Erik Jonsson

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Erik Jonsson
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Latest company Texas Instruments Inc.

John Erik Jonsson (6 September 1901 - 31 August 1995) was a co-founder and former president of Texas Instruments Incorporated. He was a skillful businessman and later became mayor of Dallas. A leader in industry with political savvy he was instrumental in the building of DFW airport. Jonsson was a noted philanthropist in his later years.


Biography [1]

Certificate No. 1 of TXN (symbol for Texas Instruments at the New York Stock Exchange) is the property of J. Erik Jonsson and has been since October 1, 1953, when trading began in TI common.

TI - chartered in 1930 as Geophysical Service Inc., and renamed in 1950, when wholly owned GSI subsidiaries were formed - would have never appeared on the ticker tapes had it not been for Jonsson's fundamental decision to involve GSI in military electronics. This stark departure from its oil and gas exploration mien had resulted in the name change and compartmentation of GSI/TI, the latter as a defense and geophysical equipment manufacturer; the NYSE listing was to acquire the public funding that would enable it to diversify. Competing in the same league with Westinghouse, General Electric and other such corporate mastodons, however, would require not only capital but a judicious selection of new product lines. Heretofore TI had avoided entering oversaturated markets, e.g., vacuum tubes, in hopes of finding some untrodden electronics field where a relative newcomer might shoot ahead of the competition.

A glimmering of such a possibility arrived with Bell Laboratories' invention of the germanium transistor in 1948. When perfected, it would reputedly render vacuum tubes - the main component of electronic circuits - quite obsolete. TI and over a score of other companies leaped at the chance to buy a license in 1951 when Western Electric - the Bell affiliate and patent holder - first offered it.

TI's bid, however, was politely discouraged. In the course of a marathon meeting in New York, Jonsson listened to and debated the objections of a covey of Bell lawyers who basically didn't believe a fledgling, undercapitalized outfit possessed either the know-how or the staying power to develop state-of-the-art technology. The bandying of caveats and reassurances lasted hours. Finally, Jonsson walked away with a license.


In May 1952, a dozen men, tucked away in a small area of TI's plant, set out to build a working transistor based on Bell's basic recipe, boldly resolving to do it before year's end. That team, the hopeful Semiconductor-Components Division, was led by Mark Shepherd Jr. (TI's present chairman of the board), a 29-year-old engineer who, like many others in the company, had received his electronics training in the U.S. Navy.

A week ahead of schedule - a surprise even to the team - they had a functional germanium transistor. Their immediate plans to start volume production attracted to their ranks one of the foremost experts in solid-state physics - Gordon Teal, the Bell scientist who had supplied Shockley, Bardeen and Brattain, the Nobel-laureate inventors of the initial point-contact transistor, with the single-crystal germanium material used in their experimental work. Teal also brought to TI his invaluable experience in growing the first silicon single crystal with positive and negative junctions which made control of a current possible. Silicon's superior heat resistance - germanium ceased to act as a transistor above 135 C - would open vast fields, military and otherwise, to high-tech electronics. Teal's addition greatly enhanced TI's expertise in this new area. How to cash in on it was quite another story.

The small quantities of germanium transistors TI produced sold for $10-$16 apiece. They didn't trigger the broad market TI had envisioned because US manufacturers clung to their inexpensive vacuum tube equipment. Automation to reduce unit costs, continued research on silicon and perhaps a new plant, all required massive long-term financing which only public ownership could provide. The route to this was via a merger with Intercontinental Rubber, a NYSE listed company (with 1,700 shareowners) which had ground to a stop. In spite of the merger, which technically qualified the survivor for listing, President Jonsson had an agonizing time convincing the NYSE that TI would be a worthy addition to the Exchange. "I got that damn listing done from A to izzard," says Jonsson with passion atypical of his genial temper. "And I told them that we were bringing something in the way of a company with potential." It wasn't easy, but he prevailed; and Jonsson wouldn't have traded that next grand moment for the Kingdom of Sweden.

Planted in the crowded pit of the New York Stock Exchange he awaited the opening of the day's business. At 10 o'clock, as the traditional gong sounded, all eyes went up to the tape which began flickering: - OCTOBER 1, 1953 - MARKET OPEN - TXN 5-1/4 - Jonsson and a band of other nervous TIers in the gallery burst a jubilant cheer and the trading started.

"I bought the first 100 shares for five and a quarter, which is more than they were worth," admits Jonsson grinning - per the allegory of a Dallas Morning News reporter - like the world's only 6-foot-1 elf. (That purchase was Jonsson's introit to becoming TI's principal stockholder and, accordingly - when their market value peaked at $256 a share in 1960 - a man worth many millions on paper.)


