Henry Jacques Gaisman - Mastermind!

I'm guessing. Wrong spelling in the journal articles .

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Pictures from Fall of 1927 of Gillette's blade manufacturing processes. So, I'm thinking too much labor, skilled and otherwise, and not enough automation. The result was slipping quality and higher costs than AutoStrops continuous strip method.

 

Further MBLAKELE states AutoStrop wins the patent infringement lawsuit when it is actually settled prior to conclusion.

 

I'm so excited! I was able to contribute to something beyond my opinions! That's like "sic'em" to a dog!

 

So, I ran across a Journal article* dated September 1931 which discusses the Gillette/AutoStrop merger. It is interesting as follows. It characterizes the merger as a recent internal reorganization, but this could just mean the firing of Fahey, Pelham and Thompson and further elevation of Gaisman and his team. It states that Gillette made a change to its product in early 1930 which is when the consumer public at large first learns of the New blade and razor. It says that appearance of the new products were anticipated by a competing blade that would fit Gillette's new razor. This is a reference to AutoStrop's Probak blade and it getting patented ahead of Gillette's New blade. Further, the article states that rumors of imminent patent litigation caused Gillette's management to issue a challenge and invitation for AutoStrop to file suit. This invitation the article characterizes as a tactical error that when coupled with attempts of officers and directors to use the company funds to pump up Gillette's share price caused the absorption of Gillette by AutoStrop even though the name Gillette was kept. Further, it states that practically the entire old management team was eliminated shortly after the merger.

Two points... the article attributes Fahey's challenge and Aldred's stock pool** (I'm assuming) as the reasons for the old management's demise at Gillette. This makes me want to investigate the details of the pool more carefully. I had just thought that the managers via the pool were selling their holdings at a higher price back to Gillette in the open market. But, inappropriate use of Gillette's corporate balance sheet to pump up the share price needs better understanding. Ultimately the directors who profited off of the pool's purchases had to disgorge their profits.

* Mergers and Reorganizations in Depressions by Philip L Carret in Corporate Practice Review Vol 3 No. 9 P10-17 (September 1931)

**John Aldred did survive the merger and stayed on until 1938 when he resigned as chairman of the board.

 

To me the giant tactical error was the merger negotiations. Why invite the fox (Gaisman) into the hen house? It was just a major blunder. The existing management team should have used all of Gillette’s resources to fight and fend off Gaisman. They severely underestimated him.

I'm wondering if they had something personal against Gaisman that made them underestimate him. Not that it makes any difference but he was a "confirmed bachelor" up to this point. Was that code for homosexual? I don't know. Gaisman explains his bachelorhood as no woman would put up with his work schedule which many times took odd hours. And, it turns out Gaisman was Jewish. Were the Gillette management team underestimating Gaisman because they were antisemitic and/or homophobic? As jmudrick pointed out Gaisman was friends with Alfred Stieglitz. At the age of 45, Gaisman was running around in the art scene of New York city. Again, he was friends with Alfred Stieglitz who was very instrumental in promoting photograph as art and because of this friendship, I believe, Gaisman became involved in invention in the camera business. Gaisman did not necessarily live the conventional and conformative lifestyle of the times it seems.

 

I don't know if Gaisman's 1914 invention precedes or follows the beginnings of his friendship with Stieglitz. Interesting stuff though. See my writing on the Mark Cross razor for another interesting intersection of art and razoring.

I have no idea about Gaisman's sexual preferences or Gillette's perceptions thereof, but having seen anti-Semitic comments quoted coming from Gilllette execs (sorry don't recall the specifics) I'm sure that colored some views of the man. FWIW Gillette's competitors at ASR and Segal were also Jewish immigrants.



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As per BusinessWeek 1930-02-12:

All design details such as portraits of the blades and razor are jealously guarded and the first advertisement of such details will be March 8, 1930 (The Saturday Evening Post) but such publication hits the streets March 6, 1930. Unveiling of the new Gillette was admirably dramatized and on January 6 the plant made the last of the old models and private guards and police protected access to the meetings of the sales force. Full disclosure of the designs were given to the sales force. Distribution from the factory starts February 15, 1930. King C Gillette was in Singapore and has not been active for 10 years. Frank J Fahey and his lieutenants worked out the details of the new model. As per Fahey, annoyance from other blade companies was not the cause of the new design but rather research on solving complaints about the old blades weaknesses.

 

Ok. Singapore 1930 for color.

Gillette wouldn't have cared about quality if people were still reluctantly buying their blades. They increasingly weren't (mediocre quality and high price being a poor combination), because consumers had options, a trend that would continue and only get worse under Gaisman.



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Fahey was lying in the information given to Business Week. Fahey was not just interested in the breakage problem which supposedly R Thompson had solved with the cutout corners, but Fahey was most definitely concerned about the competition. His plan was to charge about a penny or so more for each new blade, dump old blades and not have competitors blades fit in his new razor. He knew that the continuous strip method made better blades more cheaply, but he made a conscious decision not to spend the effort to upgrade his equipment. Rather he retrofitted the old individual blade stamping equipment to produce the New blades. Same blade basically, different shape, and he charged a penny or so more each. Gaisman when he got in control at Gillette at least upgraded to the continuous strip equipment with differently tempered areas to improve edge sharpness and blade flexibility.

