Shoe Dog (29 page)

Ito touched his chin and decided he would open. Right away he went all in. All. Fucking. In. “Gentlemen,” he said, though he was speaking only to Holland, “it is my understanding that you refuse to handle Blue Ribbon's account any longer?”

Holland nodded. “Yes, that's right, Mr. Ito.”

“In that case,” Ito said, “Nissho would like to pay off the debt of Blue Ribbon—in full.”

Holland stared. “The
full . . . 
?”

Ito grunted. I glowered at Holland. I wanted to say, That's Japanese for:
Did I stutter?

“Yes,” Ito said. “What is the number?”

Holland wrote a number on his pad and slid the paper toward Ito, who glanced quickly down. “Yes,” Ito said. “That is what your people have already told my people. And so.” He opened his briefcase, removed an envelope, and slid it across the table at Holland. “Here is a check for the full amount.”

“It will be deposited first thing in the morning,” Holland said.

“It will be deposited
first thing today
!” Ito said.

Holland stammered. “Okay, right, today.”

The cohorts looked bewildered, terrified.

Ito swiveled in his chair, took them all in with a subzero gaze. “There is one more thing,” he said. “I believe your bank has been negotiating in San Francisco to become one of Nissho's banks?”

“That's right,” Holland said.

“Ah. I must tell you that it will be a waste of your time to pursue those negotiations any further.”

“Are you sure?” Holland asked.

“I am quite sure.”

The Ice Man cometh.

I slid my eyes toward Hayes. I tried not to smile. I tried very hard. I failed.

Then I looked right at Holland. It was all there in his unblinking eyes. He knew the bank had overplayed its hand. He knew the bank's officers had overreacted. I could see, in that moment, there would be no more
FBI
investigation. He and the bank wanted this matter closed, over, done with. They'd treated a good customer shabbily, and they didn't want to have to answer for their actions.

We would never hear of them, or him, again.

I looked at the suits on either side of Holland. “Gentlemen,” I said, standing.

Gentlemen. Sometimes that's Business-ese for:
Take your
FBI
and shove it.

WHEN WE WERE
all outside the bank, I bowed to Ito. I wanted to kiss him, but I only bowed. Hayes bowed, too, though for a moment I thought he was pitching forward from the stress of the last three days. “Thank you,” I said to Ito. “You will never be sorry that you defended us like that.”

He straightened his tie. “Such stupidity,” he said.

At first I thought he was talking about me. Then I realized he meant the bank. “I do not like stupidity,” he said. “People pay too much attention to numbers.”

PART TWO

“No brilliant idea was ever born in a conference room,” he assured the Dane. “But a lot of silly ideas have died there,” said Stahr.

—F. Scott Fitzgerald,
The Last Tycoon

1975

T
here was no victory party. There was no victory dance. There wasn't even a quick victory jig in the halls. There wasn't time. We still didn't have a bank, and every company needs a bank.

Hayes made a list of banks with the most deposits in Oregon. They were all much smaller than First National or Bank of California, but oh well. Beggars, choosers, etc.

The first six hung up on us. Number seven, First State Bank of Oregon, didn't. The bank was in Milwaukie, a little town half an hour up the road from Beaverton. “Come on over,” said the bank president when I finally got him on the phone. He promised me one million dollars in credit, which was about his bank's limit.

We moved our account that day.

That night, for the first time in about two weeks, I put my head on a pillow and slept.

THE NEXT MORNING
I lingered with Penny over breakfast and we talked about the upcoming Memorial Day weekend. I told her I didn't know when I'd craved a holiday so much. I needed rest, and sleep, and good food—and I needed to watch Pre run. She gave me a wry smile. Always mixing business with pleasure.

Guilty.

Pre was hosting a meet that weekend in Eugene, and he'd invited the top runners in the world, including his Finnish archnemesis, Viren. Though Viren had pulled out at the last minute, there was still a gang of amazing runners competing, including one brash marathoner named Frank Shorter, who'd taken gold at the 1972 Games, in Munich, the city of his birth. Tough, smart, a lawyer now living in Colorado, Shorter was starting to become as well known as Pre, and the two were good friends. Secretly I had designs on signing Shorter to an endorsement deal.

