John McCone Interview: Conversations with History; Institute of International Studies, UC Berkeley
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You graduated from the University of California in what year?
1922. I have very happy memories of my four years at Berkeley. I've been a Golden Bear ever since. I had a reasonably good academic record. I was the president of the Tau Beta Phi Society. I was also a member of the two or three honor societies ... Golden Bear, Big C Society, and so forth. I graduated with a cum laude degree in mechanical engineering.
Did you take any courses in foreign policy or international relations?
None whatsoever.
So you were at Cal during the end of World War I?
Yes. It was an amusing situation. The professor called the class to order and said: "The report we have just heard is true, and it appears that the war might be over. The class will now come to order" -- and everybody ran out of the room. It was a memorable occasion.
There is a Cal acquaintance that I want to ask you about -- your relationship with Ernest Lawrence.
Yes, I knew Ernest Lawrence. In 1929 or '30, after I had been out of college for eight years or so, I received a call from the dean of the Department of Physics and Chemistry at UC Berkeley stating that they were going to have a symposium, and they would like it if I could come up and listen. I went up to that meeting and ran into an extraordinarily bright young man named Ernest Lawrence. This was my first connection with him. And I saw him on and off until the war started and he became involved with the Manhattan Project.
Did you know him when he was working on the first cyclotron?
Yes, I raised some money in the early 1930s to help him develop his cyclotron. We are talking about a very small unit and small amounts of money -- hundreds of dollars, not thousands or millions. Hundreds of dollars to build a little machine that you could build and operate in a warehouse. So it wasn't any great undertaking, but it was the opening step in the whole area of nuclear science.
When you were at the Atomic Energy Commission, were there ever any attempts to take the labs away from the University of California?
Yes, there were those who thought that the labs should be run by the AEC. I maintained with great determination for several years that the labs should be operated by the University of California because they had the infrastructure of scientists, who were all on the University of California payroll. The main problem was untangling that. Getting these very competent scientific minds into other institutions is itself an uncertain undertaking. Nevertheless, it was problem I dealt with for a number of years and it may still be a problem.
After your graduation from Cal, did you assume a lot of new responsibilities?
Yes. My father died when I was a junior in college. I had three sisters and a mother, and my father's affairs were not in very good shape. So I had quite a struggle for several years to complete my education and to get going and earn a living and help my sisters get through college. So there was a period there with a few years of pretty rough going.
How did you get your first job after college?
I didn't have any money, and I was on my way to the Llewelyn Ironworks with a letter to the manager from a roommate. When I got off the street car, I ran into the foreman of a shop that I had worked in during the summer. He asked me what I was going to do, and I told him, and he said he'd give me a job. "Doing what?" I asked. "Well," he said, "I'll put you on the riveting crew." After I signed up, I asked if I could borrow some money from him, to buy some overalls and some shoes to work in. I promised him I'd pay him on the first payday, which I did. Then I thought, well, I might as well go in and give my letter to the boss.
After waiting about an hour, he saw me and said: "There's a serious depression going on now -- business is not good ... Well, John, we have no opening now." I said: "Mr. Taylor, I didn't come in to ask you for a job, I came in to tell you I'm going to work for you in the morning." He said, "What are you going to do?" I told him I was starting with the riveting crew in the morning. He then said, "Do you mean to tell me that after your career in the university studying engineering, you'd go to work as a riveter?" And I said, "Well, you have to eat, and to eat you have to work, so I thought I'd go to work." So I signed in the next morning and stayed down there for a long time.
And you were there seventeen years?
Yes, I worked my way up, step by step, to executive vice president.
And to what do you attribute your success?
Hard work and determination. You've got to sacrifice almost everything for hard work. That's the only advice I can give anybody.
After seventeen years, you left. Why?
Well, that was in 1937, the peak of the Roosevelt era. I came to the conclusion that if I remained an employee, I would earn more money. I would create more social and business obligations that would take money, along with better clubs and all the rest of it. And I'd pay more taxes. So I figured that if I stayed there the rest of my life, I'd end up with probably a reasonable retirement pension and not very much money.
So I decided that the only way to make it was to get into business for myself. I looked upon myself as a pretty good engineer, so I resigned precipitously. I was thirty-five years old, and though I had a very good position for my age, I resigned and started my own engineering company. And that led to a lot of things. It was very successful.
