CORPORATIONS: Sharp as a Razor

It was a big week for Gillette. First, the razor blade company launched a $1,000,000 campaign to plug its new bright blue plastic container for 20 blades (98¢). Next day, the board of directors declared an extra dividend of 50¢ a share, raising 1947 dividends to $2.87½ a share, highest in the company’s history. The following day, Gillette’s 3,457 employees got an extra week’s pay as a bonus for record production.

That evening, company foremen were guests at a champagne-confetti blowout at Boston’s Copley-Plaza Hotel, heard a short pep talk: “You’ve done a damn good job, guys,” said President Joseph P. Spang Jr., “but in the same breath I want to say we’re still behind on our orders. We want to get that old man’s face in every store in the world.”

Blades for Bottle Caps. The old man, the late King C. Gillette, whose mustachioed countenance is one of the company’s trademarks, was once a bottle-cap salesman. While shaving one day in 1895, he tried to think of some invention as indispensable, disposable, and cheap as a bottle cap. Result: the first idea for a safety razor with a throw-away blade.

It was 1904 before he got enough money and machinery to put the safety into production. Since then the company has never lost any money, never failed to pay a dividend. But competition and the depression of the ’30s sent the directors on a man hunt for someone to better the company’s “disappointing” results. Spang was chosen.

A Bostonian and a graduate of Harvard, where he made freshman letters in football, and track, Joe Spang, now 54, got his start shaving hogs for Swift & Co. He was Swift’s vice president in charge of sales when Gillette hired him away in 1938 at $45,000 a year (present salary: $100,000).

Blades for Strawberries. Gillette’s new President Spang was a real salesman, all right. Under Spang, Gillette tied up the radio rights on most big sports events, was thus able to talk (“Look Sharp! Feel Sharp! Be Sharp!”) to a shaving audience. Spang dropped the company’s electric shaver because it competed with the more profitable blade business, added shaving cream to the line of products, followed up advertising with hard-hitting merchandising. Gillette’s net income increased from $2,941,890 in 1938 to $10,501,448 last year. This year the company’s main plant in South Boston is still working the wartime three shifts a day.

Gillette’s seven foreign plants (Berlin, London, Buenos Aires, Paris, Zurich, Montreal and Rio de Janeiro) are also working at capacity. In foreign trade, Spang had gotten around the lack of dollars and other currency troubles by a system of “compensation trading.” Thus, Swiss-made blades are being exchanged in Italy for tomatoes, asparagus, and strawberries, in Austria for wood, in Czechoslovakia for glass. The goods are then sold in Switzerland for francs and the francs exchanged for U.S. dollars to buy raw materials for Gillette’s foreign factories.

“So what if we can’t get our profits out,” says Spang, an enthusiastic foreign trader. “We’ll get them eventually. We’re not in business for five years or just ten years or even 50 years. We’re in business from now on—indefinitely.”