Friday night Penny and I drove down to Eugene and took our place with seven thousand screaming, roistering Pre fans. The 5,000-meter race was vicious, furious, and Pre wasn't at his best, everyone could see that. Shorter led going into the last lap. But at the last possible moment, in the last two hundred yards, Pre did what Pre always did. He dug down deep. With Hayward vibrating and swaying, he pulled away and won in 13:23.8, which was 1.6 seconds off his best time.

Pre was most famous for saying, “Somebody may beat me—but they're going to have to bleed to do it.” Watching him run that final weekend of May 1975, I'd never felt more admiration for him, or identified with him more closely. Somebody may beat me, I told myself, some banker or creditor or competitor may stop me, but by God they're going to have to bleed to do it.

There was a postrace party at Hollister's house. Penny and I wanted to go, but we had a two-hour drive back to Portland. The kids, the kids, we said as we waved good-bye to Pre and Shorter and Hollister.

The next morning, just before dawn, the phone rang. In the dark I groped for it.
Hello?

“Buck?”

“Who's this?”

“Buck, it's Ed Campbell . . . down at Bank of California.”

“Bank of Cal—?”

Calling in the middle of the night? Surely I was having a bad dream. “Damn it, we don't bank with you anymore—you threw us out.”

He wasn't calling about money. He was calling, he said, because he'd heard Pre was dead.

“Dead? That's impossible. We just saw him race. Last night.”

Dead. Campbell kept repeating this word, bludgeoning me with it. Dead dead—
dead
. Some kind of accident, he murmured. “Buck, are you there? Buck?”

I fumbled for the light. I dialed Hollister. He reacted just as I had. No, it can't be. “Pre was just
here
,” he said. “He left in fine spirits. I'll call you back.”

When he did, minutes later, he was sobbing.

AS BEST ANYONE
could tell, Pre drove Shorter home from the party, and minutes after dropping Shorter off he'd lost control of his car. That beautiful butterscotch
MG
, bought with his first Blue Ribbon paycheck, hit some kind of boulder along the road. The car spun high into the air, and Pre flew out. He landed on his back and the
MG
came crashing down onto his chest.

He'd had a beer or two at the party, but everyone who saw him leave swore that he'd been sober.

He was twenty-four years old. He was the exact age I'd been when I left with Carter for Hawaii. In other words, when my life began. At twenty-four I didn't yet know who I was, and Pre not only knew who he was, the world knew. He died holding every American distance record from 2,000 meters to 10,000 meters, from two miles to six miles. Of course, what he really held, what he'd captured and kept and now would never let go of, was our imaginations.

In his eulogy Bowerman talked about Pre's athletic feats, of course, but insisted that Pre's life and his legend were about larger,
loftier things. Yes, Bowerman said, Pre was determined to become the best runner in the world, but he wanted to be so much more. He wanted to break the chains placed on all runners by petty bureaucrats and bean counters. He wanted to smash the silly rules holding back amateur athletes and keeping them poor, preventing them from realizing their potential. As Bowerman finished, as he stepped from the podium, I thought he looked much older, almost feeble. Watching him walk unsteadily back to his chair, I couldn't conceive how he'd ever found the strength to deliver those words.

Penny and I didn't follow the cortege to the cemetery. We couldn't. We were too overwrought. We didn't talk to Bowerman, either, and I don't know that I ever talked to him thereafter about Pre's death. Neither of us could bear it.

Later I heard that something was happening at the spot where Pre died. It was becoming a shrine. People were visiting it every day, leaving flowers, letters, notes, gifts—Nikes. Someone should collect it all, I thought, keep it in a safe place. I recalled the many holy sites I'd visited in 1962. Someone needed to curate Pre's rock, and I decided that someone needed to be us. We didn't have money for anything like that. But I talked it over with Johnson and Woodell and we agreed that, as long as we were in business, we'd
find
money for things like that.

