This Thing Called Goodwill: The Reynolds Metals Company and Political Networking in Wartime America

Abstract

This article examines the Reynolds Metals Company’s political networking activities in Washington, D.C., and the state capitals of the U.S. South in the 1940s and 1950s. It argues that Reynolds’ astute recruitment of senior staff from federal and state governments, its adept building of elite networks in the legislative and executive branches, its judicious espousing of key political rhetoric (antitrust, regional development, national security), as well as its nurturing of Democratic circles in the South were crucial to their attainment of competitive advantage. This saw the company rise from being a new entrant in the U.S. primary aluminum production during World War II to the second-largest national producer by 1946 and a major global player by the mid-1950s. This same political networking was critical in maintaining that advantage after World War II in the face of competition from the Aluminum Company of America and the Canadian multinational Aluminium Company of Canada. Both “wartime” (covering the period from World War II and into the Cold War) and the legacy of government intervention (from the early twentieth century until the 1960s, including the New Deal) provided a fertile context for RMC’s business strategy. The company’s success owed much to founder Richard S. Reynolds Sr.’s acumen in hiring the right people, creating or joining the right networks, having the right social capital, as well as his experiences and connections accrued from working with his uncle, the noted tobacco magnate R. J. Reynolds. The article offers insights into the nature of U.S. business–government relations.

Aligning to disadvantage: How corporate political activity and strategic homophily create path dependence in the firm

“…Investments takeover, 1958Investments takeover, -1959 In the winter of 1958-1959 BACo became embroiled in a highly contentious and bitterly fought takeover battle with the UK company Tube Investments (TI) and the US aluminium producer Reynolds Metals (Cailluet, 2001;Perchard, 2012). Reynolds's astuteness in political maneuvering transformed it (in less than 20 years) from a non-entity within global aluminium to a major player in an industry that was characterized by its 'country club atmosphere' and high degree of oligopolization (Perchard, 2019). The mishandling of the takeover battle by BACo's leaders and 'pre-eminently establishment figures' (Roberts, 1992: 193), Portal (as Chairman) and Cunliffe (as Managing Director), encapsulated the weaknesses of the selection of strategic homophily in its recruitment of socially well-connected former military officers and officials who were too close to government, and commercially inept, in an increasingly competitive global industry.…”

“…is over-departmentalised and civil service minded’ (VHS, 1959). In contrast, Reynolds’s successful CPA in Washington DC in the 1940s and 1950s bought them considerable competitive advantage, centred on their investment in organizational capabilities in their acquisition of a sophisticated public affairs machinery (composed of former politicians and officials) that did not tie them to government (Perchard, 2019).…”