The merger had served its purpose - public ownership gave TI the leverage to make major inroads in an electronics industry previously unmindful of the little company and unaware that, while the savants were predicting that silicon transistors were two years in the future, TI already had not one but two models in production. The time had come to enlighten the industry; a pleasure reserved, fittingly, to Gordon Teal. But no fanfare for the occasion - just a tantalizing tip filtered through a paper presented May 10, 1954 before the National Conference on Airborne Electronics.

Military, industry and press representatives had heard talk after talk on the excellence and potential of germanium transistors. Teal's paper, vapidly entitled Some new and recent developments in silicon and germanium, was last. Close to its conclusion, he mentioned the "substantial progress" made by TI's team - Willis Adcock, Morton Jones, Jay Thornhill, Edmund Jackson and himself - with silicon as a transistor material. As he had anticipated, someone from the discomfited audience inquired with foreboding as to the extent of their progress. Teal, in a deliberately nonchalant manner, extracted a handful of shiny little gadgets from his coat pocket and proceeded to activate with them a small tape recorder, ipso facto relegating the day's state-of-the-art technology to antiquity.

A scramble to snatch copies of his paper and to a telephone booth followed; alarmed voices informed equally alarmed listeners that someone down in Texas was about to run away with the semiconductor market. (And that it did with a masterful stroke which opened a volume market for germanium transistors - the introduction in 1954 of the first transistorized pocket radio, the "Regency," in time for selective Christmas shoppers to put one under their trees.)

Not until 1958 would TI's new transistors be challenged by the competition. This headstart meanwhile enabled the company to grow at an average compounded rate of 40 percent a year, turning it into Wall Street's darling and, as Jonsson once put it, "the Tiffany's of the electronics industry."

To maintain that position in a free, highly competitive economy, TI management continued to make major allowances for R&D. Thus, when a given market reached overcapacity (as it happened with semiconductors by 1961), a sophisticated new product would be in line to generate profits from another direction. Such a strategy afforded TI several lucrative leads - to cite but a few examples, the integrated circuit (1958), the electronic hand-held calculator (1967), the single chip microcomputer (1971), and 3-D seismic surveying (1973). In this manner the 56-year history of the TI/GSI combine has caused present-day megafigures: well over 77,000 employees worldwide; $5 billion last year in spite of a 14 percent decline from the previous one. And all this largely owed to the vision ("- without being a dreamer," as a Texas governor once qualified) of "Mr. J" - Jonsson's sobriquet 'round company quarters.

It would be inaccurate, however, to portray him as one with a steely, unswerving eye on profit. No dreamer, to be sure, nonetheless, part of his success may well reside in his ability to remain reasonably quixotic on his way to riches. Apropos of which the following bears witness.

The date is uncertain, but it was sometime in the prosperous '60s. Jonsson and Patrick Haggerty, his friend and successor at the TI helm, were in a self-lauding mood about the company's standing. Haggerty was pondering the influence of luck versus conscious effort. Was it all luck perhaps? Jonsson, whose up-by-the-bootstraps background had given him some insight into the alchemy of both toil and fortune, wasn't thinking along those lines. Suddenly, out of context he burst: "Wouldn't it be fun to give it all away and start all over, just to see if we could do it again?"

It wasn't in his power or, forsooth, he might have. Starting from zero would have been old hat for Jonsson who had done it once and who still believes it's possible. "You're poor, you work hard, you're honest, and you inevitably come up to the top of the heap," assures Jonsson. And one can't argue with one who is living proof of his own tenet.


Early Years

His mother used to joke that John Erik's birth, September 6, 1901, and America's concurrent economic depression were related events. Although she might have overestimated her son's impact in the overall scenario, his arrival undoubtedly depressed his parents' budget - their modest household in New York's melting pot, Brooklyn, had little to spare. But Mrs. Jonsson had taken America's logo, Land of Opportunity, to heart; she was, Jonsson remembers, "A gal with love unlimited and infinitely patient with poverty and all the things that went with it." Nothing would stand in the way of giving her only child the best. This included secret piano lessons, a foolishness his father would have prevented which is why the piano was kept at a tone-deaf neighbor's home.

John Peter Jonsson and Ellen Palmquist were Swedish immigrants. Both had come to America in the 1880s, where they met and married. They were the rule among new arrivals in that nothing ever came easy, nor did they expect it to in those halcyon days of the human spirit. Herre Jonsson, a deadly serious and thrifty man who spoke limited English, worked 16 hours a day in his tobacco shop. His Old Country mentality deemed that an eighth-grade education more than met the requirements of a boy whose birthright was storekeeping.

