Industrialist Henry Kaiser Made Just About Everything His Business

Henry J. Kaiser, second from left, is joined by Oregon Gov. Charles Sprague, left, and President Franklin Roosevelt on a 1942 visit to the Kaiser Shipyards in Portland, Ore. (AP)

Henry Ford built cars, William Boeing built airplanes, and Cornelius Vanderbilt built railroads. But Henry J. Kaiser built just about everything.

The boy who dreamed of being a photographer ended up founding more than 100 companies that produced everything from dams to houses to ships, and the materials needed to make them. He even produced automobiles.

"He was always willing to take risks," said Lincoln Cushing, archivist at Kaiser Permanente Heritage Resources. "When he saw an opportunity, he took it."

(Courtesy of Kaiser Permanente Heritage Resources)
Henry J. Kaiser went from modest beginnings to become one of America's greatest industrialists. (Courtesy of Kaiser Permanente Heritage Resources)

Perhaps his greatest achievement was Kaiser Permanente, the world's first health care organization, which Kaiser created during World War II to keep his employees healthy and productive.

"He was a good-hearted guy, but all of his decisions were based on what was good for business," Cushing said.

Plus, he added, "If you have a workforce that feels you're treating them well, they're going to give something back."

Kaiser's life (1882-1967) spanned two world wars and a period of heavy investment in infrastructure that turned America into a global superpower. But there wasn't much in Kaiser's early life to suggest that he would join the ranks of America's great industrialists.

Kaiser was born in Sprout Brook, N.Y., the son of a cobbler. He quit school at age 12 to pursue photography, and by age 24 he owned his own business.

But Kaiser yearned for a bigger challenge. He got it when he met and fell in love with a young woman named Bess Fosburgh.

Going West

Fosburgh's father was a wealthy Virginia lumber baron who told Kaiser he could marry his daughter on one condition: that Kaiser move West, earn a good living and build a house for his future bride.

So the New York native packed up and eventually settled in Spokane, Wash., working in hardware stores and learning everything he could about the construction industry.

On his frequent trips to construction sites, Kaiser saw the need for better roads to accommodate a growing number of automobiles. Meanwhile, he had become successful enough in the hardware business to earn Bess' hand in 1907.

In 1909, Kaiser went to work in Spokane for a Canadian road construction company, which he took over five years later as it was going bankrupt. He quickly turned around the company and renamed it Kaiser Industries.

In the following years, Kaiser Industries built roads in California, Oregon, Washington and even Cuba. The company also built bridges, as well as dams in California and levees in Mississippi.

As the construction industry boomed in the Roaring '20s, Kaiser created sand and gravel companies to supply Kaiser Industries with road-building materials.

Landmark Projects

In the 1930s, his company played a leading role in the construction of some of the 20th century's biggest projects, including Hoover Dam in Nevada, the Oakland-San Francisco Bay Bridge and the Bonneville and Grand Coulee dams in Oregon and Washington.

It seemed that no challenge was too great for the enterprising Kaiser. But how did a photographer transform himself into a leading industrialist?

"In the 19th and early 20th centuries, the great technological breakthroughs -- the steamship, cotton gin, reaper, telephone, Otis elevators, Ford, the Wright brothers -- they're all Americans, none of them technically trained, and yet they all made these extraordinary breakthroughs," said Kevin Starr, a professor of history at the University of Southern California.

Like Henry Ford, Thomas Edison and other inventors, Kaiser had an "imaginative pragmatism," Starr said. "He could get to something, see that it could be done and find out how to do it by trying to do it."

"That kind of self-instructed entrepreneurialism was more characteristic of America at that time," he said.

Kaiser also knew he couldn't do it alone. He learned from books and from others, and he surrounded himself with knowledgeable and talented people, regardless of age, gender or race.

"He was good at understanding that a diverse workforce makes you much more competitive in a business environment," Cushing said, adding, "He was also really good at figuring out who to work with -- he hired people who were loyal and smart."

He also had a "tremendous faith" in young people, Starr said.

Father Of American Shipbuilding

They included A.B. Ordway, an engineer who was hired as the first employee of Kaiser Industries; Clay Bedford, who ran Kaiser Shipyards when he was in his early 30s; and Sidney Garfield, a young doctor who helped to establish Kaiser Permanente.

With Bedford's help, Kaiser became known as the father of American shipbuilding in World War II, despite never having previously built a ship. Kaiser Shipyards churned out nearly 1,500 ships -- including the so-called Liberty cargo ships -- during the war, more than any other shipbuilder in the U.S.

In 1942, Bedford supervised the construction of a 10,500-ton Liberty vessel in less than five days, the New York Times said in his obituary.

Kaiser Shipyards achieved this feat by using an innovative production technique that brought premade parts together and used huge cranes to move them into place, where they were welded together by "Rosies," or female workers, according to a National Park Service description of Kaiser's Richmond, Calif., shipyard.

This "allowed unskilled laborers to do repetitive jobs requiring relatively little training to accomplish," it said, adding that it opened up jobs to women and minorities.

But Kaiser's efforts weren't directed solely at making a profit.

He saw the toll that workplace injuries took on people hired to work on his projects. "The stink of that didn't fit well with him," Cushing said.

So Kaiser enlisted Garfield, who had devised a prepayment health insurance plan, to create a health care organization for Kaiser workers. This included setting up on-site clinics for work-related injuries.

In 1938, Kaiser offered employees the world's first prepaid health plan, and in 1942 he founded what would become Kaiser Permanente, which today is one of the nation's largest health maintenance organizations (HMOs).

"Having the health plan was crucial to helping his businesses be successful and winning the war," Cushing said, since many of the people left behind to work at home during the war were either women or those who were ill or infirm.

In 1948, he established the Henry J. Kaiser Family Foundation, a nonprofit organization that addresses the major health care issues facing the world.

"In the late years of his life, he was proud of everything he did, but the thing he says he was most proud of was building the health plan," Cushing said.

Kaiser died on Aug. 24, 1967. His New York Times obituary said that Kaiser Industries employed nearly 100,000 people making more than 300 different products at factories in the U.S. and 40 foreign countries. Among his many companies were Kaiser Aluminum (KALU), Kaiser Steel, Kaiser Cement & Gypsum, automaker Kaiser Motors, aircraft manufacturer Kaiser Fleetwings and Kaiser Broadcasting, as well as ventures into manufacturing household appliances and developing real estate.

Many of Kaiser's businesses eventually either collapsed or were sold off, which helps to explain why Kaiser today isn't a household name on par with Ford or Edison.

"He sort of lost his traction in the annals of American corporate history," Cushing said.

But, Cushing added, "He was a really good role model for how you do things in a socially positive way; not just amassing a lot of money. He tried to do what he felt was good for the nation, and not just good for Henry Kaiser."

Kaiser's Keys

Founded more than 100 companies -- from makers of materials, ships and homes to Kaiser Permanente, America's biggest managed health care company.

Overcame humble beginnings and lack of education to become one of America's greatest industrialists.

Lessons: No task is too great if you have a can-do spirit, surround yourself with talented people and treat others with respect and dignity.

"I make progress by having people around me who are smarter than I am and listening to them. And I assume that everyone is smarter about something than I am."

Related:

Mayo Brothers Built Their Clinic's Success On Dedication, Teamwork

Zaha Hadid Broke Barriers To Create Dramatic, Daring Architecture

Pittsburgh Titan Henry Clay Frick Was The Gilded Age's Man Of Steel