Today, when we think of the word “industrialist” we tend to think of people like Henry Ford, Andrew Carnegie and Henry Clay Frick. Yet, in the 1950’s, the world’s most powerful industrialist was none of these people, it was Henry J. Kaiser…
Starting with nothing, Henry J. Kaiser soon became one of the most famous businessmen of his time, amassing a fortune over $25 billion by today’s standards!
Early Life
The man who history would remember as Henry John Kaiser was born as Heinrich Kaiser to Franz (later Frank) Kaiser, a shoemaker, and his wife Mary Yops, a part-time nurse, on May 9 1882 in the small hamlet of Sprout Brook in upstate New York.
As his birth name implies, both of his parents were German, originally from the state of Hesse. Whilst Mary was only the daughter of Hessian immigrants, Franz would leave Hesse for the US in 1872, at the age of 30.
Upon arriving in the US, Franz Kaiser would live with the Yops family, who had known the Kaiser family back in Hesse. Living with the Yops family, Franz would grow close to the family, especially their daughter Mary, who he’d marry on January 5 1873.
Having three daughters before Heinrich was born, Franz would continue to work as a shoemaker, barely making enough to survive. Due to this fact, Franz and Mary would instill in their children a strong work ethic – telling them it’s the only way to become successful.
As the hamlet of Sprout Brooks, didn’t provide enough business for Franz to provide for his family, he’d save enough to move the family northwards to the town of Whitesboro, near Utica, New York.
Finally having enough, the family moved there in early 1889.
Despite being much larger, Franz Kaiser’s fortunes didn’t improve much. To top things off, in 1899, when Heinrich Kaiser was only 17 years old, his mother, Mary Kaiser, would die at the tender age of 51.
The death of his mother would affect Kaiser for the rest of his life.
It would also be in Utica, where Heinrich Kaiser would officially change his name to Henry John Kaiser (as “Heinrich” is the German equivalent of “Henry” and adding “John” made him sound more “American”). This would be the name he’d use until his death in 1967.
Pre-Business Ventures
Likely due to financial constraints, Henry Kaiser dropped out of school at the age of 13 to work as an errand/cash boy at the prestigious J. B. Wells Dry Goods Store department store in Utica, New York.
Three years later, at 16 years old, Kaiser would leave this job to become a photographer’s apprentice. Within four years, Kaiser was running the photographer’s shop in Lake Placid.
It would be whilst he was running this photography store, where he would meet a young woman called Bess Fosburgh, a woman four years his junior and the only daughter of a wealthy lumber merchant.
Immediately infatuated with her, Henry and Bess would begin courting (dating) before Henry would ask Bess’s father for his blessing to propose to Bess. As a photographer, his income was erratic to say the least, so Bess’s father refused.
However, he didn’t refuse outright.
Instead, he told Henry that if he could build a house for his family, have $1,000 ($30,000 in today’s money) in assets, and a monthly wage of $125 ($3,750 in today’s money), he’d give his blessing.
Despite seeming like an impossible challenge, Henry would rise to the occasion, moving westwards to Spokane, Washington to find a job as a salesman for a hardware company. Ten months later, he’d have everything Bess’s father wanted.
Holding his end of the deal, Bess’s father would give Henry his blessing, with the wedding taking place on April 8 1907 in Boston, New York. The marriage would result in two children, Edgar (born July 1908) and Henry Jr. (born February 1917).
The marriage would also help Henry in years to come.
Whilst Henry was forced to abandon his studies at 13 years old, Bess had received a top-tier education from some of the best schools on the East Coast, giving her connections her husband would use extensively during his business career.
Getting a Start
Settling down with his new family, Henry would continue to work as a salesman. As a salesman, however, Henry was well aware of the rise of automobiles, and the need for roads that they could drive on.
Seeing an opportunity, Henry would first act as a construction materials salesman, where he’d learn about the different materials you needed to build different things, including roads.
With this knowledge in hand, Henry joined a cement and gravel company in Spokane, in early 1909, putting his knowledge of building materials to good use, as well as learning more about the construction industry as a whole too.
Not long after, Henry Kaiser was working for a Canadian paving company in Vancouver. Disaster struck in 1914, however, when the company was half way through paving a new road, when the company itself went under.
Realizing the opportunity that had just presented itself, Henry J. Kaiser formally incorporated his own paving company, Henry J. Kaiser Co., Ltd. Here, he’d use his connections to secure the remainder of the contract for his own company.
Now having a multimillion dollar contract by modern standards, Kaiser hired many of his former co-workers. Unlike his previous employers, however, Kaiser embraced new technologies, purchasing state-of-the-art road paving machines.
Whilst expensive to acquire, these soon paid for themselves, as they could do the jobs of several humans, at a much cheaper rate. This allowed Kaiser to finish the road ahead of schedule, which soon gained him a reputation for his speed and high-quality work.
Hoover Dam
Not surprisingly, Henry J. Kaiser Co. soon took off, gaining government contract after government contract, not to mention the countless civil contracts the company got during the Roaring Twenties.
Perhaps the most integral contract the company received was in 1927. That year, the company was awarded an $18 million ($278 million in today’s money) contract to build roads and bridges in the Cuban province of Camagüey.
