University but left after one semester when the U.S. entered World War II and he and his twin were drafted into the Navy. Mercer attended officer candidate school at Yale University and received an officer’s commission, and served on the USS Cleveland. He graduated from Yale in 1946 with a degree in mechanical engineering.
He is survived by his wife, Mary (Deuel); they married in 1947. That same year he joined Goodyear as a sales trainee, selling conveyor belt and industrial hose in the company’s Duluth, Minnesota, territory that included Michigan’s Upper Peninsula.
He was promoted throughout his years at Goodyear and was named company president in 1978, chief operating officer in 1980 and then chairman and CEO in 1983, succeeding Charles Pilliod. He retired as CEO at age 65, with Tom Barrett taking over the top position.
“It is not an exaggeration to say that the Goodyear of today would not exist without Bob Mercer,” said Rich Kramer, Goodyear chairman, president and chief executive officer.
“As our CEO during the attempted takeover of the company in 1986, Bob stood firm in his commitment to our associates, to the company, to our customers and to the city of Akron. He not only saved the company from an uncertain fate but used the experience to reposition us for growth in the future. Bob added to the legacy of a great American company and planted the seeds for the Goodyear of the future. Everyone in the Goodyear family owes Bob Mercer a debt of gratitude and appreciation.”
Mercer served on the board of directors of General Electric, CPC International, Manufacturers Hanover Trust, and was chairman of Roadway Express Inc.
He was head of the U.S. Better Business Bureau and led the national fundraising U.S. Savings Bond campaign.
He was a visiting lecturer on corporate ethics at The Wharton School at the University of Pennsylvania. The University of Akron established a four-year Goodyear Global Scholarship in his name.
He was the 1991 recipient of the Polsky Humanitarian Award, given to individuals for outstanding social service to the Akron community.
During retirement, Mercer spent time in homes in Nantucket, Massachusetts, and Palm Coast, Florida. He was a boating and deep-sea fishing enthusiast and regularly competed in the Nantucket Anglers Club Annual Billfish Tournament.
He was also known for his sense of humor and one-liners, family said.
Besides his wife, Mary, he is survived by five children: Kathleen Bond of Shaker Heights; Robert G. of Santa Monica, California; Maryann John of Richmond, Virginia; Donald of Wichita, Kansas; and John of Akron; 10 grandchildren; and 4 great-grandchildren.
The family asks that in lieu of flowers, donations may be made to Summit Metro Parks Foundation. The family also said it thanks First Light, Golden Years Helping Hands and Kindred Hospice for their care and support.
Arrangements will be announced.
Jim Mackinnon covers business. He can be reached at 330-996-3544 or email@example.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ.
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