John Hall (American businessman)

Hall was born in Dallas, Texas, the son of John "Big John" Hall and Agnes Sanders Hall.^[5] He has one brother, James E. Hall, former Chairman of the National Transportation Safety Board.^[8]

By 1935, the family had returned to Tennessee, eventually settling in Knoxville, where the young John attended public schools.^[5] He graduated Knoxville High School in 1951.^[5] A strong football player, he earned scholarship offers from both Vanderbilt University and the University of Tennessee, among other institutions.^[5] He chose Vanderbilt, from which his father had graduated.^[5] By his senior year he was co-captain of the football team.^[9] He earned a degree in chemical engineering from Vanderbilt in 1955.^[4]

Hall was the first Vanderbilt player ever named an Academic All-American and graduated magna cum laude with a degree in chemical engineering in 1955.^[10][9] He was also inducted into the Tau Beta Pi Engineering Honor Society and the Omicron Delta Kappa national leadership honor society.^[11]

After graduating from Vanderbilt, where he had participated in the Reserve Officer Training Corps, Hall served as a second lieutenant in the U.S. Army. Hall had joined Eastern States Standard Oil (Esso, now Exxon) as a chemical engineer in 1955.^[5] In 1957, he accepted a position with Ashland as assistant to the coordinator of research and development.^[5][1]

Hall became executive assistant to company Founder and Chairman Paul Blazer in 1965.^[5] By 1966, Hall had risen to general refinery superintendent, and later that year, at 33, he was elected the company's youngest-ever vice president.^[12] Two years later, he was elected to Ashland Oil's board of directors.^[13] By 1971, the company had moved into specialty chemicals production and chemical distribution, and Hall was named president of the Ashland Chemical Company.^[14] He was elected executive vice president of Ashland Oil, Inc. in 1974,^[15] vice chairman of the board and chief operating office in 1979,^[16] and chairman and chief executive officer in September, 1981.^[17]

By that time, Ashland had developed a diverse business portfolio which included petroleum refining and marketing; chemicals; crude oil exploration and production; coal mining; road construction, heavy equipment manufacturing, and insurance marketing.^[18] Most of that portfolio was related to Ashland's core refining and marketing business. Seeking other revenue streams, Hall's predecessor, Orin E. Atkins, had led the company to acquire U.S. Filter Corporation (heavy manufacturing) and Integon Insurance in 1980. The strategy had not worked: The acquisitions were too far afield from the company's knowledge base and expertise, and the U.S. economy entered a downturn that hurt both the insurance and heavy equipment industries.^[18][19] By 1984 it was clear that action was needed, so Hall introduced a new strategy focusing on core businesses and moved to divest both U.S. Filter and Integon.^[19] The divestiture resulted in a one-time, $270 million after-tax loss for the company in fiscal year 1984.^[20] But analysts praised Hall's back-to-basics strategy,^[21] and The Gallagher Report named Hall one of its 10 best corporate chief executives for 1985.^[18] His strategic gamble paid off: Ashland earned $146.7 million in net income for 1985.^[22]

Between 1985 and his retirement in 1996, Hall steered Ashland on a steady course designed to stabilize earnings from refining and marketing, increase profits from related, non-refining businesses and maintain a strong financial position. During Hall's tenure, sales and revenue at Ashland Chemical nearly tripled and it became the largest distributor of chemicals and plastics in North America; SuperAmerica, Ashland's gasoline marketing division, went from 158 stores to more than 600; highway construction operations under APAC, the company's road construction business, almost doubled; and Ashland shares returned 10.5 percent value annually.^[23]

On December 22, 1999, John B. McCoy retired from the chairmanship of BankOne. Hall, by then retired from Ashland, was named acting Chairman and Chairman of the Search Committee to replace McCoy.^[24] Within a few months, the search committee recommended to the board that Jamie Dimon be hired as BankOne's new chairman and CEO. The Board approved the recommendation unanimously.^[25]

Hall also guided Ashland through several major crises. In 1983 the Securities and Exchange Commission announced an investigation into questionable payments related to crude oil purchases from Oman made prior to Hall's election as chairman.^[26] Ashland's board previously had retained a Pittsburgh law firm to look into the matter, and its report and recommendations, which concluded that no U.S. laws had been broken and that Ashland was not legally required to disclose the report, were presented to the board in October 1981.^[27][28] The findings addressed internal control issues, and the company implemented all recommendations prior to the SEC inquiry.^[18] At the conclusion of its investigation in July 1986, however, the SEC sought an injunction against Ashland and its former chairman, Orin E. Atkins, and alleged that one transaction between 1979 and 1981 violated the U.S. Foreign Corrupt Practices Act; Ashland and the commission reached an agreement wherein the SEC declined to pursue the charges in exchange for Ashland, which did not admit to the allegations, agreeing not to use money to influence foreign officials in the future.^[29] With Hall at the helm, Ashland had cooperated fully with the SEC inquiry.^[18] Moreover, to ward off potential future violations, Hall had ordered the development of both a Code of Business Conduct and a preventive law program very soon after he became chairman.^[18]