Mother harbored higher expectations. However, it took the intercession of friends to convince the head of the family that Erik deserved to go on to high school. Why, the boy loved books at least as much as he loved the Dodgers. (The recoiling name and the baseball team itself were a Brooklyn product. Their original title, the Trolley Dodgers, tells much about those inner-city environs in which Erik grew up. All pedestrians - including ball players, who in those days were sans Ferraris and, believe it or not, went to the game on foot - measured their prowess and chances of survival against their ability to dodge the trolleys which, unimpaired by traffic laws, ran amok in that borough of New York. "An exclusive neighborhood," laughs Jonsson, "from which we eventually escaped.")

In 1912, the family moved to Montclair, New Jersey. Their minority status was even more patent in that rich man's town. But it was a step up and the schools were better - a definite plus for Erik, who was eyeing a career as a newspaper man. Ironically, his parents' inability to finance a college education was beneficial to Erik's development. To be even less of a burden to them, he resolved to graduate from high school in three instead of the regular four years; this meant a six-straight-subjects regime and reading some 100 books a year for extra credit.

Education

On top of his draconian academic schedule, Erik was working a number of odd jobs to save money for college. The first few dollars, however, were invested, as usual against parental discretion, in a two-cylinder Indian motorcycle in order to widen his range as a free-lance errand-runner. As a result of those high-speed deliveries of newspapers, groceries or whatever, Jonsson confides, "I've still got some gravel in strategic places." Additional income was derived from shoveling snow, selling magazine subscriptions door-to-door, and working part-time in a garage where he learned to make a car run under any circumstances and to extract the last mile out of his cycle.

Erik's dashing industry - which would make young scions of the TV era hyperventilate - enabled him to open a savings account before his 16th birthday. During its accrual he got a valuable preview of the mollifying influence of cold hard cash. An initial deposit of $3 didn't impress the bank teller. "He was a grouch who'd glare at me when I put my $2 in every week," says Jonsson. "He never said a word to me until I slipped the $5 under the window which pushed my balance to $100. After that, it was 'Good morning, Mr. Jonsson' every time. I never forgot that; it tells you a lot."

Money, however, would never beguile him. To Jonsson it is "just one of the tools in the tool kit to get things done." That was its function in 1918; a hard-earned $550 and a scholarship (a $100 Liberty bond) would help him carve out a college education at Columbia University. No other school would do. Columbia not only had a prestigious School of Journalism, but he would be able to stay home and help his parents, while commuting by railroad to New York to attend classes. A sensible plan which failed because he lacked 1-1/2 credits and Columbia refused to admit him. (One can't help but wonder what kind of reporter was lost in that transaction.) Erik was crushed, but not for long.

Barely a week after the refusal, he found a prospectus in the mail from the Rensselaer Polytechnic Institute. To this day he doesn't know how the oldest engineering school in the US got hold of his name and address. The curriculum was not what he had in mind but, he reasoned, mechanical engineering should be easy enough to someone who was no stranger to engines. And, perhaps, after a year he could begin his intended course at Columbia.

Rensselaer accepted him despite what Jonsson describes as "the sorriest background you can imagine for anyone wanting to study engineering. I was short on physics, chemistry, solid geometry, and all the subjects kids who had prepared for engineering had behind them." Ready or not, he took the Hudson River night boat to Troy, New York to attend RPI, where for the next four years he conquered calculus and thermodynamics - his least palatable subjects - while earning a living. Ever resourceful, Erik washed dishes in a fraternity house, sold pennants and peanuts at sports events, worked in a bookstore, chauffeured for its owners - In short, he never had time to look back on what might have been at Columbia.

Nor did he have time, upon graduation in 1922, to match his mechanical engineering skills to an equivalent position. He had to continue supplementing the dwindling income of his aging parents from the sale of their little stationery/soda-fountain store in Montclair. So he took a job for which he was superoverqualified - mill apprentice for the Aluminum Company of America. Soon he was in eastern Tennessee shoveling coal, running a crane and - for the fun of it, if not for extra pay - making major improvements on the mill's machinery in his spare time. That is, when he wasn't courting Margaret Fonde.

In February 1923 they were married, and Erik gained a companion of mettle to match his own. Through their years together, until her death in 1984, she cheerfully saw him through the good and, also, the bad times which were the rule in the beginning.

Shortly after the wedding, Erik requested a company transfer closer to his parents' home. His mother's ill-health was becoming an impossible burden for her husband to bear alone. Luckily, Alcoa had an opening for a plant superintendent at nearby Edgewater. Margaret took over the care of her in-laws and the house while working as a bookkeeper to complement her husband's $150 monthly salary. Still, it wasn't enough. Mounting medical bills and $50 rent for a crackerbox house (which required industrial loads of coal to heat) made for austere living conditions. Erik began staying up until 2:00 a.m. to assemble radios - novel gadgets only recently available. On weekends, he directed his inexhaustible energies toward convincing friends and neighbors that they should buy one from him.

