Howard g. haas; sealy, inc.
AMERICAN FURNITURE HALL OF FAME
ORAL HISTORY INTERVIEW
January 21, 2014
LONGBOAT KEY, FLORIDA
Tony Bengel, Interviewer
INTERVIEWER: This is Tony Bengel. It's January 21, 2014, and I’m interviewing retired Sealy President and CEO Howard Haas at his winter home in Florida. Let's begin at the beginning. Where and when you were born?
HAAS: I was born April 14, 1924, in Chicago.
INTERVIEWER: Was any of your family in furniture or bedding?
HAAS: No, they were not. My father was a lady’s dress manufacturer. None of the family was in the furniture business. I had a cousin who was one of the founders of the American Furniture Mart in Chicago, where the furniture markets used to be held when a great deal of manufacturing was in Grand Rapids, Michigan. That would have been around 1930. That’s the closest the family ever came to the furniture business until I entered it.
INTERVIEWER: Tell us about your family. Was your mother employed outside the home?
HAAS: No, she was not. My mother was born in Niles, Michigan, a small town just north of South Bend, Indiana. My father was born in Europe. They were married in about 1910. I had two brothers. I was the third male child.
INTERVIEWER: What was your father’s heritage?
HAAS: My father was born in a small town which at that time was in Hungary but is now part of Slovakia. The name of the town was Valaská Belá. About 15 years ago, when my wife and I were in Vienna, we decided to rent a car and drive there. It's still a tiny little town. My father went to school through fifth grade. They had no more schooling there, and his family couldn't afford to send him to a bigger city, so he was apprenticed as a stained-glass window maker. He worked in the factory until he was about 15 years old, then joined the Hungarian Navy. You wouldn't think a landlocked nation like Hungary would have a navy, but it did. He was on a vessel that took him to New York, where he left his ship and eventually became an American citizen. He became a rather successful lady’s dress manufacturer, but unfortunately was killed in an automobile accident in 1938 when I was 14.
INTERVIEWER: How did your father become a lady’s dress maker?
HAAS: He was a very creative man. He couldn’t speak English when he came to New York, and he became a low-level worker in the construction business. I'm not sure how he got from New York to Cleveland. But, he started learning about dress-making there because of his artistic flair. He first learned how to cut lady's dress fabrics with electric cutting equipment. I don't know why he left Cleveland and came to Chicago, but it was during the period when women changed from wearing blouses and skirts to wearing dresses. He had great contacts in Europe, and he'd go to Europe and get these little beads and have the beads embroidered into beautiful blouses, and later into dresses after World War I.
INTERVIEWER: Did he have his own company?
HAAS: He had his own company, the Adolf R. Haas Company. He had a factory in Chicago. He was the top salesman, too. He traveled the northwestern United States from Chicago to Wyoming and Montana and back. He was a very good designer as well as a salesman. My dad traveled about four months a year, and ran the factory when he wasn't on the road. When he wasn’t there, he had a dependable woman who understood the business and ran it.
INTERVIEWER: Did you work for your dad as a kid?
HAAS: I sure did. Beginning in the eighth and ninth grades, after school I'd take the train into the city – we lived 20 miles south of Chicago – and walk about two miles to the factory. I'd work in the factory till about 8 or 9 at night, and then I would have a wonderful reward. My father would take me to dinner. In those days, most people didn’t go to restaurants. This was during the Great Depression. I felt very privileged to be able to have dinner with my father as pay for my work.
INTERVIEWER: Did your older brothers work in the business too?
HAAS: My oldest brother did. He was eight years older than I, and he was a salesman in the South, in Mississippi and Alabama. I don't recall that my middle brother worked in the factory.
INTERVIEWER: Did you ever go with your father on his sales trips?
HAAS: No I didn’t go since I wasn't old enough at the time. But I know he was a very good salesman and made a very good product.
INTERVIEWER: Would you consider it high end?
HAAS: Moderately. It wasn’t the highest end but moderately high end. He sold Marshall Field’s, which was the top retailer in Chicago, but mostly he sold independent dress shops. People generally didn't bring their lines out to Great Falls, Montana, but my father would drive there and show his line, which he carried in the car. He’d stop along the way. Every day he would stop at a different store. That’s what made his business. He was a really a good businessman.
During the Depression, my father had enough foresight to go to the bank before they were closed by FDR and get gold. He paid all the people who worked for him in gold pieces while the banks were closed. I was 13 at the time and I’ll never forget that.
INTERVIEWER: So he was able to do well even during the Depression?
HAAS: During the Depression, we lived very well. We had two cars. Hardly anyone had two cars then. However, my middle brother became ill when he was about 10, and my mother, my brother and I moved to California so we didn’t have to spend the cold winter in Chicago. My father would come out and see us on occasion. After my father was killed in the car accident, we thought my oldest brother might be able to run the business, but he could not and we closed down the dress operation.
INTERVIEWER: Was your mother ever engaged in the business?
HAAS: No, not at all.
INTERVIEWER: Tell us about your education.
HAAS: I went to the same grammar school that First Lady Michelle Obama went to 50 years later. It wasn’t brand new in my day, but it was new. I did very well and ended up being the valedictorian of the eighth-grade graduating class, and gave a speech at the graduation. That was in 1938, and my father was still alive at that time, although he wasn't at the graduation because he was on one of his sales trips. After that, I went to a private school called the Harvard School for Boys.
INTERVIEWER: In Chicago?
HAAS: Yes, it was in Chicago. It was a very strict school. We had an hour of Latin twice a day. We had to go to school on Saturday and we even had one hour of Latin on Saturday. Not that I can remember much Latin now, but I do remember the school was exceedingly strict. After my father died, it was determined that it was best for me to go to public school. The private school was too far away and I had to take public transportation to get there, and my mother didn’t like that idea because of the neighborhood where the school was located, which was not good.
So, I went to a local public high school, a very good high school, and I did quite well. I was a good student. I was in the honor society the entire time I was there. I ran for office and was an officer of certain classes, although not the graduating class. I graduated in 1942. The war was on, so I decided that because my mother was a widow and I was living at home, I should not go away to college. I went to the University of Chicago, which was about five miles away from where we lived at the time.
The government was starting to draft everybody by that time. An Air Force recruiter came to the university and said, “We want people to sign up with the Air Force, we will pay your tuition to stay in school, get a degree, and then we'll make you officers in meteorology, predicting the weather.” I thought that was a great idea, getting a degree for free on the government. College at that time was about $250 a quarter, so it wasn’t a gigantic expense. I signed up in October of ’42. In December, I got a letter from President Franklin Roosevelt that some 10 million other people got, saying, “Report for duty in Wichita Falls, Texas, on January 1.” My deferment had lasted about four months instead of four years. I completed one quarter at the University before I became an aviation cadet.
So there I was, in Wichita Falls, Texas, carrying a gun and doing 15-mile hikes with a 50-pound knapsack on my back. It was torture. I was in a company with mostly people from New Mexico, who got drunk every night. I didn’t drink. I was just a naive schoolboy from Chicago.
Basic training ended. And, because so many people had been called up into the Air Force at the same time, they didn’t know what to do with all of us. They sent me to Southwest Texas State Teacher’s College, which was 12 miles outside of Austin. It's now quite a distinguished school, but at that time, it was like a country school. I stayed there five or six months, then the Air Force sent us to San Antonio, where we took a whole bunch of tests.
I learned how to fly while I was in Texas. They had a 65-horsepower, single-engine training plane and they stuck me in it. The first time I took off, when I was 10 feet above the ground, the instructor said, “You fly it, mister.” They called aviation cadets “mister” at that time. Well, I had a great time flying the plane, but felt I wasn’t going to be a pilot as a career.
INTERVIEWER: Did you ever study meteorology?
HAAS: No, I did not. The whole meteorology thing went down the drain when I was sent to San Antonio, Texas. I was just another aviation cadet and I was going to go wherever they needed me. Well, they needed bombardiers, so everybody in my group got sent to bombardier school. I went to Houston and learned how to use flight computers. At that time, there were no electronic computers. Everything was done on slide rules. I went from there to Harlingen, Texas, to gunnery school, learning how to shoot machine guns. When I took my test, I was so tired I couldn’t even stand up. I just pointed the gun at the target and let it go, and the next thing I know I got a little medal saying I was an expert marksman.
I eventually got into advanced bombardier school in Childress, Texas, where I learned to use the Norton bomb site, and also had to learn navigation. I was supposed to graduate and get my wings in April. In the middle of March they woke us up in the middle of the night and said, “We’re going to commission you tonight. You’re going to get on a plane tomorrow and fly to New York because we need bombardiers in Europe.” We got to New York, and typical of the military, they lost our orders, so we sat in New York for a month with nothing to do.
I finally got overseas, first to North Africa, then to Italy. I flew 50 missions, and at the end of 50 missions they sent me home. My crew was very lucky. The plane would come back from combat with 100, and sometimes, 150 holes, but we never had to bail out. Nor did anyone ever get killed on our plane.
My two brothers were in the Navy, one in New Guinea and the other in North Africa and eventually they were both in Italy. The B-24 bombers I flew as the bombardier, fought all over southern Europe. When I came home after flying 50 missions, I had lost a lot of weight because of the poor food and because we were flying every day. They sent me to a hospital in Florida, near where we are right now, to recover. It was a resort that had been taken over by the Air Force, and it is now a resort again today. Then, I was sent to Denver as executive commander of the School Squadron until the war was over. I came back to Chicago, took my uniform off, got some civilian clothes and went directly to the University of Michigan, where I eventually got my degree from the business school.
INTERVIEWER: Did you get involved in athletics during your school days?
HAAS: Believe it or not, I got into fencing at the University of Chicago, and I was a pretty good ice skater. I used to ice skate almost every afternoon during the Chicago winters.
