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Class of '52: the U of M Welcomes Back One Of Class of '52 The U of M welcomes back one of its most famous commerce graduates, F. Ross Johnson by Renée Alexander There is no way of measuring the best business leader to have ever come out of Winnipeg, but F. Ross Johnson stands alone by virtue of one very important distinction— he’s the only local product to have had his mug on the cover of Time magazine. Back in 1988, the 1952 University of Manitoba graduate quarterbacked what was then the largest corporate takeover in history when RJR Nabisco Inc., the food and tobacco conglomerate of which he was CEO, was purchased by New York-based private equity firm Kohlberg Kravis Roberts & Co. After losing a widely publicized effort to take the company private for $75 per share, Johnson set in motion a series of events, highlighted by some serious wheeling and dealing on Wall Street, that saw the firm bought for $109 per share, or $25 billion, a more than 45 per cent premium over the initial plan. (All figures are in U.S. dollars.) “I always looked out for the shareholders,” he tells Marketplace Magazine in his first official interview in more than 20 years. “We just sat back and watched. To give you an idea of what it meant in money, my shareholders gained $13.5 billion in six weeks.” When asked if the suitors overpaid, he replies with a smile, “of course.” The deal was immortalized in Time on December 5, 1988, with Johnson’s picture under the headline: A Game of Greed. (Johnson reportedly earned $53 million from the buyout.) That wasn’t all. A book, entitled Barbarians at the Gate: The Fall of RJR Nabisco, followed in 1990 and a television movie of the same name was released in 1993, starring James Garner as Johnson. While it is common practice in Hollywood to interview real-life subjects before filming starts, Johnson said that didn’t happen with Barbarians. “They didn’t say one word to me. I never knew a thing. They’re making movies, they’re not telling the truth,” he says with a laugh. “Lauren Bacall saw it and phoned me and told me she thought I came out fine.” After earning an MBA from the University of Toronto in 1956, Johnson, now 78, began his career as an accountant at General Electric. He then moved on to the T. Eaton Company as vice-president for merchandising. In 1971, he became president and CEO of Standard Brands Ltd. and two years later he moved to New York to oversee international operations with its parent company, Standard Brands Inc. He became chairman and CEO in 1976 and five years later he spearheaded its marriage with Nabisco. He was named president and CEO when Nabisco and RJR merged in 1985. In 1989, after the sale of RJR Nabisco, he retired and started his own private investment company, RJM Group, Inc., in Atlanta, Ga. And while still a Canadian—he was appointed an Officer of the Order of Canada in 1986—he chaired Atlanta’s successful bid for the 1996 Summer Olympics. It should perhaps come as no surprise that Johnson went on to such incredible business success. His circle of friends at the U of M included Jim Burns, who went on to become the CEO of Power Corp., one of the biggest companies in the country; Arthur Mauro (CEO of Investors Group); Kevin Kavanagh (president and CEO of Great-West Lifeco); Arden Haynes (CEO of Imperial Oil Ltd.); Bill Norrie, one of Winnipeg’s longest- serving mayors; Harold Buchwald, a legend in legal and community-building circles until his death last year; and the late Izzy Asper, founder and CEO of Canwest Global Communications. “Ross was certainly someone who achieved some pretty lofty heights and he did it with a certain panache,” says Arthur Mauro, now the chairman of the Winnipeg Airports Authority. “Back then I was the president of the students’ union and he was selling ads in the student telephone directory. (When he ascended to the top of RJR Nabisco) nothing had changed, he just moved up to a larger theatre.” Johnson, who was a Winnipeg Tribune paperboy as a youth, is at a loss to explain how so many prominent business leaders could come from a small centre like Winnipeg. “It’s a good question. Back then, your opportunities (in Winnipeg) were Great-West Life, the banks and maybe a little bit with the railways. When you hit a certain age, you wanted to go out and see the rest of the world,” he says of the adventurous group. Jim Burns uses the word “extraordinary” to describe Johnson and his many accomplishments. But, perhaps most telling of all, he says Johnson was a guy everybody liked to be around. “He didn’t posture around. He was a very ordinary guy. He didn’t pretend to be a big shot even when he was, no matter who he was dealing with,” he says. “I’d rank him up with the best. From a business standpoint, he went as far as anybody I knew.” He says Johnson also had a great sense of humour and was a huge sports fan. He played basketball for the U of M and also called many elite athletes friends. (One of them, a former football player—and future politician—was Ronald Reagan.) Sports were also an important element of his later marketing efforts, highlighted by Nabisco’s sponsorship of the annual Dinah Shore Invitational golf tournament. Despite all of this, Burns notes that while he hung out with Johnson while they were in university, he didn’t pick him for greatness. “At 19 or 20, you didn’t think anybody had any brains,” he says with a laugh. While Johnson moved away from his hometown more than 50 years ago, Burns says that his old friend hasn’t forgotten his roots. During his recent trip to Winnipeg to speak at his alma mater, Johnson spent a couple of days with his eldest son Neil, showing him some of his old haunts. Johnson, who now splits his time between Jupiter, Fla., and Caledon, Ont., no longer has any family in Winnipeg so his visits to the Manitoba capital are usually in an official capacity. This time was no exception as he addressed about 500 people at a luncheon at the Fairmont Hotel in early September, the vast majority of them first-year bachelor of commerce students. Known for his aggressive style in the boardroom, Johnson says he is big on backing up his decisions with research rather than going with his gut instinct. “But it’s one thing to get the research, it’s another thing to interpret it,” he says. Johnson, who is today Chairman of RJM Group, says the business world has changed in so many ways over the last half-century. For example, there’s far more government regulation today and target markets have increased from small pockets in particular areas to the entire globe. “You never heard of Japan, Singapore, India or Russia (back then). You were working in very tight little areas but then (those countries) started to grow all of a sudden,” he says. “The world I grew up in isn’t (the students’) world. They’re living in an entirely different world than we did with all the government bureaucracy. These guys and gals are going to have to cope with far different and far less comfortable circumstances than we ever did, even though we came from the Depression.” F. Ross Johnson on Marketplace Magazine TV To watch an exclusive video of F. Ross Johnson in conversation with Marketplace Magazine publisher Glenn Tinley, CLICK HERE. Taken from http://marketplacemagazine.ca/index.php/Fall-2009/class-of-52.html .
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