Early Career

Thus he made ends meet until 1927 when he saw a Pontiac advertisement, a brand new automobile line which struck him as "a beautiful beast that was going to sell." In no time he was earning more selling cars on the side than as a full-time engineer. The right thing to do, it seemed, was to quit Alcoa, borrow $500 and open a dealership with a partner. It was definitely a better living than ever before - until 1929. Then the factory began shipping sports roadsters (instead of the landau sedans he had ordered) in the teeth of winter, when he couldn't have given one away. By June he had folded his business, and returned to his former employer not as an engineer, but in its only opening - as a salesman.


Fateful October found Jonsson selling aluminum furniture which, still unperfected, often sent buyers crashing down -as the stock market was about to. He was in the darkest recesses of the proverbial tunnel; no light in sight. All he knew was that "I had been killing myself - and my family - to get ahead and I wasn't even breaking even. I decided never to struggle that hard for money again."

It wasn't the best of times for that resolve, when so many of his fellow engineers and other professionals, like himself casualties of the depression, were standing at street corners pitifully asking similarly hard-up bypassers if they could spare a dime. Time and again his father dolefully told him, "You'll never get over this." Yet Erik, who was pushing the limits of his endurance and willing to take risks with nowhere to take them, didn't succumb to his father's (or anyone else's) fatalistic views. By early 1930, however, he couldn't have been more ready for what was about to unfold.

Connection to Karcher

Margaret's cousin was married to a John Clarence Karcher. The couples lived 15 miles apart in New Jersey and visited sometimes. But not much was said on those social occasions about the crucial role "Karch", a physicist, had played in early geophysical history. The fact was that back in 1917 he had jolted his physics professor from the University of Oklahoma, Dr. William Haseman, by sharing with him the formula: D equals one-half the square root of the quantity VT squared minus X squared. In other words, he had been the first American to recognize the potential of reflected sound waves for determining the contours of subsurface strata - a method for which Karcher and an associate, Burton McCollum, filed a patent in 1919. In 1920, hoping to fine-tune and commercialize reflection seismology, Karcher co-founded the world's first geophysical company, Geological Engineering. But a glut of oil following the 1921 blow-in of Oklahoma's enormous Burbank field put a swift end to that venture.

The next milestone in the evolution of seismic exploration had occurred in 1925, when Karcher was summoned by the legendary Everette DeGolyer, vice-president and general manager of Amerada Petroleum, to discuss the reflection method. The meeting was all DeGolyer had hoped for. He organized Geophysical Research Corporation in Tulsa, as an Amerada subsidiary. Karcher was hired to direct the efforts of talented men such as Eugene McDermott, and use of the method began. So superior was reflection over refraction that Amerada/GRC top management decreed the new method would be kept proprietary. Karcher wasn't pleased by that monopolization, nor was DeGolyer, who had also envisioned seismic reflection as a boon to explorationists everywhere. Thus Geophysical Service Inc., quietly financed by DeGolyer, was born, as the name implied, to make the method available as a service to the oil and gas industry. A tiny central office was established in Dallas and an equally modest instrument shop in Newark, New Jersey. Luckily Jonsson lived in that neck of the woods.

Shortly after GSI's incorporation on May 16, 1930, co-founders Karcher and McDermott came to ask Jonsson a favor. He remembers them as "wearing caps and rumpled suits and looking one cut above the apple sellers in the streets. Of course, I knew that Karch was a brilliant scientist. But my mental note was that they had left darn well paid, secure positions in Amerada to go into their own business and didn't even wait for better timing - must be idiots."

As asked, he expedited a delivery of Alcoa aluminum castings for a piece of equipment they were building in their nearby shop. And so it happened that a couple of months later, when the need for someone to run that lab arose, McDermott suggested they contact that fellow, Jonsson, who had been so helpful.

Jonsson Hired by GSI

Jonsson got a telegram from Karcher with a firm offer - $5,000 a year, no small change in 1930. What the heck, he reasoned, "If those two were crazy enough to get into business at a time like that, in my situation I could hardly do worse. At that point in my life I would have rather faced more trouble - selling applies in the extreme - than continue at a snail's pace on a small sales commission."