1976

N
ow that we'd gotten past our bank crisis, now that I was reasonably sure of not going to jail, I could go back to asking the deep questions. What are we trying to build here? What kind of company do we want to be?

Like most companies, we had role models. Sony, for instance. Sony was the Apple of its day. Profitable, innovative, efficient—and it treated its workers well. When pressed, I often said I wanted to be like Sony. At root, however, I still aimed and hoped for something bigger, and vaguer.

I would search my mind and heart and the only thing I could come up with was this word—­“winning.” It wasn't much, but it was far, far better than the alternative. Whatever happened, I just didn't want to lose. Losing was death. Blue Ribbon was my third child, my business child, as Sumeragi said, and I simply couldn't bear the idea of it dying. It has to live, I told myself. It just has to. That's all I know.

Several times, in those first months of 1976, I huddled with Hayes and Woodell and Strasser, and over sandwiches and sodas we'd kick around this question of ultimate goals. This question of winning and losing. Money wasn't our aim, we agreed. Money wasn't our end game. But whatever our aim or end, money was the only means to get there. More money than we had on hand.

Nissho was loaning us millions, and that relationship felt sound,
solidified by the recent crisis.
Best partners you'll ever have.
Chuck Robinson had been right. But to keep up with demand, to continue growing, we needed millions more. Our new bank was loaning us money, which was good, but because they were a small bank we'd already reached their legal limit. At some point in those 1976 Woodell-­Strasser-Hayes discussions we started to talk about the most logical arithmetical solution, which was also the most difficult one emotionally.

Going public.

On one level, of course, the idea made perfect sense. Going public would generate a ton of money in a flash. But it would also be highly perilous, because going public often meant losing control. It could mean working for someone else, suddenly being answerable to stockholders, hundreds or maybe thousands of strangers, many of whom would be large investment firms.

Going public could turn us overnight into the thing we loathed, the thing we'd spent our lives running from.

For me there was an added consideration, a semantic one. Defined by shyness, intensely private, I found that phrase itself off-­putting: going
public
. No thank you.

And yet, during my nightly run, I'd sometimes ask myself, Hasn't your life been a kind of search for connection? Running for Bowerman, backpacking around the world, starting a company, marrying Penny, assembling this band of brothers at Blue Ribbon's core—hasn't it all been about, one way or another, going public?

In the end, however, I decided,
we
decided, going public wasn't right. It's just not for us, I said, and we said. No way. Never.

Meeting adjourned.

So we set about casting for other ways to raise money.

One way found us. First State Bank asked us to apply for a million-­dollar loan, which the U.S. Small Business Administration would then guarantee. It was a loophole, a way for a small bank to gently expand its credit line, because their guaranteed-loan limits
were greater than their direct-loan limits. So we did it, mainly to make their life easier.

As is always the case, the process turned out to be more complicated than it first appeared. First State Bank and the Small Business Administration required that Bowerman and I, as majority shareholders, both personally guarantee the loan. We'd done that at First National and at Bank of California, so I didn't see a problem. I was in hock up to my neck, what was one more guarantee?

Bowerman, however, balked. Retired, living on a fixed income, dispirited after the traumas of the last few years, and greatly weakened by the death of Pre, he didn't want any more risk. He feared losing his mountain.

Rather than give his personal guarantee, he offered to give me two-thirds of his stake in Blue Ribbon, at a discounted price. He was bowing out.

I didn't want this. Never mind that I didn't have the money to buy his stake, I didn't want to lose the cornerstone of my company, the anchor of my psyche. But Bowerman was adamant, and I knew better than to argue. So we both went to Jaqua and asked him to help broker the deal. Jaqua was still Bowerman's best friend, but I'd come to think of him as a close friend, too. I still trusted him completely.

Let's not fully dissolve the partnership, I said to him. Though I reluctantly agreed to buy Bowerman's stake (low payments, spread over five years), I begged him to retain a percentage, stay on as a vice president and member of our small board.

