Grace, J(oseph) Peter, Jr.
Grace, J(oseph) Peter, Jr.
(b. 25 May 1913 in Manhasset, New York; d. 19 April 1995 in New York City), business executive who transformed a thriving family business into a multinational conglomerate in the course of a career whereby he headed a major U.S. corporation for nearly five decades.
Born into wealth as a son of Joseph Peter Grace and Janet Macdonald, J. Peter had two brothers and a sister. The family dynasty began after the Irish potato famine, when Peter’s grandfather, William Russell Grace, emigrated to Callao, Peru, where he secured a clerkship with a shipping company that mined and transported guano (bird dung, used as fertilizer) that had accumulated on offshore islands. He soon became a partner, and in 1854 he established W. R. Grace and Company and began shipping cargoes to North America. The company prospered, but for health reasons, Grace relocated to New York City in 1865. As a two-term mayor in the 1880s he accepted the Statue of Liberty from the people of France. In 1907, after his death, his son Joseph Peter Grace became the president of the firm and soon established the Grace National Bank (the predecessor of Marine Midland Bank) and the Grace Line passenger ship service. In 1928 Grace partnered with Pan American Airways to form Panagra, offering the first air service between North and South America.
Meanwhile J. Peter was growing up in Gatsby-style luxury in a Long Island mansion tended by sixty-two servants. He spent summers aboard the family’s 150-foot yacht, which had a crew of twenty-eight. He attended Saint Paul’s School in Concord, New Hampshire, from 1927 to 1932 and went on to Yale, where he earned letters in three varsity sports and excelled in polo and hockey. Upon earning a B.A. degree in history in 1936, Grace went to work for the family firm; he started his apprenticeship in the mailroom and was shunted from department to department until he became familiar with the entire operation. On 24 May 1941 Grace married Margaret Fennelly, a secretarial student at the Grace Institute, a school founded by the family, designed to provide lower-income young women with marketable skills. The couple eventually had five sons and four daughters. In 1942 Grace served as a lieutenant junior grade in the U.S. Navy. After his father suffered a stroke, he was appointed president of the company in 1945.
Eager to make his mark in the new technological environment and envious of the high profit margins of DuPont, Peter decided to take Grace into the chemical sector. This was a logical move since the firm was already involved in Chilean nitrates, fertilizers, insecticides, and other agricultural chemicals. In order to acquire the capital to implement this decision Grace took the company public in 1953. The infusion of new funds allowed the firm to purchase in 1954 Davison Chemical (which produced petroleum catalysts, silica gels, and superphosphates) and Dewey and Almy Chemical (which made sealing compounds and Cryovac, a transparent film used for food packaging). The Dewey and Almy division later developed the twist-off cap and shrink-wrap. Both companies turned out to be astute acquisitions. Grace Chemical added twenty-three more chemical companies within eleven years and became the nation’s fifth-largest chemical producer.
In the 1960s and 1970s, Grace further diversified, especially into the energy sector and consumer products markets, where he was much less successful. With the energy crisis of the early 1970s, prospects for Grace Petroleum looked bright, but after the price collapse of the early 1980s, the division was sold off. The foray into retail outlets added home improvement centers, restaurant chains, and stores for leather goods, auto parts, and sporting goods. Grace acquired Herman’s in New York and transformed it into the nation’s largest sporting goods chain. At one point the company owned about 1,500 retail outlets. By 1990 they had all been sold, and Grace was the world’s largest cocoa processor, had a stake in the health care industry, and was wholesaling books.
Through it all, specialty chemicals remained the core business, but nonetheless Grace’s erratic corporate strategy resulted in lackluster results for shareholders. In 1992 the former chief executive officer (CEO) turned over the reins to J. P. Bolduc, his handpicked successor, but remained as chairman of the board. Earnings improved, but a sordid internecine battle ensued between Grace and Bolduc. Although no longer CEO, Grace continued to enjoy perquisites such as a personal staff of eleven, a private jet and limousine, and generous maintenance of his Manhattan apartment. Bolduc terminated some of these expenses and the battle was on. After charges against Grace’s eldest son of using $1.4 million of corporate money for a personal business venture and countercharges of sexual harassment against Bolduc, both men were ousted from the corporation.
TIAA-CREF, the world’s largest pension fund and a major stockholder, became actively involved. It proposed reducing the number of board members and imposing a mandatory retirement age of seventy. In the final showdown, the board approved the proposal and voted Grace out. He died of lung cancer in New York City within two weeks of his ouster. His funeral mass was celebrated by John Cardinal O’Connor at St. Patrick’s Cathedral.
Grace may be most remembered for his service from 1982 to 1984 as chairman of President Ronald Reagan’s Private Sector Survey on Cost Control, better known as the Grace Commission, created to suggest ways the federal government could save money. Grace was also a philanthropist with a zeal for Roman Catholic causes, donating more than a million dollars each year to favorite charities, most of them Catholic. From the University of Notre Dame, where he was designated a lifetime trustee, he received the Laetare
Medal, one of American Catholicism’s highest honors. He was a founding member of Legatus, an international organization of Catholic CEOs devoted to spreading the faith through their professional offices, and he served as president of the Catholic Youth Organization in New York City in the late 1950s and early 1960s. He held honorary degrees from 214 colleges and universities. The fifty-story Grace Building on West Forty-second Street, erected in 1974, has a distinctive light and dark facade that continues upward in a gridlike pattern, and a base that curves outward to the street, causing one to focus on the “Grace” lettering directly above the ground floor.
Peter Grace was five feet, nine inches tall, had blue eyes and brown hair, and spoke with a slight lisp. His image as an outspoken, archconservative curmudgeon was reinforced several times by his public insults of minority groups. A great believer in spreadsheets, the reams of detailed reports he demanded from his managers, and the “num-bahs,” Grace, paradoxically, often purchased a company on a whim—after a sudden inspiration or after eating at its restaurant. During his career he bought more than 100 companies and sold more than seventy. However, his early decisions to abandon South American operations (later nationalized) and to enter the chemical industry at a propitious moment eventually outweighed his later meandering strategy. When he finally stepped down after forty-seven years, W. R. Grace and Company was ranked number seventy-three on the Fortune 500.
There is no book-length biography of Grace. The most comprehensive treatment of his business career is in International Directory of Company Histories, vol. 1 (1988). Details of his early career can be found in Current Biography (1960). For a later analysis, see the lengthy article that appeared in USA Today (31 Dec. 1992), after he resigned as CEO. A front-page article in the Wall Street Journal (18 May 1995) is an inside account of the Pyrrhic struggle between Grace and Bolduc. An obituary is in the New York Times (21 Apr. 1995).
Francis R. Mcbride