In mid-July he joined that small and chancy outfit which, although threatened - like bigger, more prestigious companies - by the depression, was nonetheless amassing, if not much capital, a henceforth famous coterie of scientist-cum-adventurers. Cecil Green, Bates Peacock, Roland Beers, Kenneth Burg, Henry Salvatori and others scattered in the fields of Texas, Oklahoma, Louisiana, Kansas and Arkansas, had no time to lament the collapse of Wall Street - they were busy redefining their traditional roles as physicists, engineers, geologists, mathematicians, etc., to come up with a viable one as geophysicists. In the process they coined a precept, Your responsibility exceeds your authority, which came in handy.

Imagine, for example, a computer, a man of numbers, pressed into emergency service turning a hand auger. An eyewitness of such a situation overheard the momentarily degraded professional curse and grumble that when he joined GSI he was supposed to be a computer, that he didn't hire out as a field hand for a beastly job like that.

"And neither did I," mumbled the mud-stained man on the other end of the handle.

"What job did they hire you for," asked the computer sympathetically.

"President," croaked J. C. Karcher, Ph.D., as he strained to bear down on the auger.

Jonsson, however, was far removed from these oil patch vignettes. His was a small theater of operations in 700 square feet of rented shop space in Newark, nowhere near the action. There he assembled geophysical instruments, following sketches and telephone instructions. Jonsson, with draftsman Alfred Morel, toolmaker Henry Stoll, and electrical assembler Tony Case led a quiet, almost underground, laboratory life. "We designed something, then we contracted out bits and pieces to different shops so no one knew exactly what we were doing. Then we assembled the parts into a whole instrument. Everything we did was a trade secret. No patents - a patent meant that someone would soon figure out how to go around it."

Someone always did anyway. By 1934 competition was there to stay and it no longer made sense to keep the lab camouflaged in New Jersey when practicality dictated it to be near Dallas headquarters. Karcher explained this situation to Jonsson over dinner at a New York restaurant. Would he relocate with the lab? "This is Friday," Jonsson said. "I couldn't be there until Monday."


Jonsson Moves To Dallas

No mention of financial arrangements; Jonsson admits he would have taken a cut to move to Dallas, his idea of a heavenly city ever since a short visit to headquarters upon being hired. Margaret, an Alabama native, was no less eager to move, anywhere, as long as it was south of the Mason-Dixon line.

Jonsson was 33 years old when he and his family settled in Dallas. Penury was to become a thing of the past or, as he prefers to think of it, "an overprivileged background," i.e., inured to poverty by previous testing. John McDonald cleverly encapsulated Jonsson's career in Fortune magazine: - [it] is a demonstration that the great American myth still has life. It is truly a Horatio Alger-like story, recognized by an award so-named that was bestowed upon him in 1969.

(Of ever so many honors, Jonsson is especially proud of the American Society of Swedish Engineers' 1980 John Ericsson Medal, which is according to Jonsson, "almost as lofty a distinction in this discipline as a Nobel Prize is in others." For the kudos he so richly merits he has a simple, albeit self-effacing, explanation: "There's always someone who figures out how to give you an incentive. If you get an award, you may know you really don't deserve it, but you have to try to live up to it. I've never felt comfortable with awards. I felt kind of ashamed I took the damn things, you know? But at the same time, every one of them was a strong motivator; at the very least I had to prove that those who had nominated me had not made an absolute mistake.")

Jonsson's business leadership and civic service record singled him out as the one citizen who could see Dallas through its worst crisis in the aftermath of President John Kennedy's assassination on November 22, 1963.

Jonsson, head of the Citizens Council that year, was the official host for the luncheon at the Dallas Trade Mart where Kennedy was headed and never arrived. He dealt with the immediate situation - involving 2,600 guests in various levels of distress - as only one with a lifetime of experience in handling emergencies could. He wasn't so sure, however, he was up to helping solve the ensuing one, two months later, upon Mayor Earle Cabell's resignation 15 months ahead of term.

Finding an interim mayor on short notice was difficult enough, but one who could pull up a people mired in emotional sociopolitical issues and manage a city then billed the world over as a den of violence and hate? That, the Citizens Council agreed, left but one suitable candidate. He, however, "wouldn't have run for notary public" at that time. Furthermore, becoming Mr. Mayor (as he is often addressed 15 years after the fact) would prevent long anticipated travel plans with Margaret. Yet, the official delegation sitting in his living room gave no signs of relenting in their appeal that he accept the post. Nor was he as reluctant as he first thought to accept the challenge. "You will have to talk to my wife," he finally conceded. "Whatever she says, goes."