INTERVIEWER: What was your favorite subject in high school?
HAAS: My favorite subject was English literature. I had an English teacher who was really superb. I just loved English literature. When I went to the University of Chicago, I took a survey course in the humanities. I read Herodotus and Thucydides and Gibbons' The Decline and Fall of the Roman Empire and much more. I got a very good background in historical writing and, to some degree, history.
INTERVIEWER: What did you intend to major in when you went to the University of Chicago?
HAAS: I had no intent at all. I was 18 years old, and all I wanted to do was live day to day and have enough money to buy cigarettes – I was a smoker then – and drink a beer now and then. I never thought about the future at that time.
INTERVIEWER: Did your family fall on economic hard times after your father died?
HAAS: No, luckily we did not. My oldest brother got married and got a job. My middle brother had a job. I went to college and my mother was a widow but had significant funds from insurance and my father’s estate. We didn't live like rich people. We lived very modestly, but income wasn't an issue. I always had a job when I wasn’t in school. I worked for a dry cleaners and I sold women’s shoes.
INTERVIEWER: Was it just understood that you would go to college?
HAAS: Yes, I think so.
INTERVIEWER: When you came home from the war, why didn’t you go back to the University of Chicago?
HAAS: At that time, I’d been living in Europe and led a free life. If I'd gone back to the University of Chicago, I would have had to live in the same apartment as my mother. I was 22 years old and did not view that as attractive. So I went to Michigan, lived in Ann Arbor, and came home during the summer. I loved Ann Arbor. I was on the G.I. Bill, which covered everything from books to tuition to housing. I got a scholarship at the university that paid me $100 a month. I thought I was a hog in a corn bin; you see, $100 a month in 1947 was big money.
INTERVIEWER: You majored in business?
HAAS: I did major in business. I knew from the start that I was going to go to business school. But, I also received a minor in fine arts because I didn’t want my education to be all business. I took philosophy, art history and other courses. I wanted to get a balanced education. I realized that if I only went to business school they would bury me with business stuff, which they did. By the way, I was in the same business school class as Roger Smith, a future president of General Motors.
INTERVIEWER: Did you like accounting?
HAAS: No, I didn’t like that at all.
INTERVIEWER: Was your favorite course marketing, perhaps?
HAAS: No, surprisingly it was not. I took only one course in marketing. My favorite course was economics. I loved economics. I had great economics teachers.
I graduated in 1948 with a Bachelor of Business Administration degree. They wanted me to go on for another year. I had a scholarship so it would have cost me nothing. I was 23 at the time but felt old because most people graduated at 21. So I decided to go to work instead.
INTERVIEWER: What did you do next?
HAAS: Well, I spent that entire summer after graduation courting my wife. We had met earlier. She came up to Michigan and we spent the last school year together. We spent the summer swimming in Lake Michigan and sunbathing and playing baseball. As the leaves started falling off the trees, I said to myself, “You need a job.” By the way, there was no recruiting at business schools in those days.
HAAS: None. Zero. Companies didn’t understand recruiting at all. I got a job at a steel refinery in Whiting, Indiana, inspecting the blast furnaces. My job was to put on safety shoes and a mask and a helmet and go around the factory checking the furnaces. They left a small hole in the side of the blast furnace with clay in it. You took the clay out and looked inside, and then you put the clay back in. The problem was that some of the furnaces would build up so much pressure they’d blow the clay out, and you’d see it coming across the floor at you. Not often, but occasionally. I didn’t like that idea, so after spending six months there, I went to work for Esquire magazine.
INTERVIEWER: This was in Chicago?
HAAS: Yes, it was in Chicago. I worked at Esquire for about a year, then spent about three months working for Coronet Magazine, a pocket-sized magazine owned by Esquire that competed with Reader’s Digest. I wrote subscription letters for Coronet and did newsstand promotions for Esquire. I found out I wasn’t going to make much money doing that, so I left and went to the Mitchell Manufacturing Company, which made window air conditioners.
I really got to know that business from the ground up because it wasn't much of a business in 1950 when I went to work there. Window air conditioning units for homes were still relatively new at that time. In 1956, Mitchell was sold to Cory Corporation. I went along with the new business, but none of the other executives did, so they made me general manager of the new business. I was with Cory for a couple of years until they closed the air conditioning business. Then, I went to work for Sealy.
INTERVIEWER: What did you do at Mitchell?
HAAS: When I first went there I wrote letters for the president as a ghost writer. That grew into a job where I became advertising manager, then I became marketing vice president. I was marketing vice president when the company was sold, which meant that I knew all the distributors. We sold through appliance distributors, and I knew all of them personally. I had visited every one of them and knew their mentality, their ups and downs and their potential. So, Cory made me general manager of the entire division.
INTERVIEWER: Was Mitchell originally a family company?
HAAS: Yes, it was. The president was a merchandising genius. In addition to the window air conditioning business, he was in the fluorescent lighting business, the floor and table lamb business, and other related businesses. I tailed along with him and learned about all of those businesses.
About a year and a half after the sale to Cory, they came to me and said, “We can’t finance the air conditioning business anymore. It’s too seasonal. We’re going to close it down.” I thought, “Well, here I am. I’ve got a wife and two kids. I've got a mortgage. I’ve got a car that I haven’t paid for. What am I going to do?”
I had a friend in Chicago at that time who had a horse. He knew that when I was a 17-year-old kid, I had been a wrangler in Colorado, so I knew how to ride horses. This friend got sick and couldn’t exercise his horse, so he asked me to ride the horse — just easy riding on paths. I did that for him, and as a result I met a much older man, who turned out to be a very substantial industrialist in Chicago. He owned a number of companies. Well, one thing led to another, and he asked me to take a look at this company for him. I ended up spending half my time doing free work for this multimillion-dollar executive, which was pretty stupid since I had no income. I looked at a number of businesses he was considering buying. He ended up making me a terrific offer. There had been a company called Crosley that was very big in washers and dryers. It went out of business, but he owned the Crosley name. His idea was to take the Crosley name, put it on air conditioners that we'd have somebody make, and I would sell them to all of my distributor contacts in the United States. But I had a feeling that I was going to be in way over my head, that this guy was going to squeeze me like a grape, and when all the juice was gone he wouldn’t even know my name. So, as a result, I said no.
But, I needed a job desperately. I had just had thyroid surgery and needed to pay the medical bills. That's when I went to work for Sealy, although I knew nothing about the mattress business.
INTERVIEWER: How did you connect with Sealy?
HAAS: Sealy had hired a management consulting firm by the name of Booz, Allen & Hamilton to help them get better organized. Among other things, they recommended that Sealy hire a sales manager. I was chosen by the consulting firm to be interviewed by the president of Sealy, a man named Earl Bergman. I still had bandages around my neck from the surgery and couldn’t button the top button of my shirt. I explained to him that I was perfectly fine and was just recovering from surgery. He was a nice guy, a wonderful guy, a great mediator, someone who kept the organization together - but who wasn't a creative genius.
Bergman essentially was the point man for three of the licensees who were the powerful people and had the votes on the board of directors. He sent me to these three licensees to be interviewed. I must have interviewed well because they hired me on the spot. So, I became the sales manager, but I didn’t know anything about the business. I guess they didn’t expect much from me.
I decided to go out and learn the business. I visited all 34 Sealy plants in my first six months. That was tough going. I was young or I couldn't have done it. I'd get on a plane, go to a plant, spend several days there, then I’d write a report about what I'd learned. Then, I would do the same thing again and again - 34 times in all. Nobody at Sealy had ever done that, but for some reason they let me do it. I've really got to give them credit for giving me the freedom to do it. I didn't really report to anybody during that time. The reports I wrote were for myself; nobody else read them. When I'd completed the plant visits, I knew more about Sealy than guys who had been there all their lives. I was just brimming with ideas, but I was not allowed to say much since I was a newcomer, and I was smart enough to know what my place was at that time. So, I was patient.
After a few months, I did put a proposal together that I thought would help unify and grow Sealy. It was an absolute failure. They thought that my ideas weren't very good, but they didn’t really nail me personally and I didn’t lose any credentials over it. I have to give credit to these people. They could have fired me, but they didn’t.
INTERVIEWER: What were your duties as sales manager?
HAAS: I mainly took care of sales promotions. My job principally was to put together quarterly newspaper ads that would get retailers to advertise Sealy. I had all kinds of contacts in Chicago and I knew the best layout and copy people. So we'd make up ad slicks and give them to the licensees, who in turn would give them to their dealers.
The industry at that time was dominated by Simmons. They probably had about 40 percent of the bedding market, and didn't need to do much of anything because they were sitting in the catbird's seat. Serta and Sealy were about the same size, and each had maybe 10 percent of the market. This is just a broad-brush estimate. Most of the business was done through furniture stores and department stores, and it was a profitable business for the retailers. We just needed to convince them to advertise the Sealy brand.
One of the accounts we were able to develop not long after I joined the company was Montgomery Ward. Much later, they went out of business. At that time, they were doing a very poor job with their furniture business, and a terrible job with their mattress business. They were based in Chicago, and their office headquarters were only a 5-minute cab ride from Sealy's. In the end, I virtually ran the bedding department for Montgomery Ward. The guy who ran it when I got involved was a Ward lifer with no creative ability, who just did it the way he'd always done it. They didn’t even realize that those efforts just weren’t good enough. I sort of lit a fire under them in bedding. I did all of the promotional planning and the advertising layouts, and even wrote speeches for the bedding guy when he presented his program to corporate. He never really liked me very much, probably because I was an aggressive kid, while he was about to retire and didn’t want to acknowledge that I had talent. Revamping the Montgomery Ward business gave me all kinds of status within the Sealy organization.