Two years later, Ashland faced an existential threat when the Belzberg family of Canada initiated a hostile takeover. Hall and his team called on the assistance of investment bankers, inside and outside legal counsel and Kentucky lawmakers who just happened to be in session. The company beat the Belzbergs to the news media, and the Kentucky legislature, eager to help the state's largest corporation, enacted an anti-takeover law in a matter of days. The company defeated the takeover attempt in a little over a week.^[30] Hall's blueprint also included a tactic to discourage future takeover attempts: The company developed an employee stock ownership plan in which about $300 million in excess pension assets was converted to Ashland shares and allocated to employees over a 10-year period.^[31] Thus, employees became the largest shareholder group.^[18]

Hall's skills at crisis management gained national attention in early 1988 as the result of an incident which came to be known in crisis management circles as "the trouble at Floreffe."^[32] On January 2, 1988, a 4-million-gallon storage tank at Ashland's Floreffe, Pa., collapsed, sending diesel fuel gushing over the sides of the surrounding containment dike in waves.^[33] The fluid found its way to an open storm sewer drain on adjacent property, and 750,000 gallons of diesel oil poured into the Monongahela River and eventually flowed into the Ohio River, disrupting drinking water in four states.^[34] The spill threatened the drinking water of roughly 1 million people in 80 communities in three states.^[35] Ashland quickly notified authorities so that containment could commence as soon as possible.^[36]

It became clear that the tank was not new but reconstructed of used, 40-year-old steel, that an alternative testing method had been used to confirm its storage worthiness, and that the construction permit had been applied for but received only verbal permission.^[37][38]

Hall went to Pittsburgh, inspected the site of the collapse and discovered that the tank was not up to company standards. He gave a news conference apologizing for the incident, taking responsibility, and promising that Ashland would pay for all cleanup costs and reimburse communities for expenses incurred because of water shortages.^[36][39] "We’re doing everything we know how to to clean up the danger as quickly as possible and restore water supplies," he said. "Ashland is a responsible corporate citizen that is also responsible to community concerns in the areas where our terminals are located."^[39] Hall drew praise for being so forthright and direct in confronting the crisis.^[40]

Ashland quickly opened a Pittsburgh office to handle claims and staffed it with a senior executive. Hall went there regularly along with other senior executives to keep communication channels open. The company provided affected communities with drinking water for weeks, and commissioned the Battelle Memorial Institute of Columbus, Ohio, and ERT, an environmental consulting firm, to examine the long-term environmental impact of the spill. Battelle also was engaged to conduct an independent investigation into the collapse.^[18][41] Battelle's analysis determined the tank failure was caused by a brittle steel fracture – the original steel predated World War II – emanating from a dime-size flaw in the metal near a weld in the bottom round of the tank. Combined with other factors, including the cold temperatures, the flaw caused the tank wall to split in less than a second.^[42] In November 1989 Ashland agreed to pay $30 million to settle 20 class-action civil suits filed as a result of the spill.^[43] Overall, the spill and its aftermath cost Ashland an estimated $40 million, including $30 million to settle class-action civil lawsuits.^[43]

But Hall's deft handling of the crisis won praise from financial analysts just days after the spill and from other observers as time went on.^[40] He would be named Crisis Manager of the Year by Carnegie Mellon University for his handling of the spill's aftermath.^[4] Hall's approach to the crisis became the subject of a Harvard Business School case study and today remains a textbook example of effective crisis management.^[32]

Hall married his college sweetheart, Ann McQuiddy, in the fall of 1955, shortly after he graduated from Vanderbilt.^[5] The two moved to Baltimore where he accepted a job with Esso. Ann Hall developed a serious health problem, which led Hall to accept a position at Ashland Oil to be closer to family for support during the health crisis.^[5] John and Ann Hall adopted a son, John, known as "Jay," in 1971.^[5] Ann's health, however, continued to deteriorate, and she died of cancer in 1972 at the age of 40.^[5]

Hall met his second wife, the former Donna Stauffer, in the late 1970s through mutual friends in Chicago, and they married in 1980.^[5] In 1998, shortly after his retirement, they were dealt an unexpected blow when Mrs. Hall developed breast cancer.^[5] She underwent successful treatment, and the two again immersed themselves in civic and charitable work.^[5]