I wonder why you don’t think quality improved at Gillette after he installed the Probak process and equipment there? I can see Gaisman continuing to maintain Gillette’s policy of premium prices. But, I do believe quality should have improved. No?

 

As I've said before, while I'm guessing the blades got better -- at least they didn't break anymore -- all I have to assess quality are the facts that 1) despite the changes blade market share for Gillette continued to drop precipitously all the way through 1938, and 2) Consumer publications in multiple years found the Gillette blades to be inferior to at least some comparable or cheaper blades . I understand Gillette poo pood one of those tests but I'm not convinced that we should trust Gillette's words (as Russell Adams seems to) over the decisions of consumers in the competitive marketplace in which Gillette had all the advantages of a well capitalized company in both production and advertising.

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Ok got it. The Singapore video was an interesting watch.

PS I got access to the NYU library which has the Business Week issues I was looking for in addition Forbes and Fortune coverage of the merger. So, that’s a bonus.

 

In the course of your research if you find any numbers about ASR performance during the Gaisman years I'm very curious how much of the 82% not buying Gillette in 38 were buying Gem blades vs other DE manufacturers' blades.

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I have to keep in mind the market share drop when I’m looking at the Gaisman period at Gillette. Just spitballing but I recall something about not giving big discounts any more to the large chains that were able to move volumes. United Cigar dropped Gillette. So, maybe I can determine other reasons for the market share drop other than high prices and middling quality. I’m on it.

 

An observation from 1935.....



And '36...

..

37....




ASR slips in '38..maybe time for a new razor ...

 

But '38;was even worse for Gilllette. One more re Gillette earnings at the beginning of war in Europe in' 39.

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Fortune 1930-04-01:

Total World Market 800 million shavers. Gillette's share 115 million ASR's Share 35 million. (Therefore Gillette is 3.3 times larger in terms of people served).

The last old style blade was manufactured on 10-15-29 and was blade number 5,318,436,976 and Frank Fahey placed it in the very first Gillette razor produced, shaved with it an pronounced an excellent shave result. The last old style razor produced was 115,272,539. (This is curious because this is the date the "Whiter Gillette?" article states. However the 01-07-30 Daily Boston Globe states that production ceased on 01-06-30 and on that day the last old style razor produced was 115,272,539. My best guess... Fortune got their date wrong. Also there is the David/Rev579 3 holed blades produced in November of 1929).

Even though the patent protection was lost in 1921, Gillette protests that their competitors are not making inroads into their blade sales. And, this is because their blades are made to a tolerance of 1/1000th of an inch. (Gaisman claims no such tolerance is needed with "H" style holes stamped in their blades that self position on the studs and therefore Gillette's process is wastefully too precise).

Fortune finds it curious that Probak's new blade will fit the New Gillette razor. And, that Probak has received a patent for it. (Yes this is most curious!!)

As per John E Aldred on 02-07-1930, "that during the past few days numerous rumors have been circulated, mainly in stock market circles" as concerns the new razor and blade that are false statements and production was only started after exhaustive study convinced management the new blade was a long step forward and that the attorneys assure the patent situation is usual and orderly. No difficulty was anticipated in production or distribution of the new products.

During the last 3 months of 1929 with curtailed production of the old 3 holed blade this has caused dealers stocks to be depleted and that all production capability for all Gillette blades has been already sold by 04-01-1930. But the factory is running 20 hours per day and producing 2,700,000 blades per day to meet the backlog. (Again Fortune is reinforcing the idea of blade production ceasing at the beginning of forth quarter 1929. Maybe production was just reduced an not stopped?)

Fortune has to be wrong. Hundreds of employees would be idled for 3 months and no factory production for 3 months of blades. It just doesn't make any economic sense. Fortune has to be wrong on their 10-15-29 date. That blade factory was the money tree! Shut it down for 3 months? I sincerely doubt it.

 

Business Week 1930-09-03:

At this time the patent fight still looms, a merger is in the talks and nothing has been decided yet. An interesting couple of notes in the article are that Gillette has worked a promotion with Colgate-Palmolive whereby a free New razor is given when someone buy as tube of their shave cream for $.35. Nominal price for the razor from Gillette is $1.00 each. And so success was this promotion that 10 million of the combination sets were delivered in the last 3 months. (It is in Gillette's best interest to get as many New razors out there as possible as soon as possible - even if they have to give them away free). Also the article states that European steel is better than American steel at making razor blades and therefore Gillette uses special Swedish steel and the company holds large numbers of shares in a Swedish mine and smelter operation larger than the size of the state of Rhode Island.

 

Given those figures represent Gillette just a couple of years off its peak, and ASR prior to its introduction of the successful Micromatic, those are surprisingly strong numbers for ASR. They would have been much closer to Gillette a few years on.

Although they lacked any new product in the lead up to the Micromatic, they were taking direct aim at customer dissatisfaction with expensive Gillette blades.

1928



In 1929 the main promotion was a free gold razor (1912 type) and two blades with a purchase of Mennen cream.