Thank goodness, I had a wonderful wife who raised our two kids. I wasn’t home a lot. I’d go home, eat dinner, then go back to the office and work till 11 or 12 o'clock. I was young and it didn’t bother me if I got only four hours of sleep at night. I got to the office at seven in the morning if I had a lot of big programs to put out. I was enthusiastic about the business and I needed to succeed. I had to succeed. I couldn't see any alternative.
INTERVIEWER: What was the mattress business like when you first joined Sealy?
HAAS: There were probably 600 or 700 mattress manufacturers in the United States at that time. Most of them were small independents that made private-label bedding for nearby retailers. Mattresses are bulky, and you couldn’t ship them more than 150 or 180 miles and make any money. It cost too much to keep the trucks on the road, and the margins weren’t good enough. Sealy, Simmons and Serta could have national accounts because we had plants around the country, but most smaller plants could only serve local markets.
The average price retailers would pay when I went into the mattress business was between $18 and $22. The top-selling mattresses were $29.95 and $39.95 at retail. Today, you've got mattresses retailing for $2,000 and more. It was a different game then. During the Depression, people bought foundation spring units that were lifetime guaranteed and that were all metal without any covering. Right after World War II, the box spring became popular. They were the same springs you got before, only with a wooden bottom base and covered with cloth. They were generally lousy and poorly made. All the attention was given to the mattresses. Simmons soon began to advertise coil counts, claiming the more coils you had in the mattress, the better it was, which is absolute nonsense. The more coils you put in a mattress, the smaller the coils are, and you gain nothing in terms of effective support. Many furniture stores, especially the smaller moms and pops, wouldn't display bedding on their floors. You'd call on them and they'd say that if anybody ever comes in to buy a mattress, they'll call you and buy it from you. They wouldn’t put a mattress on the floor.
INTERVIEWER: Weren't department stores strong in bedding at that time?
HAAS: They were somewhat strong in bedding. They ran ads as long as it was your money, but they didn’t spend their own money. They sent stuff back to you that people would send back to them. They would cheat you on the count of the number of mattresses you delivered. They sent you a check to pay your bill and wouldn’t have the check signed so they could float the money for another 20 days while you argued with them to get the check signed. I can tell you stories about department stores you wouldn’t believe. You delivered the mattresses to Bay 27, which is where they told you to go, then said it should have been Bay 28 so that will cost you $3 a mattress. It was a cheater’s game with the department stores, certainly, and with some furniture stores.
INTERVIEWER: Did you change the way Montgomery Ward displayed bedding?
HAAS: We certainly changed the way they featured it and we changed the look and the labels, which were all private labels. The Sealy name wasn't on the labels. Montgomery Ward started to do a lot more bedding business. And then, they put it in their mail-order catalog and did really good business.
After we'd done several years of business with Montgomery Ward, we went to J.C. Penney. I made a presentation to the furniture and bedding buyers at J.C. Penney, and we started selling them. J.C. Penney was a train wreck. They didn’t know how to sell bedding. Although it was one company, they acted like two companies. The people on the West Coast bought for themselves, and the East Coast people bought for themselves. If both happened to buy the same thing, we'd have to create model numbers so they didn't know they were buying the same thing.
Let me tell you how we got the Sears business, which happened long after Montgomery Ward and J.C. Penney. By then I had become president of Sealy. My office was on the fourth floor of The Merchandise Mart in Chicago. I could look down Franklin Street and see the Sears building. I said to myself, “The only major account we’re not selling is Sears. I'm going to call on the vice president of furniture and bedding.” I phoned him and said, “Will you see me? I’m the president of Sealy.” He said he would, so I walked down the street to his office. The first thing he said to me was, “I wouldn’t put your bedding on my floor if you were the last bedding manufacturer in the world.” I said, “Why?” He said, “Because you’re a licensee company and I can’t be sure of what I’ll get delivered to the Sears stores all over the United States.” I said, “That’s not true. If we tell you we’re going to have 312 coils in the mattresses we sell you, that’s what you’re going to get.” He said, “How do I know?” I said, “All you can do is trust me.” He said, “I don’t trust you. Not only that, I don’t want to see you again.” So here's the vice president at Sears, which is the largest retailer of mattresses in the world, saying, “I wouldn’t buy a mattress from you if hell froze over.”
INTERVIEWER: Who were they buying mattresses from?
HAAS: Simmons, which wasn't a licensee company. I got back to my office and said to myself, “There’s something wrong here.” A few weeks later I called the guy up and said, “I’ve been thinking about our meeting. Would you join me at my club? I’d like to have lunch with you.” I belonged to a fine club in downtown Chicago. He agreed, so we met at the club and had a nice lunch. I said, “I know you don’t like Sealy. But would it insult you if I bought Sears' entire line of bedding and costed it out for you?” He said, “No.” So I did. We bought all their bedding, tore it open and did a cost analysis of everything we found.
I called him again and asked him to come to my office. He did, and I showed him what was in the beds and what it cost. I said, “Simmons is raping you. They claim this is a 312-coil mattress. It’s only a 308-coil mattress. They must think you’re the dumbest people in the world.” This made him mad.
I waited another month. I called him and said, “I’ve put together a Sealy line that I’d like you to look at. I’m going to give you the costs on it. Your costs, not our costs.” He came over and looked at the line. He looked at the way it was made. He looked at the tailoring. He looked at everything and said, “I’m calling the mattress buyer in from his vacation.” I thought, “Holy mackerel! This is the end of our chances. Calling a guy in from his vacation to look at a line of bedding is suicide.”
The buyer came in and looked at the bedding. Doesn’t say a word. I said to him, “Have you ever been in a springs plant?” He said, “No.” I said, “You and I are going to go to a springs plant next week. I’ll pick you up at nine in the morning from your office and we'll drive to the plant Sealy owns in Indiana, and you'll see how springs are made.” So, I took him down there and he was amazed. A springs plant is very different from a mattress plant, but I won’t get into that here.
When we came back from the plant, he said, “You guys really have got something here.” I said, “Yes, I think we do.” He said, “I’m not going to put Sealy Posturepedic in the Sears stores, but I’ll put you in our mail-order catalog.” I asked, “How much will that cost us?” He said, “A quarter of a million dollars for one color page.” On the spot, I said, “Yes.” I thought to myself that this would be the end of my job because they'd fire me for doing this. I went to the board and told them what had happened, and they didn’t bat an eyelash. The catalog came out and we outsold Simmons Beautyrest by 30 percent. From that point on we took all the business away from Simmons. To this day, Sealy has much of the Sears business.
INTERVIEWER: Was it a price differential that did it?
HAAS: No, it was a quality differential. And, it was availability. It was how closely we worked with them. It was an intimate understanding of their business. We knew the margins they needed. We built the bedding according to the margins they had to have. Of course, our offices were close physically, and we had a whole floor where we could set up their entire bedding line for them. We showed them what the next year’s line was going to look like in the stores. We'd price it out, give them the estimated sales, the gross profit. It was a complete business and merchandising plan.
INTERVIEWER: What do you mean?
HAAS: We would have our people come into the stores and help them sell bedding, and they wouldn’t even know they were from Sealy. So we really learned from the inside about what was happening at Sears. Sealy was on the way up, we were making very good money, and we had the opportunity to do this because Simmons was asleep at that time. Simmons had been number one for so long, they thought this little Sealy company couldn't do anything to them.
INTERVIEWER: Describe what Sealy was like when you joined it, and what its history had been.
HAAS: The history really goes back to Eli Whitney and his invention of the cotton gin in the late 18th century. It takes the cotton seed out of the cotton blossom. What's left is called long-staple cotton. But there's some cotton left on the seed. That's called linters, and it's often just thrown away. In the mid-19th century, a guy in Texas by the name of Daniel Haynes was a big cotton grower. He built a railroad from Houston to Galveston to ship the cotton to England, where the big textile mills were. The train had to stop in a little town on the outskirts of Houston to take on water. They put a cotton gin there. They didn’t want to throw the linters away, so they figured out a way to get the remaining cotton, the linters, off the seed. It would be put into a machine and made into felt. Haynes started making cotton-filled mattresses for his neighbors, and in 1881 set up shop in Sealy, Texas. He ultimately devised a way to compress long-staple cotton into a so-called air woven batt to produce a resilient tuftless mattress. He later invented machinery to mass produce this mattress, and received a patent in 1889. The mattresses became popular, and folks began referring to it as “the mattress from Sealy” or simply “the Sealy mattress.”
In 1906, Haynes sold the patents and machinery to a Texas company that adopted the Sealy trade name. The company changed hands and moved to Sugarland, Texas, where it caught the eye of a young advertising executive named Earl Edwards. He started advertising in national publications like The Saturday Evening Post and The Ladies Home Journal. I have copies of some of those early ads. In 1909, Edwards registered the Sealy signature as a trademark, and later came up with the slogan, “Sleeping on a Sealy is like sleeping on a cloud.”
Around 1920, Edwards saw the need to expand production. He made a key decision. Rather than build plants around the country, a costly proposition, Sealy would seek licensees instead. It worked. By the end of the '20s, there were some 28 licensees. In the early '20s, the folks in Sugarland, Texas for whatever reason, decided to get out of the bedding business. Edwards got the support of the eight strongest licensees, and they bought the rights to Sealy bedding for $150,000, with $5,000 down and the rest paid over 10 years. Using the royalty payments from the licensees, Edwards expanded national advertising, and in 1927 began advertising on network radio, including the very popular “Amos 'n' Andy” program.