It’s safe to say that business was booming for Henry J Kaiser, with the sky seeming to be the limit.
However, when the New York Stock Exchange crashed in 1929, it would set off a worldwide recession we now know as the Great Depression. As with many other businessmen at the time, Henry Kaiser was forced to lay off large portions of his workforce.
To help the economy, the federal government would order the creation of the Hoover Dam. Not having the resources to build the dam on their own, Henry J. Kaiser Co partnered with other construction firms to create a joint venture known as Six Companies, Inc.
With their combined resources, they were able to launch a successful bid to build the Hoover Dam. Construction of the Hoover Dam not only created thousands of jobs, but also brought in millions of dollars to each of the companies that made up the Six Companies.
Over the course of the 1930’s, Henry J. Kaiser Co would lead the construction of several more dams, either directly or through Six Companies, Inc. constructing dams like the Grand Coulee Dam (1933-1942), Bonneville Dam (1934-1937) and Parker Dam (1934-1938).
WWII
Kaiser Automobiles
Kaiser Aluminum
Kaiser Broadcasting
Real Estate
Death
Legacy
How Can I Replicate What Henry J. Kaiser Did?
Reading about the incredible life of Henry J. Kaiser, chances are that you’re wondering how you could replicate what he did to similarly become one of the most famous and wealthiest industrialists in the world.
However, replicating what he did, especially in the West, will be nigh on impossible.
What Can we Learn From Henry J. Kaiser?
Beyond trying to replicate what Henry J. Kaiser did, his life can also teach us a lot, not just about starting and running your own business, but also about personal finance and just life in general!
Always Diversify
Having originally made his fortune in the construction industry, Kaiser would eventually make the jump into the shipbuilding – an industry he had absolutely no knowledge of whatsoever.
Despite knowing very little about shipbuilding before getting involved in the shipbuilding business, Kaiser Shipbuilding soon became quite profitable.
Using this money, Kaiser would then be able to start Kaiser Automobiles and Kaiser Aluminum after the war. Here, all three of Kaiser’s businesses would build off one another’s success to become even more successful!
Being even more successful would give Kaiser more financial resources, which allowed him to start investing in real estate across the US. Eventually Kaiser would get involved in television, soon founding Kaiser Broadcasting.
By doing all of this, Kaiser protected his business interests. If the manufacturing industry isn’t doing well, the real estate and/or media industries are doing well, thus minimizing Kaiser’s potential losses.
Don’t Forget to Give Back
Whilst not the richest man in the world during his time, Henry J. Kaiser was certainly not poor by any stretch of the imagination. As such, he could’ve easily sat in ivory tower and counted his nearly endless wealth.
Yet, Henry didn’t do that. Instead, he chose to use part of his money to help others.
In 1942, Henry Kaiser established the Kaiser Permanente for the shipbuilders employed at the Kaiser Shipbuilding.
Whilst today they are partly for-profit, when it was introduced, the Permanente provided free healthcare for the employees of Kaiser Shipbuilding and their families.
Six years later, Henry founded the Kaiser Family Foundation, which focuses on healthcare-related issues, running an independent think tank that publishes healthcare facts and analysis that gets used by lawmakers, the media and the general public on a daily basis!
Despite both organizations both being well over 70 years old, both are still going strong today, showing no signs of slowing down any time soon…
Let Your Children Build on Your Work
As with many wealthy businessmen, Henry J. Kaiser was fully aware of his own mortality. Even despite his huge wealth, he couldn’t stop himself from dying.
Understandably not wanting the business empire he’d spent his entire life building to crumble the second he died, Kaiser spent a large portion of his life grooming his eldest son, Edgar, to take over the family business.
Edgar’s position as his heir would be solidified in 1956, when Edgar was named as the president of Kaiser Industries. Upon his father’s death in 1976, the younger Kaiser would assume full control of his father’s business.
Over the course of the late 1970’s and early 1980’s, the Kaiser family’s business holdings would grow enormously, before Kaiser Industries came crashing down due to being outcompeted by cheap labor from countries like China and India.
Despite the collapse of Kaiser Industries, some of the Kaiser family’s other holdings would remain. These would be sold off by Henry’s son and grandson, allowing them to have their money invested, and so they could live like “old money” elites.
Don’t Stay in Just One Country
When we cover people like Henry Kaiser on our Surprising Wealth Stories segment, most of them tend to just stay in one country. Those that don’t, such as German banker Jakob Fugger, often tend to just go to the countries surrounding their home country.
As an industrialist, and a wealthy one at that, Kaiser could’ve easily expanded northwards into Canada, or westward across the Atlantic to Britain, Kaiser chose a completely different route instead.
Originally from the East Coast of the US, Kaiser moved his base of operations to Hawaii, before expanding his automobile business into South America, primarily the then US-aligned Argentina.
Although a smaller market than countries like Canada and the UK in terms of the number of people, Kaiser chose Argentina due to the country’s abnormally high demand for Jeep-style automobiles, which were higher per capita than the UK or Canada.
Always Take Advantage of The Situation
Has the story of Henry J. Kaiser inspired you? Tell me in the comments below!