Deal, he said. We all shook hands.

WHILE WE WERE
busy moving around stakes and dollars, the dollar itself was hemorrhaging value. It was all at once in a death spiral against the Japanese yen. Coupled with rising Japanese labor rates, this was now the most imminent threat to our existence. We'd
increased and diversified sources of production, we'd added new factories in New England and Puerto Rico, but we were still doing nearly all our manufacturing in volatile Japan, mostly at Nippon Rubber. A sudden, crippling shortage of supply was a real possibility. Especially given the spike in demand for Bowerman's waffle trainer.

With its unique outer sole, and its pillowy midsole cushion, and its below-market price ($24.95), the waffle trainer was continuing to capture the popular imagination like no previous shoe. It didn't just feel different, or fit different—it looked different. Radically so. Bright red upper, fat white swoosh—it was a revolution in aesthetics. Its look was drawing hundreds of thousands of new customers into the Nike fold, and its performance was sealing their loyalty. It had better traction and cushioning than anything on the market.

Watching that shoe evolve in 1976 from popular accessory to cultural artifact, I had a thought.
People might start wearing this thing to class.

And the office.

And the grocery store.

And throughout their everyday lives.

It was a rather grandiose idea. Adidas had had limited success converting athletic shoes to everyday wear, with the Stan Smith tennis shoe and the Country running shoe. But neither was nearly as distinctive, or popular, as the waffle trainer. So I ordered our factories to start making the waffle trainer in blue, which would go better with jeans, and that's when it really took off.

We couldn't make enough. Retailers and sales reps were on their knees, pleading for all the waffle trainers we could ship. The soaring pair counts were transforming our company, not to mention the industry. We were seeing numbers that redefined our long-term goals, because they gave us something we'd always lacked—an identity. More than a brand, Nike was now becoming a household word, to such an extent that we would have to change the company name.
Blue Ribbon, we decided, had run its course. We would have to incorporate as Nike, Inc.

And for this newly named entity to stay vibrant, to keep growing, to survive the declining dollar, we'd need as always to ramp up production. Sales reps on their knees—that wasn't sustainable. We'd need to find more manufacturing hubs, outside Japan. Our existing factories in America and Puerto Rico would help, but they weren't nearly enough. Too old, too few, too expensive. So in the spring of 1976 it was finally time to turn to Taiwan.

For our point man in Taiwan I looked to Jim Gorman, a valued employee, long known for his almost fanatical loyalty to Nike. Raised in a series of foster homes, Gorman seemed to find in Nike the family he'd never had, and thus he was always a good sport, always a team player. It was Gorman, for instance, who'd drawn the unpleasant task of driving Kitami to the airport, back in 1972, after that final showdown in Jaqua's conference room. And he did it without complaint. It was Gorman who'd taken over the Eugene store from Woodell, the toughest of acts to follow. It was Gorman who wore subpar Nike spikes in the 1972 Olympic Trials. In every instance, Gorman had done a fine job and never uttered a sour word. He seemed the perfect candidate to take on the latest mission impossible—­Taiwan. But first I'd need to give him a crash course on Asia. So I scheduled a trip, just the two of us.

On the flight overseas Gorman proved to be an avid student, a virtual sponge. He grilled me about my experiences, my opinions, my reading, and wrote down every word I said. I felt as if I was back in school, teaching at Portland State, and I liked it. I remembered that the best way to reinforce your knowledge of a subject is to share it, so we both benefited from my transferring everything I knew about Japan, Korea, China, and Taiwan to Gorman's brain.

Shoe producers, I told him, are abandoning Japan en masse. And they're all landing in two places. Korea and Taiwan. Both countries specialize in low-priced footwear, but Korea has elected to go with
a few giant factories, whereas Taiwan is building a hundred smaller ones. So that's why we're choosing Taiwan: Our demand is too high, our volume too low, for the biggest factories. And in smaller factories we'll have the dominant position. We'll be in charge.

Of course, the tougher challenge was to get any factory we chose to upgrade its quality.