The Great Depression hit Sealy pretty hard, but eight licensees survived. They managed to pay off all debts, purchase the corporation, which they named Sealy Inc., and appoint Earl Edwards president. Later, they decided that a licensee should serve as Sealy Inc. president, on a voluntary, part-time basis. The first was Harry Wolf of the Pittsburgh plant. Later, J.R. “Jake” Haas of the Memphis plant became president. I'm in no way related to him, by the way, but our common last name is certainly an interesting coincidence.
J.R. paved the way for important product developments that eventually became the Sealy Posturepedic innerspring mattress in the early '50s. Earl Bergman, from the Cleveland plant, became the corporation's first full-time, paid president in 1948. The '50s were a time of major product developments and growth, with sales jumping from $9 million to $48 million. Three Canadian licensees were added. By 1960, the Sealy Inc. staff had grown to 26 people, including me as sales manager, thanks to the recommendation of Booz, Allen & Hamilton. Sealy also began advertising on network TV, again the first bedding company to do so.
So when I joined Sealy, I was part of a relatively small central staff. There were people in manufacturing, sales, accounting and national accounts, as well as the president and the secretary. We were like a consulting company to the licensed plants. We didn’t make anything.
INTERVIEWER: How could you keep an eye on all the licensees?
HAAS: Sadly, we couldn’t. We had to be the unseen presence. If they didn’t toe the line, we could take the license away from them. When I became president, they looked at me as someone who was uncompromising. If they did it right, they’d never hear from me. If they did it wrong, I’d give them three warnings. We had inspectors who went out and tore up the mattresses to see if they were up to specs. The more we kept an eye on them, the more they expected us to keep an eye on them. We had them pinned to the wall. If bedding was supposed to be so big and it was a bit bigger, we'd give them a warning. We didn’t monkey around. I wasn’t there for them to love me. I was there for them to respect me and make sure they did what Sealy Inc. thought they ought to do. They were all making so much money as a result of what we suggested they do, that really they didn't complain much.
INTERVIEWER: Weren't the licensees making bedding other than Sealy?
HAAS: Yes, sure they were. They could make their own brands, or private-label brands for select retailers. But that wasn't a problem because the same bed without the Sealy label got them about $10 less. So they didn’t want to make the private brands unless they absolutely had to.
INTERVIEWER: What kinds of assistance did you offer the licensees?
HAAS: We offered them manufacturing assistance, marketing assistance, accounting assistance, quality control assistance and engineering assistance. We designed all the new factories. We had an engineering department that would lay out the plant, based on the number of units to be produced in a day. In accounting, we had the most sophisticated computer program in the industry. I had a whole computer department with programmers.
When I started, Sealy was doing $48 million in annual volume. When I left Sealy, we did $550 million worth of business annually. We were in Korea, Japan, Australia, South Africa, England, Mexico, Canada, the West Indies, Antigua and Jamaica. We had quality control people, sales promotion people, advertising people and buyers. We had everything that a national office should have.
By the time I left, Sealy Inc. had bought 15 of the licensees. Corporate was doing about 25 percent of the total volume.
INTERVIEWER: After serving as sales manager, what was the next step in your career at Sealy?
HAAS: I was made marketing manager, which gave me control over three departments – sales, sales promotions and advertising. Then, I became executive vice president, which was the equivalent of being president, since I ran the whole Sealy Inc. company without a president. There was a chairman of the board of directors, and of course we talked among ourselves and I answered to the board. But I effectively ran Sealy Inc.
INTERVIEWER: What was the composition of the board at that time?
HAAS: The board was comprised of 14 licensees. All of them knew their business better than I did. All of them knew their costs and profits, but they understood what they got from Sealy, Inc. which was something they couldn’t get on their own. I was a member of the board, a voting member, but I also acted as a servant to the board. In a sense, the board could tell me what to do if they wanted to, and I did it.
INTERVIEWER: After you became president, what changed?
HAAS: Not much changed when I became president, mostly just the title. I still ran the central office and answered to a new board—that was made up of outside directors. Then, I moved our offices to The Merchandise Mart, where we had plenty of space and we could expand the departments and give the licensees more service. We did this all out of the royalties paid by the licensees. We didn’t go to a bank and take out loans.
INTERVIEWER: So you were operating strictly on the royalties?
HAAS: Yes, exactly. Later on, Sealy Inc. made a small profit on a springs plant. That plant originally was owned by the licensees. When the springs plant president retired, some of the licensees wanted to sell the plant. I said, “No, I've got a better proposition. Let's merge the springs plant with Sealy Inc. There won't be any capital gains taxes because it’s a merger within the same company and its non-taxable.” The board agreed.
INTERVIEWER: When did this happen?
HAAS: This happened in 1964.
INTERVIEWER: In essence it was a small reorganization wasn’t it?
HAAS: Yes, it was.
INTERVIEWER: Did you begin adding licensees?
HAAS: Yes, we did, but only overseas and never in the United States. We were interested in shrinking the number of licensees in the United States if we could, or merging them, so that we had fewer plants instead of the 34 plants that we had at that time.
INTERVIEWER: How successful were you at that?
HAAS: We were pretty successful. I wouldn’t say very successful.
INTERVIEWER: So you were able to shed some of the licensees?
HAAS: Some of the licensees had more than one plant. The Chicago licensee had a plant in Grand Rapids, Michigan, and one in Wisconsin. They closed the Grand Rapids plant. We closed plants in Louisville and Atlanta because we didn’t need them. When we put the right equipment in a plant, we could make more beds and ship further, so we could shut down some plants. It got to be a better-run business because I had good people. I hired good people so I could run the company and could trust that they would be successful.
INTERVIEWER: Who were some of your first hires that helped you grow the company?
HAAS: Michael Kaplan, who worked for our auditing firm. I believe he was 27, and he was very bright, so I brought him in as Director of Administration. He kept the books perfectly. I had had lots of trouble with the earlier office manager when the auditors came in at the end of the year to look at the books. There also was a guy by the name of Dick Rowe, who I didn't bring in, but who was a low-key, brilliant manufacturing guy. I made him head of the manufacturing department.
We had the best machinery at that time, better than anybody else. I used to go to Switzerland and buy machinery that you couldn't get in the United States, and I’d buy out the plant for five years, so they couldn’t sell the equipment to anyone else. We had a big lead on all the U.S. manufacturers. Dick Rowe was absolutely great, and ended up being general manager of all of our plants.
Before long, I had a vice president running the plants. I had a vice president of finance, a vice president of data processing, and a vice president of marketing. We had a meeting every Monday morning from nine until noon. We all knew what was going on, and from that point on, I just let them do their jobs. If they had problems, it was my job to help solve them.
INTERVIEWER: It sounds like most of your power within the organization was the power of persuasion. You had to sell your ideas to the licensees and to your staff. So, you couldn't just dictate.
HAAS: That is absolutely true. After a while, when you've had a number of successful undertakings, you don’t have to fight that hard. My advice to those we didn’t hire was to go out and get a job with a competitor. Some of them did. I didn’t want anybody but the stand out employees. I didn’t want second-raters.
INTERVIEWER: How did you evaluate their performance?
HAAS: I evaluated their performances by how well they got along with the licensees, what their selling ability was, their reasoning, their ability to talk, how they presented themselves, and what I sensed their loyalty to the company was. They had to be a 112 percent Sealy person to make it. Without that, they were a dead duck. If an employee was just there observing, they were gone.
INTERVIEWER: Would you describe yourself as a workaholic?
HAAS: No, not really. I worked hard, but I also had a duty to my family. I went home every night for dinner. As I grew more mature, I didn’t have to go back to the office at night. When there was no crisis, I didn’t hang around. I bought this house down here in Florida in 1974. Why? Because my brains were getting so scrambled with all the problems that were happening in the world and in Sealy. I used to come down here sometimes by myself. I’d go sit on the beach, smoke a cigar for an hour or so, and feel like I had been born again. I was getting ripped to pieces with litigation and God knows what else.
INTERVIEWER: What were the big headaches that you had to deal with?
HAAS: I had to deal with the Ohio plant group, who were constantly challenging the parent company, and who were already buying out some of the other licensees. We put the Ohio group under a microscope, and if they stepped one-hundredth of a centimeter off the beaten track, we would come in with a bulldozer. This was a huge battle within the company. I think the Ohio guy spotted me as a winner early on, and he called me to have lunch with him. He said to me, not directly but implicitly, “I’d like you on my side.” I said to him, “I’m not on anybody’s side. I’m on Sealy’s side.”
INTERVIEWER: You’re talking about Ernie Wuliger?
HAAS: Yes, I am talking about Ernie. He was one of four younger licensee people who, in the late 1950s, helped to bring in the management consultants Booz, Allen & Hamilton. They said to the company, “Sealy is going nowhere with the licensees running it. We've got to put a more effective central organization together.” Booz, Allen & Hamilton agreed, and recommended that a strong central staff be created. As I've said, they really were the people who recruited and hired me.
INTERVIEWER: Ohio Sealy was a long-time Sealy licensee that thought Sealy Inc. wasn’t doing its job?
HAAS: Ernie Wuliger’s father was a Sealy licensee. During the '30s when things were terrible and other licensees were going out of business, they were just scraping by, although that was doing rather well given the Great Depression. Ohio Sealy and the Wuliger family, along with three other licensee families, were really the hard working, bright, central families that kept Sealy alive through about ’59, and maybe even to ’67. After that, Ernie Wuliger had a falling out with his buddies in the three other families. He withdrew from any administrative involvement or any creative thinking about Sealy Inc., and was strictly running his own company, which was then called Ohio Mattress Company. He laid low until about 1967 or ’68. I had a relatively OK relationship with Ernie in the beginning because he recognized that I was working hard for the company. Ernie was involved with Sealy for about the first six months after I became president, then he dropped out.