Mayor of Dallas

On February 3, 1964, Jonsson augmented his TI chairman's salary with the $20 weekly stipend the mayoral office commanded. After his interim appointment, he ran and won re-election for three consecutive two-year terms during which he instigated major projects such as the Dallas-Fort Worth airport, one of the world's largest; construction of a futuristic City Hall; the opening of 10 branch libraries; and the establishment of the University of Texas at Dallas. His intangible achievements were perhaps more remarkable. In 1965 Jonsson created Goals for Dallas, a pioneer urban goal-setting program which (per his admired Athenian model) involved the citizenry; he averted the riots that tore through other American cities during the turbulent '60s; and, adhering to his conviction that "the way to correct an adverse opinion is to perform," he restored to Dallas its strength and its good name.

In May 1971 Jonsson returned to private life despite pressure that he run for a fourth term. "It would have been wrong. A city needs new ideas and you wear out in a job like that," says Jonsson, whose seven years of public service consisted of 70-90-hour weeks. Not to mention those nighttime calls (he never delisted his private phone number) Margaret used to screen for him, weeding out complaints about feline midnight revels or airplane lights (incomprehensibly) shining through a citizen's bedroom window - and each demanding the mayor get out of bed and on the ball immediately. Withal, Jonsson considers his mayoral period, "A time in which I grew up more and faster than I ever did."

This clearly introspective statement is mooted by his earlier upward journey since his transfer to Dallas in 1934. It was then that Jonsson's business talents began setting not only his, but GSI's course. Says Cecil Green, his friend of over half a century: "Because of his latent ability as a good manager of people, Erik quickly moved from our shop in Dallas to the position of manager of the small central office downtown. Among other things, he became responsible for the hiring of additional field key personnel and he showed excellent judgment in matching people to the assignments for which they were best suited. He was naturally adept in attracting the support of everyone who worked with and for him - not because they had to, but rather because they just wanted to!"

Jonsson also acted as financial officer, a job at which he would prove to be ne plus ultra. He kept the company afloat through the cash-flow fluctuations of a highly cyclical business. As he used to remark facetiously, "At times, our company measures its wealth by how much it owes the Republic National Bank in Dallas." In fact, after a prodigiously busy start in 1930, geophysical contracting had all but ceased due to the concurrent discovery (without the help of geophysics) of the giant East Texas field. The 360,000 b/d deluge of oil it produced had sent prices plummeting from $1.10 to 10 cents (and less) a barrel within months.

"We were exploring for the majors," Jonsson explains. "Our parties usually worked on contracts that had a 30-day termination clause, and whenever a client ran out of budget in a given area, that crew was turned loose and we had to find another job for it. Sometimes that wasn't easy. And whenever a crew had to be disbanded, you had no continuing value to bring back to your customers at a later time - all that skill and experience, wasted."

A way to hold crews together was to operate speculatively, hoping to find favorable information for later sale to an oil company. GSI did this so successfully that it eventually began exploiting its properties. By 1938, the oil division that emerged was being operated under the name Coronado Corp. and headed by Karcher, who had been in charge of the parties working for GSI's own account. GSI, which had become the geophysical subsidiary, was led by McDermott.


Jonsson - or Jon$$on, as some employees spelled his name in chaffing tribute to his financial savvy - remained with GSI as secretary-treasurer. The dollar signs, however, were no allusion to his personal worth. He still was far from consummating his wildest dream - getting $100,000 (in retrospect, a risible amount) ahead of salary some day. But the chance to take a step in that direction was to present itself in 1941; one may add, inauspiciously.

The conflict of interests arising from their close ties with Coronado had upset some of GSI's clients to the point that they were threatening to cancel their contracts. One solution was selling Coronado to an oil company and the Stanolind Oil & Gas Co. (now Amoco) showed interest. A purchase price of $5 million was agreed upon, with GSI, the subsidiary, thrown in for about a million more. Having its own geophysical department, Stanolind didn't object to the proposal of giving GSI management a 10-day option to buy the company and so preserve its independence.

"An element of luck, an opportunity comes along," says Jonsson, illustrating his state of mind upon hearing the news. "You have to recognize it at just the right time - if you recognize it a little bit too soon, a bit too late, maybe it's not an opportunity at all. So you must decide right then what you can do and what you can't."

He was alone at the office. McDermott, Green and Peacock were visiting crews at distant locations but Jonsson managed to put a call through to California where McDermott was.

"Look Mac, we've got something to do," urged Jonsson. "There's a 10-day option here to buy this company. If we don't Stanolind will, and I have the feeling that we'll all be job hunting."

"Well, you're there," Mac retorted. "See what kind of a deal you can put together."