And then there was the constant threat of political instability. President Chiang Kai-shek had just died, I told Gorman, and after twenty-five years in command he was leaving a nasty power vacuum.

For good measure, you always needed to account for Taiwan's ancient tensions with China.

On and on I talked as we sailed over the Pacific. While taking copious notes, Gorman also came up with new, fresh ideas, which gave me new insights, things to think about. Stepping off the plane in Taichung, our first stop, I was delighted. This guy was intense, energetic, eager to get started. I was proud to be his mentor.

Good choice, I told myself.

By the time we reached the hotel, however, Gorman was wilting. Taichung looked and smelled like the far end of the galaxy. A vast megalopolis of smoking factories, and thousands of people per square foot, it was unlike anything I'd ever seen, and I'd been all over Asia, so of course it overwhelmed poor Gorman. I saw in his eyes that typical first-timer's reaction to Asia, that look of alienation and circuit overload. He looked exactly like Penny when she met me in Japan.

Steady, I told him. Take it one day, one factory, at a time. Follow your mentor's lead.

Over the next week we visited and toured about two dozen factories. Most were bad. Dark, dirty, with workers going through the motions, heads bowed, vacant looks in their eyes. Just outside Taichung, however, in the small town of Douliou, we found a factory that showed promise. It was called Feng Tay, and it was managed by a young man named C. H. Wong. Small, but clean, it had a positive
vibe, as did Wong, a shoe dog who lived for his workplace. And in it. When we noticed that one small room off the factory floor was off-limits, I asked what was in there. Home, he said. “That is where my wife and I and our three kids live.”

I was reminded of Johnson. I decided to make Feng Tay the cornerstone of our Taiwan effort.

When we weren't touring factories, Gorman and I were being feted by factory owners. They stuffed us with local delicacies, some of which were actually cooked, and plied us with something called a Mao tai, which was a mai tai, but apparently with shoe cream instead of rum. Jet-lagged, Gorman and I both had lost our tolerance. After two Mao tais we were potted. We tried to slow down, but our hosts kept raising their glasses.

To Nike!

To America!

At the final dinner of our Taichung visit Gorman repeatedly excused himself and ran to the men's room, to splash cold water on his face. Every time he left the table I got rid of my Mao tai by pouring it into his water glass. Each time he returned from the men's room there was another toast, and Gorman thought he was playing it safe by raising his water glass.

To our American friends!

To our Taiwanese friends!

After another huge gulp of spiked water, Gorman looked at me, panic-stricken. “I think I'm going to pass out,” he said.

“Have some more water,” I said.

“Tastes funny.”

“Nah.”

Despite offloading my booze onto Gorman, I was woozy when I got back to my room. I had trouble getting ready for bed. I had trouble finding the bed. I fell asleep while brushing my teeth. Midbrush.

I woke sometime later and tried to find my extra contact lenses. I found them. Then dropped them on the floor.

There was a knock. Gorman. He walked in and asked me something about our next day's itinerary. He found me on my hands and knees, searching for my contact lenses in a pool of my own sick.

“Phil, you okay?”

“Follow your mentor's lead,” I mumbled.

THAT MORNING WE
flew to Taipei, the capital, and toured a couple more factories. In the evening we strolled Xinsheng South Road, with its dozens of shrines and temples, churches and mosques. The Road to Heaven, locals called it. Indeed, I told Gorman, Xinsheng means “New Life.” When we returned to our hotel I got a strange and unexpected phone call. Jerry Hsieh—pronounced Shay—was “paying his respects.”

I'd met Hsieh before. In one of the shoe factories I'd visited the year before. He was working for Mitsubishi and the great Jonas Senter. He'd impressed me with his intensity and work ethic. And youth. Unlike all the other shoe dogs I'd met, he was young, twenty­something, and looked much younger. Like an overgrown toddler.

He said he'd heard we were in the country. Then, like a
CIA
operative, he added: “I know why you are here . . .”

He invited us to visit him in his office, an invitation that seemed to indicate he was now working for himself, not Mitsubishi.