Ernie was very bright. He eventually died of a brain tumor. He really never was able to savor the satisfaction of winning the litigation. I respect him for his intelligence and his aggressiveness, but I didn’t respect him as an individual. I did not like his business judgment. I didn’t like the way he operated. During our legal fight, I was like Caesar’s wife, meaning I was absolutely pure and pristine, because I knew that I was under a microscope, and these people were waiting to catch me doing anything even remotely out of line. I wouldn’t even use company stamps on my Christmas cards. I bought the stamps from the company.
INTERVIEWER: Why do you think he became so antagonistic to you and Sealy Inc.?
HAAS: I think it was because he didn’t trust himself, let alone anyone else. He thought Sealy Inc. was a low-class company with inept people, and Sealy got what it deserved. When I was there, that simply wasn’t the case. Sealy was a high-class company in the mattress business, and I believe it still is today. I think Larry Rogers, the current president, is a really high-class guy. I say that even though I’ve been to Sealy only a couple of times since I left 25 years ago, and I have no contact with him.
INTERVIEWER: What happened with the other three licensee families that brought in the management consultants?
HAAS: They didn't follow Ernie. They stayed involved with Sealy Inc., and spent a lot of time helping me, giving me guidance, letting me know that somebody cared about what was happening.
INTERVIEWER: So the board and the licensees were generally supportive of you?
HAAS: They were, or they would have dumped me. I knew that. I wasn’t arrogant, but I wouldn’t be intimidated. I could always get another job.
INTERVIEWER: As you mentioned, Sealy had tremendous growth under your presidency, from $48 million to $550 million in annual volume. Rapid growth is one of the hardest things to manage. Some furniture companies have grown tremendously, then collapsed.
HAAS: That usually means they committed suicide. They spun out of control.
INTERVIEWER: How were you able to manage Sealy's growth?
HAAS: I just did the best I could and tried to use my best judgment. I have no good answer to that question.
INTERVIEWER: Was your top goal to grow the business?
HAAS: My top goal was to buy enough licensees and make them integrated divisions of Sealy, so that we could eliminate the antitrust problems we had with the federal government. I also worked to counter Ohio Mattress's efforts to buy the licensees. They already had bought some of them before I came on board. They had the resources because they were the biggest Sealy licensee. The government was the lesser enemy and Ohio the bigger one. Anything we did, Wuliger took us to court. He had eight lawsuits against us at one time.
Now, let me tell you about the federal antitrust issue.
INTERVIEWER: When did it first come up?
HAAS: The federal antitrust issue came up in 1961, not long after I joined the company. The Federal Trade Commission did an extensive study of the mattress industry and had published a thick report saying the licensing system was legal and good for the American economy. But the Department of Justice disagreed with the FTC, and in 1961 the Department of Justice filed a lawsuit against Sealy under the antitrust laws. We went to trial several years later in federal district court in Chicago.
INTERVIEWER: What was their contention?
HAAS: Essentially that the licensing system, which included exclusive sales territories for the licensed plants, amounted in practice to price fixing. We had what was called suggested retail prices, and they said they weren’t suggested at all, that we enforced those suggested prices. The Department of Justice presented its evidence, and Sealy asked the Department of Justice for a summary judgment, meaning the government hadn't proved their case, and the judge ruled in our favor.
The Justice Department decided to appeal. In those days you didn't have to go through the Court of Appeals if you were the Department of Justice. So the Sealy case went directly to the Supreme Court. Both sides wrote briefs, and the Supreme Court heard the case in 1967, on the day after I was elected president of Sealy. I rushed to Washington to hear the case being argued. One of the justices asked really good questions, and I thought, boy oh boy, we’re going to win this one. Turned out he wrote the majority opinion against us. It essentially said that Sealy was an aggregate of competitors who were fixing prices and allocating territories, and that was illegal under the Sherman Antitrust Act.
INTERVIEWER: Was any other bedding company involved in the case?
HAAS: No other companies were directly involved. The Justice Department's lawsuit was solely against Sealy, probably because we were the biggest bedding licensing company and presumably had the funds to defend ourselves. But we were really defending all of the bedding licensing companies. None of the other companies gave us a nickel. If I told you how much the litigation cost us, you wouldn’t believe it. It was astronomical, even back then. But here's the kicker: The costs of litigation was tax deductible and we were making good money, so in the end the federal government paid for it. And here's the other kicker: About eight years later, the Supreme Court of the United States, on its own motion, abandoned its decree in U.S. vs. Sealy, saying it was wrong.
But in 1967, with the Supreme Court ruling against us, in effect, the licensees were really shaken. They realized they could lose their sales territories, and they didn’t know what to do. I realized this was an opportunity to get something put into the licensing contracts that would give more power to Sealy Inc. and give me some ammunition against Ernie Wuliger’ s attempts to buy the licensees. What I did was add a right of first refusal to the contracts. So if you were a Sealy licensee and Ohio made an offer of, say, $10 million to buy you, Sealy Inc. could give you $10 million, and Sealy Inc., would own your business.
The battle really began in earnest at that point. Ernie tried to use the Sealy name for his company. We went to court and got an injunction against him. He had to use the name Ohio Sealy. I myself would never have let him use the Sealy name at all, but our lawyers said it was a compromise we needed to make. He continued to try to buy the licensees and I started using the right of first refusal.
INTERVIEWER: Where did you get the money to buy the licensees?
HAAS: I would finance about 90 percent of the acquisitions, and I had the rest of the money in the company. I was carrying about $25 million in excess cash because I never declared a dividend during the 19 years I was president. The licensees cried for that money but I never would pay a dividend because we had all this litigation against us and I wanted that cushion in case we needed it.
I let Ernie make a couple of acquisitions I thought were absolutely stupid, but I also made acquisitions using the right of first refusal. His objective was to acquire 51 percent of Sealy, reorganize the company, get rid of all the licensees, and become a big, publicly-owned company. Ernie filed an antitrust suit against Sealy Inc. in 1971. The case dragged on forever and was finally decided 15 years later. It was a near-total victory for Ohio Sealy; the court ruled we had to pay a $77 million award. Sealy Inc. and the other licensees couldn’t come up with that kind of money and were essentially forced to sell to Ohio Sealy. Of course, that meant that Ohio Sealy had effectively become Sealy Inc. Naturally, I decided to leave before I was fired. There was no room for two presidents.
So in the end, Ohio Sealy prevailed. I don’t want to go into any more detail than that. They got the company, and I left, and later went to work as a professor at the University of Chicago.
After Ernie got the company, he had a coronary, then brain cancer and died within 14 months. He had moved Sealy to Cleveland, Ohio then sold it to a venture capital company. It changed hands several more times and ended up moving to the High Point area. Not long ago, it was bought by Tempur-Pedic.
INTERVIEWER: After Ernie Wuliger died, did any of the subsequent owners approach you about coming back and running Sealy?
HAAS: No, they did not. They took their money and ran. I would never have gone back to Sealy anyway. I had done the best I could. By the way, I had merger agreements with all the guys who eventually sold to Ohio Sealy. They were balancing how much I would give them against what Ohio Sealy would give them, and they decided Ohio Sealy was the better deal. Well, that’s more than you need to know.
INTERVIEWER: Would it be fair to say that the licensing agreements that prevailed at Sealy until all this happened were just not a viable business organization?
HAAS: The licensing agreements were a viable solution from 1924 until about 1955. It essentially was the only way to operate if you wanted to be a national company. From about 1955 until about 1980, the licensee organizations continued to expand. Sealy grew and was number one. Simmons was number two because it was like a fly caught on fly paper. They couldn’t move. They were too frozen in their ways and the industry was changing.
After I left Sealy, Simmons also was bought and sold a number of times. Every guy that bought it called me and asked, “Will you come on the board?” I said, “No.” As a director I would have been paid $35,000 a year, but I didn’t want the headaches of being on the Simmons board. I was a Sealy guy. I did what I did. I got out of the industry, and I’m happy I got out of the industry. The industry was very good to me, but I didn’t want to go back in. It’s not as though my heart was set on the mattress industry. It wasn’t. My heart was set on doing the best I could for Sealy Inc.
INTERVIEWER: After you left, you became a professor at the University of Chicago?
HAAS: I joined the Graduate School of Business faculty at the University of Chicago two years after I left Sealy. A guy by the name of Ted Snyder, the former dean of the University of Virginia Business School, became the dean at the University of Chicago. Back when the U.S. vs. Sealy case went to the Supreme Court, he worked for the Department of Justice as an economist. When he came to Chicago, I introduced myself and he said to me, “Howard, I want to tell you that in my opinion, the Supreme Court ruling in U.S. vs. Sealy was wrong.” I said, “Oh great! Well, that doesn’t do me any good now.”
I’m old. I’ll be 90 in a couple of months. I’ve seen an awful lot in my life. Nothing is permanent. I would never have dreamed the mattress business would become the way it is today. What the furniture stores did by neglecting their bedding business was create a monster — the specialty sleep stores. I’m not a furniture retailer, and I know it’s a terribly complex business, but to let the mattress business go to sleep specialty stores to me is an abomination. It should have been kept in the furniture stores because it was such an important source of profits.
INTERVIEWER: Were the sleep specialists beginning to make inroads while you were still at Sealy?
HAAS: The sleep specialists were starting to make some headway. There was a sleep shop in Milwaukee run by a guy named Nat Bernstein, one of the earliest such stores. Sleep specialty stores were just beginning to flower. They have a connection with the manufacturer that the individual furniture store doesn’t have, and that covers who is carrying the inventory. It relates to the amount of sales promotion money.
