The Team Takes Shape

The Kid from Shanghai

W. (for Werner) Michael Blumenthal, 50, fits the Carter specifications for Cabinet officers with almost ball-bearing precision. He is a topnotch businessman with a concern for social causes. He is a Democrat but not a big spender. He favors some national economic planning but not the amount called for by the Humphrey-Hawkins full-employment bill. He is praised by labor leaders and businessmen alike. Says Douglas Fraser, a vice president of the United Auto Workers: "He is a very enlightened industrialist. His social values are solid, and he practices them."

Blumenthal's formative years were spent in Nazi Germany and then Imperial Japan. His parents were nonpracticing Jews, while he is a baptized Presbyterian. His father, who owned a women's clothing shop, was hauled off to Buchenwald in 1938 and was released only after the four-member family, including Sister Stephanie, agreed to leave the country. They booked passage to Shanghai. In his teens, Blumenthal became a streetwise Shanghai kid, but when the Japanese occupied the city, he and his family were herded into a compound, where inmates suffered disease and starvation. Blumenthal emerged from the confinement with a voracious appetite to make his way in the world.

When the American fleet arrived at the end of the war, Blumenthal hired a sampan and sailed out to greet the ships. He received a U.S. visa in 1947 and settled in San Francisco. He recalls: "I had no commitments, no obligations, no money -nothing but opportunity." He made the most of it. To put himself through the University of California at Berkeley, he worked as a janitor, a movie ticket taker, a stagehand, a casino shill. After graduation, he enrolled in the Woodrow Wilson School of Public and International Affairs at Princeton. Within five years, he earned three degrees, including a Ph.D. in economics.

Blumenthal taught at Princeton for three years, but scholarship was too tame for his combative temperament. He took a job as vice president of Crown Cork International, a bottle-cap manufacturer. In 1961, he secured an appointment as Deputy Assistant Secretary of State for Economic Affairs. When the Kennedy Round of negotiations for tariff reductions got under way, Blumenthal was made chairman of the U.S. delegation. Instructions to be tough were superfluous; that was his natural style.

No Bribes. When a tariff agreement was finally reached in 1967. Blumenthal decided to return to private industry. The New Frontier was over, and he was unhappy with the U.S. escalation in Viet Nam. He also got an offer that was almost impossible to refuse: the presidency of Bendix International, a wholly owned subsidiary of the Bendix Corp., a conglomerate turning out products ranging from automobile parts to electronic equipment to mobile homes. Blumenthal was so successful that he was promoted to president of the parent company in Southfield. Mich., four years later. In 1972, he became chairman. Last December. Dun's Review named Bendix one of the five best-managed companies in the U.S.* Since Blumenthal took command, earnings have almost doubled, to $3 billion, and earnings per share have increased at a compound annual rate of 21.7%. Says he: "Nothing works if you don't make money." But he also issued orders to Bendix executives not to offer bribes or engage in any other illegal transactions overseas. "This policy has not hurt us a bit."

Blumenthal's energies overflow into other concerns: foreign policy, international trade, Princeton and tennis, which he plays -more strenuously than smoothly -almost every morning at 6:30. Sometimes considered private industry's counterpart to Henry Kissinger, Blumenthal can converse in several languages with just a hint of a German accent. More than many harried executives, he sets time aside for his family: his wife Eileen, a Ph.D. in education, and their three children are currently in college. The shift to Washington will cost Blumenthal from $500,000 to $1 million a year in lost salary and benefits. He owns at least $700,000 in Bendix stock, but he has not yet decided how to dispose of it to avoid conflict-of-interest problems. Whatever the cost may be, Blumenthal considers the move a step up.

* Introducing Blumenthal at his press conference, Jimmy Carter mistakenly called Bendix one of the five largest corporations in the country. According to the most recent listing by FORTUNE. Bendix is No. 70.

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