Jonsson hung up, put his coat on, and once again followed the beaten track to the Republic Bank downstairs. However, he feared this money-borrowing mission might be hopeless; the bank was well-acquainted with the fact that GSI was shipping water. Jonsson admits: "We were buying, in essence, a business that was almost junk, threatened by losses of $10,000 a month. The reason was that we had put all our chips on overseas exploration - South America, Canada, Saudi Arabia, New Guinea, Java, India - we had crews everywhere. But war in Europe was escalating and oil companies began to pull in their horns and cancel contracts with us. So, in 1940 we had started getting crews out of several countries, and in only one year we had gone from, I think, 28 crews in the field down to six. Suddenly we found ourselves depending on a very lethargic domestic business which we had almost entirely abandoned to our competitors because we had been going after the larger profits of foreign operations."

Neither Jonsson nor Green had the cash for their equal share of the purchase; both had to put up all personal property as collateral. Prospects for repayment were laconically stated by a Green acquaintance who, whenever they met, would open the nearest window signaling Green the speedy way out of debt.

The crucial 10th day was a Monday and a banking holiday. "It's a good thing we found out about that one," Jonsson remarks. "But I arranged to close this on Saturday, which was a regular business day then. Otherwise we couldn't have made good on our obligations; we would have been sold to Stanolind and all of this probably wouldn't have happened, or at least not in the same configuration by a whole lot." (All of this means that their purchase of GSI on December 6, 1941, was the seed from which TI, a corporation now worth over $2.5 billion in the market, would develop.)

By way of a celebration, Jonsson decided to play a round of golf the next day - a date which would not only "live in infamy" but also presaged a bleak Monday as the first day of business for GSI under its new ownership.

"I was driving to the club when my radio announced Pearl Harbor had been attacked," recalls Jonsson. "A million worries crossed my mind, not the least of which was that I probably had lost a lot of money I really didn't have. So maybe I was broke again; I didn't know. Maybe Cecil was broke again; I didn't know. Peacock and Mac - I knew they could stand it."

It was a troubling panorama. Even if oil exploration were deemed essential to the war effort, the equipment and components necessary to run seismic crews were bound to be in short supply or, worse, requisitioned for the military. As it turned out, seismic activity increased through the war years, putting 16 GSI parties in the field. But the initial uncertainty required an immediate plan to deal with the government and ensure alternate income.

"Erik started spending considerable time back in Washington, DC, searching for some instrument project which we could manufacture in our shop and which would be undeniably important to the military so that we could make sure our technical people were not lost to the draft," says Green, who was trying to hold GSI's family together by struggling with as many as 100 draft boards around the country. "Erik can be credited with finding an instrument just obtained by the Bureau of Aeronautics of the Navy from Gulf Research & Development in Pittsburgh. This was the Magnetic Aerial Detector or MAD, invented by Victor Vacquier. It comprised a device able to detect the smallest changes in the earth's magnetic field and, when towed at the end of a 200-ft cable by a low-and-slow-flying airplane, could outline sedimentary basins. The Bureau had decided that such a sensitive device would be ideal for detecting iron bodies, such as submerged German submarines. And Erik got us a contract."

GSI was not, however, ready for mass production. "We didn't have enough men, money, materials or anything much," says Jonsson who, due to wartime personnel shortages was supervising their shops - when not in Washington or managing the financial end of the business. "But we were happy to do what we could building MADs and any other instrument the military cared to order from us. This way, if they took our seismic business out from under us, we still had the unit that could hold the fort for awhile."

It did better than that. Between 1942-45 military contracts earned GSI $1.1 million - not a remarkable income, but a promising start as a government supplier. This too was Jonsson's doing; he had become what he calls "a peddler" for their submarine search equipment and, as such, was establishing important contacts in the capital. It was during these exchanges that he came to the realization that defense electronics, with proper facilities for mass production, could be a lucrative venture even after the war. But not everyone shared his views. For one thing, the expansion he envisioned would involve investing in expensive equipment at post-war inflation prices. Still, he stood firm in his position. "A good manager," he maintains, "ought to bat 95 percent or so on anything but the very high risk kind of gamble."

That particular gamble, some feared, might break the company. On the other hand there was no arguing that an ongoing relation with the government would be an economic counterweight for eventual exploration downturns. Furthermore, steady revenue from such contracts would make a sustained research program possible not only for defense but also for geophysical equipment. Jonsson's convictions were buttressed by multiple conversations with Patrick Haggerty, a young ensign in charge of electronics procurement at the Bureau of Aeronautics whom he had gotten to know well through the MAD project and ensuing contracts. Both agreed that, as long as submarines were used in combat, there would be a need for better detection systems. Both anticipated the US/USSR arms race that would follow the war. Both understood that the capabilities of existing electronics manufacturers, limited as they were to the field of entertainment, couldn't tackle complex military projects. Therefore, if a company were to take the initiative to specialize in military electronics - Jonsson and Haggerty were kindred souls.