Another monster in the bedding business today is push money, often called spiffs. It's what manufacturers pay retail salespeople to sell their better bedding. These payments have grown and grown, so costs have gone up, but they add no value to the product. They mainly give the salespeople in the stores a big incentive to encourage their customers to buy higher-priced bedding. The guy who owns the store loves it, because his margins are higher on the pricier stuff. The top of the line today in most stores is about $2,000 per set of bedding. When I was in the business, the top of the line was maybe $599.
They put more into the bedding today, so naturally it costs more. But a lot of that is bells and whistles that don’t do much other than attract a person’s eye.
INTERVIEWER: Do you think the sleep specialists make it more difficult to be a bedding manufacturer these days? Do they have more clout and thus can demand more?
HAAS: That’s a hard question to answer. There are a number of sleep specialty stores run by different companies. I see three major influences today. One is Sleepy's, the New York-based chain which is now in Chicago. The second is Art Van, the big Michigan furniture retailer which is now opening stores and sleep shops elsewhere, including Chicago. The third is Mattress Firm, the biggest sleep specialty chain, which is largely owned by Sealy. I don't know if Simmons has a chain or not, but Serta finances a chain that I believe is called American Mattress. Sleepy's is an independent. They are tough guys.
The big sleep specialty chains will go into a city and bomb it — open a bunch of small stores and advertise heavily. They make it very hard on the independent furniture stores. I wouldn’t blame the furniture retailer today for not wanting to be in the mattress business. It’s a dangerous business to be in, especially if you own the inventory.
Even the big furniture chains such as Havertys and Rooms To Go seem to me to be in the mattress business as a sideline. I think Rooms To Go has a good general formula. You can get good bedding there, but they don't show much of it. I've shopped their stores, and by and large, they had some pretty good salespeople and good merchandise. They advertise bedding every once in a while, but I think that's largely because they get free co-op advertising from the manufacturers.
INTERVIEWER: What do you remember about the furniture markets you attended?
HAAS: I hated the markets.
INTERVIEWER: What was your first market?
HAAS: I went to High Point, probably in 1959 or '60, soon after I joined Sealy. We showed our new line to retailers who didn’t really want to come and see it. They wanted to spend their time buying furniture and doing social stuff. They didn’t want to spend time with mattresses. You almost had to be a cowboy and lasso these people and haul them into the showroom.
INTERVIEWER: When you look back, were markets really valuable to Sealy?
HAAS: Well, we had to be there, but I hated it. After I became president, I quit going to markets. Markets were for salespeople, not for chief executives, as far as I was concerned. Most furniture company chief executives are marketing people, so they go to the market. I didn’t want to be at the market. I figured I had people who were smarter than me and that could take it at market. I couldn't take it. You started at seven in the morning and went to midnight every night with dinners, then went to drink with the guys. I didn’t want that.
Besides, the retailers didn't want to see me. They really didn't care that I was president of Sealy. They wanted to see the guy who supplied them, the president of their licensee. They looked at me a little like the guy who parks your car. It didn’t make any difference to me. I didn’t need any prestige from furniture retailers.
INTERVIEWER: Did you establish relationships with retailers that lasted for a good number of years and that were really valuable to you as Sealy’s CEO?
HAAS: Yes, I did establish those relationships, but only with four or five guys. I had a really good relationship with the Sears guy after I got that account, which I've told you about. I knew the president of Bloomingdale's pretty well. He had gone to high school in Chicago with my wife. Everyone wanted to be my buddy when Sealy was big.
My job was to talk to presidents. Presidents talk to other presidents. They don’t talk to sales managers. When I went to a department store, I talked to the president. I didn't talk to the head of the bedding department. Department stores are a strange lot. If you talk to the president, the sales promotion manager and the guy who buys the bedding know you’re OK and will buy from you.
INTERVIEWER: Department stores used to be big in bedding, but they've given away most of that business, right?
HAAS: Yes, they sure have.
INTERVIEWER: Who were the biggest customers of Sealy during your days? I assume Sears would have been one of them.
HAAS: Sears was number one. Macy’s was number two. J.C. Penney was number three. Montgomery Ward was big before it went out of business. Then, we had a number of chains, some of them really big, like Wal-Mart and Costco. I don’t remember them all, but when we dealt with a chain we had a separate, dedicated system. I had a national account manager in charge of chains, and we had special sales representatives that called only on the chains. All the plants would make and deliver identical merchandise to whatever store was nearest to them. We set up a computerized system. Any order we got by six o'clock at night was put into the computer, which printed out a work ticket for the plant. The plant would make the bedding the next day, and at five o'clock a truck would pick it up and take it to the store that night. We never carried inventory.
This is how we hurt Simmons. They carried inventory and we didn’t. We were turning our money over every day. We had substantially higher margins than our competitors who didn’t understand how to do this. It’s hard to do. I had an engineering department at Sealy of about eight people who laid out the factory's machinery and equipment, they determined how the bedding should flow through it, and they calculated how big the warehouse and shipping dock should be. We were always aiming to have no inventory.
I didn’t invent this system. The manufacturing people did. But I certainly saw the advantages of carrying little to no inventory and turning the money over quickly. I don’t think most of our competitors understood the idea of turning their money as fast as we tried to turn our money. If you’re an entrepreneur and you’re making a lot of money, you don't want it sitting in a bank. I had a person who every morning called the top 15 banks in the United States to loan them money, because I didn’t want any money sitting idle. I wanted it earning money somewhere else.
INTERVIEWER: Did you have major problems when you computerized?
HAAS: Oh, did we! We had a big problem, but not with the computer itself. We had moved into a new office on the 21st floor of a new building. We put in a computer room for our IBM computer, and it was gorgeous, with a raised floor. Then we discovered there wasn’t enough pressure to bring up a sufficient amount of cold water to keep the computer happy. It cost a fortune to put the pump in to get enough water. I'll never forget that. It was like waking up in the middle of the night and seeing a ghost. There just was no way out of spending that kind of money to make sure the computer system worked.
INTERVIEWER: Were the licensees with you when you computerized? Was that a headache for them as well?
HAAS: The licensees had to computerize on their own, but we had a group of computer people who would meet with them and show them how to do it. We were growing so fast that they had to computerize. We couldn't continue to communicate by paper and phone, which is how we used to do it. As I've said, I had good people that did it. I had the best people in the business and I paid them a lot. I think they liked working for a winner like Sealy.
INTERVIEWER: What kind of relationship did you have with your suppliers?
HAAS: We had a good relationship with the suppliers.
INTERVIEWER: Were you a big Leggett & Platt customer?
HAAS: We were a customer, but not a big customer, because we had our own springs plants — we eventually had three springs plants. We did about $50 million worth of springs business annually, but only sold to our licensees. We didn’t sell them to anyone else. Harry Cornell, one of the founders of Leggett & Platt, was a good a good friend.
INTERVIEWER: Did you depend on suppliers for a good deal of the other bedding components?
HAAS: Sure, we depended on them for ticking and other materials. Suppliers are always trying to get the highest prices they can, but we never had trouble with them.
We were the first bedding people to offer torsion-bar box springs. We went to Ypsilanti, Michigan, where Universal Ball Bearing Company made torsion bars for auto seats. We adapted their system to the box spring. It was a big step forward.
INTERVIEWER: Did you have a good research and development department?
HAAS: You bet we did! I had a Research & Development department in the most expensive space in Chicago. It was three blocks from our headquarters, because I wanted to be able to call them up and say, “Make a bed this way and we'll come and take a look at it.”
INTERVIEWER: How much of the flammability issue did you have to deal with during your tenure?
HAAS: We had a chief of engineering who became the expert on flammability for the National Association of Bedding Manufacturers, so we were very much at the cutting edge of flammability. We had to deal with all the California fire-safety regulations, and later the Consumer Products Safety Commission. We dealt with all of that. It cost our chief of engineering a lot of time and effort, but I myself didn't really have to deal with it. It was all handled by him and others on his staff.
INTERVIEWER: What do you think about the bedding warranties that manufacturers offer to consumers?
HAAS: I think they’re a fraud.
INTERVIEWER: Didn't Sealy have warranties when you were there?
HAAS: Yes, we had warranties, mainly because our competitors had them. They also were for a much shorter time period than they are now, when many companies are offering 15- or 20-year warranties. I really don’t know exactly how they read today, but I believe they are pro-rated after a year or two, so the manufacturer hardly ever pays much on the warranty.
But the main reason I believe they're a fraud is, there are almost no defects in bedding. Once bedding gets into a person’s home, the only so-called defects that occur are almost always the result of the person abusing the product. If they abuse the product, they deserve to pay to have the product repaired. Fortunately, there aren't that many people that misuse the warranty, so it's not really a big issue for manufacturers. Warranties are more of a sales tool for retailers than an expense. The really bad thing about these long warranties is that they make people think the bed is going to last 20 years or more.
I know that during my time at Sealy, we didn't have warranty problems. One time, a guy from Baltimore called me on the phone and said, “One of the coils broke and it scratched me on my leg.” I said, “Fine, we’re sending you a new mattress tomorrow. Go to the hospital and send me the bill.” I didn’t want to hear any more from him. We never got a bill.
INTERVIEWER: Speaking of consumers, did Sealy do any consumer research?
HAAS: Yes, we did consumer research multiple times. We did consumer research before anybody else in the industry knew much about research. When I got to Sealy, they had already done some research into what types of impressions women had about bedding — what they were looking for, what it meant to them and so forth.
INTERVIEWER: How did they do that?
HAAS: They hired an outside social science survey firm to do it.
INTERVIEWER: Did they have focus groups?
HAAS: I suppose they did have focus groups. I can’t remember. But later, we used focus groups all the time. When we came up with a new ad, we would show it to maybe five focus groups and analyze what they said about it. We ran a lot of ads on television and in national magazines.
INTERVIEWER: Most furniture companies have never done consumer research. They've depended on their retailers to tell them what consumers want.
