Looking for Longer Horizons

By Marshall Loeb

Executive View

His name is up in lights over the company that he heads, and nobody has held the title of chief of a big U.S. firm longer than he. Since 1945, J. Peter Grace has been boss of W.R. Grace & Co., the $5 billion-a-year conglomerate that was founded by his grandfather. Rather daringly, he has taken it completely out of Latin American shipping, airlines and banking, where it once prospered. He has steered it into chemicals, retailing, energy and restaurants, mostly in the U.S. and Western Europe. He is 66, and he will not slow down or let go. What drives Peter Grace? What is this most senior U.S. executive really thinking?

I'll tell you what I'm thinking. When I was in school in the 1930s, I wanted to make the hockey team. I went out in the moonlight and practiced hockey. Another boy, he'd shoot at me. Well, I made it, babe, but I was out night after night after night, practicing. It's the same way in business. Only something that you start working on today will pay off in five or ten years.

When I got out of the Navy in 1942, I worked with a Chilean economist, Raul Simon. Smartest man I've ever met. He used to tell me what was going to happen in Latin America. He'd say: "The population is increasing 2% to 3% a year. These people are all going to crowd into the cities, and none of them are going to have jobs. The politicians are going to promise them everything. If you keep your company in Latin America, you will go down the drain." So, when I became chief executive, I took a little cash money and looked at other investments.

There is hardly any future for multinationals in developing countries. That little party is over. Those countries have debts of $300 billion, and 60% of it comes due by 1982. But the future of multinational companies in developed areas, in Europe and Asia, is very good.

I'm not optimistic about the U.S., however, until we solve our problems. The whole damn American steel business is noncompetitive with many foreign producers. So are some other industries. They don't have the incentive to modernize. We ought to give double tax deductions for certain technical R. & D.

Great countries are built by people who take chances and have the incentive to invest in something unusual. There is no way that people will take big risks if they have to pay high taxes on fictitious, inflated profits. We ought to eliminate capital gains taxes or index them, that is, reduce those taxes to take account of inflation. As it is, well over half of the capital gains taxes are paid by people who have incomes under $50,000. We ought to cut maximum taxes on income from 70% to 50%. That would reduce tax collections by only 1.1%, but it would stimulate a lot of investment.

Another problem: there is no long-range planning. A Congressman has a two-year horizon, the U.S. President four. You put a head man in a company for only four years, and he won't do anything. He's only interested in having good results for those four years. He'll entertain no research, no development programs that won't pay off for eight or ten years. All top executives ought to be fairly young when they are elected, to be given a shot at really doing something.

I work almost all the time. We have 78,000 employees and 80,000 shareholders and thousands of pensioners, and I feel a tremendous responsibility to all of them. We made a mistake in Ireland a couple of years ago by not keeping in touch with a company that we had over there. We threw 175 people out of work in a small town. You do that once, and see how you feel. That's the sort of thing that haunts me. Therefore, I can't stand not paying attention.

Like tonight. I'll leave the office, be driven from Manhattan to Long Island, dictate to a secretary all the way out, have dinner with my wife for 90 minutes at the yacht club, then work all the way back to Manhattan, go to my apartment, and work over sales charts and company books until 1 a.m. Tomorrow, I'll be back in the office at 7:50 in the morning and go into a budget meeting at 8:20. I give 8% of my time to charity. I work with Cardinal Cooke; I raised about $300,000 last year for Father Bruce Ritter, who takes the kids off the streets in Times Square, and I'm treasurer of the National Jewish Hospital in Denver.

What do I do for fun? Work is my fun. I love it. I'm not recommending it. I just feel that that is my obligation.

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