He was a 1936 graduate of Marquette University, with the highest grades ever made until then in the Electrical Engineering School. "Haggerty was a hard worker and a man of integrity." Jonsson extols. "I made my mind up long before the war was over that the day it ended I'd be after Pat for our company. I realized that that would be a competitive mistake if you enjoy power, because in many respects he was smarter than I, but it was the way to go. You see, one of the first principles of good management is that you have your successor ready."

Shortly after V-J Day, in 1945, Jonsson went to Washington to see Lieutenant Haggerty, whom he found floundering in a sea of contract cancellations. As they were discussing MAD's own windup, Jonsson popped up with the real reason for his visit: "Why don't you come to Dallas and join us?" Haggerty was "damned interested," he admitted, and made the move in November.

Some of his former Navy mates were subsequently hired to staff the newly formed Laboratory & Manufacturing division of GSI. These facilities would produce geophysical equipment, military electronics and eventually, it was hoped, civil electronics as well. Geophysical services, however, remained the main income source while the L&M showed sustained progress; by 1949 manufacturing would account for $1.5 million of a total annual sales of $64 million. GSI was turning out to be "a good little company" in the eyes of its executives - the objective was to make it "a good big company," and bigness in their estimate was $200 million a year in sales.

War, again, bolstered manufacturing. Following the outbreak of hostilities in Korea in June 1950, the US military's demand for GSI's pioneering airborne radar system and various other apparatus increased the L&M's output to such an extent that in two years defense equipment would constitute 80 percent of electronic sales. But the burgeoning division was increasingly hard to manage within the confines of the exploration company. This prompted, in 1950, the creation of General Instruments (renamed Texas Instruments the following year) to take over manufacturing.

The partnership of McDermott, Green, Peacock, and Jonsson - the last as president - was transferred to TI which, although much smaller in revenue at that early stage, became the parent company because of GSI's high-risk status as a user of dynamite.

In 1958 Pat Haggerty succeeded Jonsson who went on to chair the board. Eight years later, mandatory "retirement" at age 65 enabled him to dedicate the full-time service the Dallas mayoralship required, and he was named honorary chairman of TI. By 1971, in the wake of two careers, Jonsson was free at last to devote himself fully to what might be considered his most productive endeavor yet.

At some point in the past he had envisioned himself retired, still in his prime, teaching school, "because being with young people is what keeps one young and refreshed," according to Jonsson. "But I had to ask myself, 'What can you teach?' And I couldn't think of very much. So, it seemed to me I'd do better to stay in the money-making game and support people who did know something and, unlike me, knew how to teach it."

Philanthropy

Philanthropy is his present occupation. "A business that takes some doing," says Jonsson. "There are worthwhile causes all around us, and there is not enough money in Fort Knox to finance all of them. So you have to sort them out or you can get into too many that won't work. As with any investment, you have to see where you may get the greatest returns."

Academia (which so far has recognized Jonsson's contributions with nine honorary doctorates) and also medical research have found in him a princely patron. For over a decade, the sum of his donations has exceeded that of his annual income. As for the "returns" - they are splendid. Sparing lengthy enumeration, suffice to say that two of his prot g s at the University of Texas won the 1985 Nobel Prize in medicine. However altruistic, these pursuits do not exclude Jonsson as a principal beneficiary.

"It's fun to do things," he asserts with accent on the fun. "And it's important, especially for us, the ancient ones, to stay creative with new projects." The latest of which concerns genealogy, an interest - not so much his as his descendants' - sparked by a trip to Sweden in 1983, following his nomination as Swedish-American of the Year. "It was a great opportunity to mix with many people, but there was little time to look up my relatives; not that I was particularly interested in my so-called 'roots'," quips Jonsson. "Strangely, I find that my sons, my daughter, and even most of my 12 grandchildren are curious about their Swedish ancestry. So, for their sake, I went back a couple of times to dig out our family records, and in the process I'm having a delightful time."

Not long ago he confided to Nelle Johnston, his invaluable assistant of over 30 years, that he hoped she planned on continuing as such for 14 more. He estimates: "I have at least five years of work ahead of me, and I can see that at the pace I'm going, it'll take me 14 more years to get it done." In reality his tempo hasn't slackened since age nine, when he helped his father at the store and traded stamps for a profit at a more neighborly Wall Street then the one he later revisited as one of the outstanding business leaders of our time. If indeed the worth of a person to society can be measured by the contributions he makes to it, less the cost of sustaining himself and his mistakes in it (a Spartan yardstick Jonsson coined long ago), then the pace matters not, the effectiveness is all. And in this respect, he is leagues ahead of most.

References

  1. Proubasta, D. (1986). ”Erik Jonsson.” The Leading Edge, 5(6), 14-23[1]