HAAS: That's like putting your money in a hole in the ground as far as advertising goes. Retailers know how to sell merchandise but they don’t know how to build a brand. You don't build a brand by offering something that was formerly $1,000 for $650.
INTERVIEWER: Isn’t most bedding sale oriented?
HAAS: Absolutely, it is. But there is a balance between creating the brand and destroying the brand. You do both at the same time. You create the brand through national advertising. You destroy the brand by discounting. You increase the value of the brand by rewarding the salesperson on the floor when they say something nice about your line and sell the consumer.
INTERVIEWER: So Sealy did pay push money, or spiffs.
HAAS: There was no way we could not pay. It was part of the game. Sealy is just one member of a congregation that’s all doing the same stuff.
INTERVIEWER: When you joined Sealy, was it doing any national advertising?
HAAS: Yes, Sealy was on the Arthur Godfrey radio show. During the 1960s, he was famous on radio for having guest singers and so forth, and Sealy sponsored him. They didn’t do much national print advertising except for dollars-off advertising, which I cut out when I could. You don’t advertise dollars off nationally. You advertise how good the product is for you, and let the retailers say dollars off.
INTERVIEWER: When did you get into TV?
HAAS: We got into TV in 1964. Sealy was one of the first advertisers on “60 Minutes” on CBS, which is still on.
INTERVIEWER: Did you use an ad agency?
HAAS: We always had an ad agency — the same agency for 20 years.
INTERVIEWER: How did you decide how much money would be spent on advertising?
HAAS: It was a percentage of the royalties we received from the licensees. Some of them griped and I just listened.
INTERVIEWER: Did the nature of advertising change significantly during your time?
HAAS: Yes, the nature of the advertising changed profoundly. We always were advertising, essentially to women, first with four-color, full-page ads in women's magazines, mainly in so-called shelter magazines. But that was before TV delivered the kind of audience that it did. By the time I left, we were spending 80 percent on TV and 20 percent on print. In 1970, '71, and '72 we ran a golf tournament in Las Vegas that put the LPGA on network television for the second time. The Dinah Shore tournament was already on TV. But our tournament had a pro-am format, and we got the stars from Hollywood to come play with the ladies. We brought customers in from all over the world to this golf tournament, and it added more prestige to Sealy. It was really great. But we cut it out because it was too expensive.
INTERVIEWER: Did you coordinate your print and TV advertising?
HAAS: Absolutely we coordinated it. It was hand in glove. We also did trade advertising. I did enough trade advertising to the point where they would write articles about us, but I didn’t spend a lot of money with them. I realized the editorial coverage was so important in the trade that we had to run trade ads. Initially, I used Home Furnishings Daily or HFD a lot. Nobody else in the mattress industry ever used HFD. Later, I advertised in Furniture/Today. Incidentally, I wrote a column for about two years for HFD after I left Sealy. I had the time and things I wanted to say that I thought were of some importance. I volunteered to do it and they accepted.
INTERVIEWER: Since you retired from Sealy, have you maintained relationships with old associates?
HAAS: Oh, sure I have. Ed Lilly, who was president of Serta for many years, was a former employee of mine who handled J.C. Penney and other accounts in New York. I had the highest regard for him. When Sealy was bought out by Ohio Sealy, he became president of Serta. All the presidents of Serta came from Sealy — Ed Lilly, Roy Unger, Zenon Nie, and Bob Sherman. Virtually all of the presidents of the major mattress companies worked for Sealy at one time. I've mentioned Larry Rogers, the current Sealy president. He’s a Canadian and he ran the western Canadian operation for me for a number of years, then I made him president of the Canadian company.
Gary Fazio, now Simmons president, was a skyrocket in the industry. Gary ran the Pittsburgh operation for me. I once went with him calling on accounts. He was about 30 at the time, and as we were driving to the airport, I pulled the car over, stopped, looked at him and said, “Gary, you are one smart guy. You’re so bright you scare me. But if you want to be president of Sealy, which I know you want to be, slow down what you’re doing. You’re not going to like it, but it’ll give you a certain amount of class that you're missing.” That was that. He never said a word to me.
I continued to follow his career after I retired, and when we moved to Florida I went to a local sleep shop and bought some bedding. It was one of a chain of 100 or so sleep shops he was running at that time. I asked the lady who sold the bedding to me, “Do you have Gary Fazio’s e-mail address? I’d like to send him an e-mail and thank him for the great job you just did.” She said, “Yes,” so I sent him an e-mail. I get an e-mail back from him saying, “Your bedding will be delivered this afternoon and it is gratis from the store, and thanks for all you’ve done for me.” I thought that was very classy. I'd already paid for the stuff, by the way.
INTERVIEWER: Were you trying to mentor the key people you hired in any particular way? Did you have a theory or philosophy of mentoring?
HAAS: No, I didn’t. With me, what you see is what you get, whether I'm with an employee, a licensee or whoever. I don’t put on airs. I’m not a big shot. I don’t try to be a big shot. I don’t need it. I know who I am. I would gently criticize someone if they did something wrong. If they did something right, I would tell them I liked it. It was up to them to follow me.
INTERVIEWER: Do you think you really can teach leadership?
HAAS: Yes, I think you can teach leadership. I've written and published a book on leadership. I've taught classes for 25 years on leadership at the University of Chicago's business school. You can discuss the things that people need to do, what they should think about doing in order to improve their leadership skills.
INTERVIEWER: Tell us about your teaching.
HAAS: When I left Sealy, I consulted with a number of companies but that wasn’t enough. An economist named Jim Laurie was on the Sealy board of directors for 12 years. He was a distinguished professor at the University of Chicago and he got me connected to the right people there, and I was invited to be a lecturer. Later, I was made a senior lecturer and then an adjunct professor. I ended up teaching there for 25 years.
I taught two courses — business strategy for about five years and then leadership. There weren’t any leadership courses taught in business schools at the time when I started teaching. I put together the first leadership course that was ever taught in a graduate school of business. Academics from all over the country wrote me for copies of my syllabus. Today, leadership is the number one subject that business schools want to feature. I feel pretty good about that.
INTERVIEWER: What are your core ideas about leadership?
HAAS: There are three. First off, you can’t lead a poorly managed company. The company needs to be well-managed. The reason is that good leaders will take a company into territory that you and the employees have never been to before, and you need the support of good managers throughout the company to carry you through the two to three years that it takes to change the culture of the company and the direction in which it is going. So, unless you have a solidly managed company, you cannot have a well-led company.
The second part of leadership is essentially that the leader has to conceptualize the future. It's where the company has never been. It could be a little step or a big step, but the leader takes people into the future, and to do that a leader has got to believe in him or herself. Leaders do that principally after they’ve thought deeply about who they are and where they’re going. One of my central themes is that until you realize you’re going to die, you do not have enough insight into living, to understand that it's a time-limited proposition and you do not have forever to make up for your mistakes.
My view of leadership is essentially that you need to be in touch with yourself. You need to understand that people are not going to follow you because you say they should follow you. They’re only going to follow you when they believe you are taking them to a better place. They may say to you that they are following you, but that doesn’t mean they truly are.
The reality is that you don’t have forever, and you need to have enough understanding of yourself to understand other people, so you can take them somewhere that they’ve never been.
The third part of my leadership concept is that the outcome of leadership is based mainly on the quality of the followers. A leader has to inspire the followers to truly believe he’s taking both them and the company to a better place. When that happens, the leader doesn’t really need to be inspirational, because the followers become the leaders. The top person can almost become invisible, making little changes here and there, and getting the followers who are closer to the problems than you’ll ever be as a leader to solve the problems themselves. That, in a nutshell, is my leadership theory.
INTERVIEWER: Who is the best leader you’ve known in your business career?
HAAS: I think Nat Ancell of Ethan Allen and Gordon Segal of Crate & Barrel are two of the outstanding leaders in the furniture business. The conceptualization of Ethan Allen as the store that would help to create a beautiful home was brilliant, and so was the execution. The same is true for Crate & Barrel, which I think is by far the best-presented store today. That really rests not on Gordon, who is essentially a real estate man, but initially on his wife, Carole, then, after she left the business, on his executive team.
INTERVIEWER: Nat Ancell is a legend in the industry, of course. Did you have a close personal relationship with him?
HAAS: It was more a business relationship. If Nat had problems that he wanted to talk with me about, I’d get on a plane and go to New York and talk to him.
INTERVIEWER: Have you and Gordon Segal been close?
HAAS: I have a whole chapter in my book about leadership by Gordon. He came to my class and lectured. I recorded the lecture, edited it and put it in the book. He wasn’t so sure about that, but I had already gotten a signed release from him. If he would have said to me, “I want it out,” I would have taken it out. But he never did. He’s a very bright man and a high-quality person.
INTERVIEWER: How did Sealy deal with the ups and downs of the economy and business while you were there? Was that a major challenge?
HAAS: You bet the economy was challenging. Every business has its ups and downs, including the mattress business. It goes up and down with the economy. I never cut staff, which is how lots of companies deal with a downturn. Of course, I didn’t have that much staff to cut. My employees were busy all day long. Maybe I cut some advertising budgets. I don’t remember for sure.
INTERVIEWER: What involvement have you had with civic and charitable organizations?
HAAS: I currently am on the visiting committee of the Art Institute of Chicago in the print and drawing department, and I have been since 1976. Among other things, I am a collector of works on paper, and have a somewhat significant collection in my home in Chicago. I’m on the visiting committee of the Oriental Institute, which is a part of the University of Chicago. It's a distinguished school and museum, one of the three leaders in the world on collected objects from Egypt and the Middle East. The New York Times has mentioned the work we’ve done in Afghanistan trying to reconstitute the museum there that was plundered by the Taliban.
I formerly was on the visiting committee of the School of Social Services at the University of Chicago with Lawrence Schnadig and Don Belgrad, his son-in-law.
There was an orchestra in Chicago called the Orchestra of Illinois. I was the president of that orchestra. I’ve been on the board of directors of the Jewish Children’s Bureau. I’ve been on the board of directors of the Boy Scouts of America in Chicago. I’ve been a scoutmaster of a scout troop. I was honored to attend the launch of Apollo XI, which took the first men to the moon.
INTERVIEWER: How did that happen?
HAAS: We were big advertisers in Life Magazine, and they had an exclusive contract with the astronauts to write their biographies. They invited me to go Cape Kennedy and so I went. I had a wonderful time. I experienced a world-changing event with front row seats.
INTERVIEWER: Was Sealy active in any charities?
HAAS: Yes, Sealy was a very charitable company. As the president of Sealy, several charities honored Sealy, in part to attract donations from other people and companies.
INTERVIEWER: Was Sealy affected by racial attitudes over the years?
HAAS: No, not really. We had union issues but not racial issues.
INTERVIEWER: What were your union issues?
HAAS: The unions wanted to run the company, and I thought I ought to run the company, so we had to come to an understanding about that.
INTERVIEWER: When you speak of union activities, you’re talking about unions at the factories?
HAAS: Yes, I am.
INTERVIEWER: Were most of them unionized?
HAAS: All of the factories were unionized. Sealy owned 15 factories at the end of my presidency, and those were all organized into unions.
INTERVIEWER: Were you able to negotiate contracts successfully?
HAAS: I didn’t personally negotiate. We had a labor department that negotiated for us. We made it very simple for the union. We gave them our best offer at the beginning. If they didn’t like it, we wouldn’t negotiate and would even close the factory and never open it again.
INTERVIEWER: Did you ever have a strike?
HAAS: Yes, we had several strikes.
INTERVIEWER: So you closed the factory?
HAAS: Yes, I closed the factory in Pittsburgh and never opened it again. I spent $2.5 million to build a new factory outside the jurisdiction of the union. They never bothered me again. I made it very clear to them that I wasn’t in the business of being the weakest guy in the bargaining group. Sealy wouldn’t join a bedding factory bargaining group. They had to bargain directly with us. Our first offer was always our best offer. They could negotiate until the cows came home, but they weren’t going to get any more.
Tough? You bet it was tough. We had enough factories so I could close one and ship from other factories into that area and never upset or sacrifice our distribution. The unions got to know that.
I had trouble with the machinists union in San Francisco, and that ended up in a very bad strike for a long period of time. I opened a new plant in Colorado and said to the strikers in San Francisco, “You've got one option. End the strike or I’m going to close the plant and move everything to Colorado Springs. You'll lose 150 jobs. You decide.”
Now, am I tough guy? Yeah, I’m a tough guy when I have to be tough. I’m really a pushover at heart, but not with the unions.
INTERVIEWER: You talked some about flammability. Were there any other government or environmental regulations that caused big headaches for you at the plants?
HAAS: No, flammability was about it. It was mostly stumbling around in the dark to start with regarding the flammability issue. California instigated it all, and their regulations essentially became the de facto federal rules. It’s a big deal today, but it wasn’t that big of a deal when I was around. It didn’t really bother our production. We knew how to make mattresses that met the fire-safety standards.
INTERVIEWER: So your major governmental problems were with the Justice Department and the antitrust lawsuit.
HAAS: Right, those were the major issues. The litigation was like swallowing kerosene. It was really tough, and so expensive. The lawyers were getting $500 to $600 an hour, and I had four or five lawyers dealing with the case. This was territory that had never been entered by anybody, and they didn’t know what the heck to say. It also cost me a lot of time and trouble personally. The lawyers were involved in the case, but not in anything else. I wouldn’t let them get involved in the company.
INTERVIEWER: You hired a legal firm to handle antitrust litigation, but never had a lawyer on your staff?
HAAS: I had one lawyer on the staff, but he was a low-level lawyer who handled trademarks and corporate issues. Antitrust law is changing all the time, so you’ve got to hire lawyers that are specialists and on the cutting edge of what's happening. The first antitrust lawyer I hired ultimately became the assistant attorney general in charge of the antitrust division in the Department of Justice. His name was Richard McLaren. When he went to Washington, there was a big, negative article on him in Fortune Magazine. I wrote to Fortune Magazine and got a copy of the illustration that was used with the article. It was a four-color illustration of St. George stabbing the horse he was riding instead of the dragon. I had it framed and sent to Dick, and he put it over his desk at the Department of Justice.
INTERVIEWER: Do you have any mementos like that from your career at Sealy?
HAAS: Well, I have a number of decorations from World War II. The one I'm very proud of is the Legion of Honor I received from the French government. It's for the invasion of Southern France on August 1, 1944, which I participated in as an Air Force bombardier.
INTERVIEWER: What do you consider the greatest challenge that faced the bedding industry when you were at Sealy, and what do you see as the greatest challenge facing the industry today?
HAAS: In my day, succeeding in the business revolved around what’s called interbrand competition, in particular among Sealy, Simmons and Serta, the three big “S” brands. The battle for sales and market share was fierce, but I think it really helped the entire industry to grow.
INTERVIEWER: How so?
HAAS: The competition, especially through the advertising we had to do, really helped popularize bedding, which benefited everybody, even the small guys. The competition especially helped popularize queen-size bedding, which pretty much became the focal point of the competition. In order to compete, we had to keep coming up with efficiencies in production that our competitors didn't have, and that certainly benefited the consumer. We all had to be efficient in order to stay alive. The margins were very narrow at that time.
The bedding business — other than Simmons, which was wholly integrated — was a remarkable business. It could only operate in the United States because there was a necessary level of honesty. The licensees could very easily have reported wrong numbers, which would have reduced the royalties Sealy and the other licensing organizations received. You simply can’t hire enough auditors to check the books of your licensees to make sure they’re not cheating you.
Today, the competition is quite different. It's no longer a fight between three fairly equal combatants. The holding company that owns the three leading brands is sitting there saying, “This is like a gladiator fight. We’ll put three gladiators into the coliseum and see who kills who.” I don’t think it’s good for the bedding business to have a dominant A and a trailing B and C brand. I think everybody needs to be on approximately the same level and competing to the best level that they can. I think it’s better for the industry and it’s better for the consumer.
INTERVIEWER: These days, they're even importing some bedding. I take it imports were virtually nil in your day.
HAAS: Right. There were no imports.
INTERVIEWER: Do you see any point in importing bedding?
HAAS: No, I don’t see any point in it.
INTERVIEWER: Low price, maybe?
HAAS: But the overseas governments are subsidizing the bedding producers, so their price doesn’t mean anything. In a free society with a competitive environment, price means a great deal. China has a kind of capitalistic operating economy now, but politics and the Communist Party really control what happens. There's lots of corruption. China’s got how many people? About three billion. We've got a little over 300 million, so China is 10 times bigger. The Chinese people have got to get up and eat every day. The government is going to have a big problem when the rural Chinese people realize that people in Beijing live like Europeans and they live like slaves.
INTERVIEWER: When Ohio Sealy succeeded in effectively taking over Sealy and you decided to leave, was that a particularly difficult time for you?
HAAS: I wasn't pleased, of course, but I wasn't depressed. I did the things at Sealy that I thought needed to be done, and that’s that. I’m introspective. I think deeply about things, and basically I know who I am. I think that’s important. I don’t need outside stuff to reinforce my identity. My identity wasn't totally tied to running Sealy. I realized when I was running Sealy as the president, there would come a time when I wouldn’t be the president, and it would be very dangerous for me not to keep my identity separate from Sealy. I’m basically an ordinary working guy who’s done the best he can. I’m not a big shot.
INTERVIEWER: What would you consider your greatest contribution to the industry?
HAAS: I hired the most talented people and let them do the work. I saw the future in a way that was good for Sealy, because I didn’t want to work for a second-rate company. I hired the people that could help me achieve my goals for the company. I also could conceptualize some of the things that needed to be done. I made a lot of mistakes. You can’t get to the future without making mistakes.
INTERVIEWER: You knew from the beginning that micromanaging wouldn't work?
HAAS: Yes, I knew micromanaging was the wrong way to go.
INTERVIEWER: How did you know that? Was it a gut feeling on your part?
HAAS: I think so. I don’t think I learned the dangers of micromanaging when I was in the appliance business. Some people may have thought I micromanaged, but what I did do is know what was going on in the company at all times. And, I didn’t have a lot of tolerance for mediocrity.
INTERVIEWER: You had to fire people.
HAAS: Actually, I fired only two people in my lifetime. It's the worst thing in the world to have to fire somebody. I believe I was mostly successful in hiring good people, but it’s always a crapshoot when you hire somebody new. I think I have a pretty good instinct about people.
In the end, we're all going to meet the angel of death. No matter how important you think you are, you can't bargain your way out of it. Just because everybody says “sir” to you when you go to work and you drive a Bentley and you’ve got a place in Palm Springs and a place in New York and a place somewhere else, you won't live forever. There's no place in life for arrogance, in my mind.
When I first got into the mattress business, everybody treated me like I was the servant in the men’s room handing out towels. It didn’t bother me. It didn’t bother me that they had so little respect for what I did. I didn’t like it, but status of others has never been that important to me. I always tried to treat everybody with respect.
INTERVIEWER: It says a lot about you that many of the leaders in the bedding industry today are people you hired and gave an opportunity to.
HAAS: I was lucky to hire good people throughout my career.
INTERVIEWER: Thank you for taking your time to do this interview. It's been enjoyable for me, and I'm sure it will be enlightening to the industry.