And so the first company that you started on your own was what?
McCone Engineering Company. And after I had been in business about a year, Steve Bechtel, who had been a friend of mine for many years, came to see me and said: "We have a construction company but we have no engineering company. I propose that we join to form Bechtel-McCone Company ... a combination of construction and engineering."
How did you first know Steve Bechtel?
I knew him at Cal. He was a year or two behind me. I tried to get him to join our fraternity but he didn't do it. Our association started then and continued.
What specific projects did you work on from 1937 to 1941?
Building and designing oil refineries and industrial plants and occasional power plants. I think the big majority of it was in oil refinery construction.
Initially, were most of your projects domestic?
Well, they were all domestic except to the extent that the domestic oil companies had operations in the Persian Gulf. We handled that, so it was foreign and also domestic.
How did defense work affect your business?
The war broke out about two or three years after we formed the company. It changed the scope of activities for our business entirely. The war caused an increase in the order of magnitude. We did a great deal of war work. One shipyard had 50,000 employees.
During World War II, you led the wartime shipbuilding effort to produce 467 ships. Of your work, the New York Herald-Tribune noted that you "set production goals higher than anyone thought could be met and then you made sure they were met." How did you do that?
It was a question of organizing the work in the first place with raw materials at the proper place and the proper time. That being accomplished, then this motivation of the worker would be insufficient unless management had perfected its plan for the flow of materials. Otherwise there's little to motivate the workers.
We built a shipyard that was the second largest in the United States. We recruited 45,000 employees at our peak; none of them knew how to build ships, so we conducted a training school, and in the four-and-a-half years or whatever it was, we trained over a thousand workers in various crafts involved in shipbuilding, with welding as one of the prime training courses. It was all very necessary because there hadn't been a ship built on the West Coast for a great many years very few in the United States. Our challenge was to build a shipyard and then to organize the raw materials through that yard, put the material in the hands of workers that had been properly trained.
What made these huge operations work so well?
That comes from a selection of the men that you choose to operate for you and the manner in which you guide them.
There are complaints now that the United States as a country can't manufacture in the way some of our competitors can. What makes the difference?
I believe there's been a loss of quality in our products. That is not the case in certain foreign countries. I also believe there's a lack of productivity. This lack of quality and productivity is on all levels of our industrial society; it isn't necessarily labor, or the blue-collar worker. It extends all the way up the ladder of our industrial society.
Who were some of your business associates during this period?
I had my own connections from Consolidated Steel, but Bechtel is a part of an organization called "The Six Companies" that built the Boulder Dam and that included, in addition to Bechtel, Kaiser, Kahn, Morrison, Newson, and the General Construction Company. I had an indirect association with them because Consolidated Steel fabricated and furnished all the steel that went into the Boulder Dam project and Hoover Dam project, and this put me in close relationship with many California businessmen. Then when Steve Bechtel and I formed our association, I sort of burst into the group. It was that group that developed a great deal of war work, a great deal of shipbuilding, and we were part of it.
Tell us about your business interests after World War II.
After the close of the war, we liquidated the shipbuilding companies because they were war enterprises and we closed the Birmingham Center because that was strictly a war enterprise. Then we returned, Mr. Bechtel and I, to our original objective of engineering construction, and that went along very well. It went along on a very much reduced scale with a satisfactory return. We had a shipping enterprise that I was very much interested in that had originated during the war. We found through the assembly of a large number of men that we had an organization of a number of licensed captains and mates and engineers.
And so we came back in the shipping business, with tankers and so on. I was very much interested in it while Mr. Bechtel was not particularly interested. The fact is that he really did not like it because it was a capital-intensive business. The construction business was a service business. Then in the late 1940s we acquired some ships and I devoted more and more attention to the shipping business and less to the engineering construction business.
We had some manufacturing activities and the Joshua Hendy Company in Sunnyvale, and I was looking after those. And then, in 1947, my life was kind of divided because I became interested in my business but also interested in government. As time went on, three or four years, I divided my attention and this became something of a problem for my business associates who felt that I was not devoting enough of my time to business and more time than was necessary to government.
Nevertheless, I wanted to do it. So, in the late 1940s, I guess, I dissolved my interest with the Bechtels and acquired all of the equity in Hendy, and directed that strictly toward the shipping business. I liked that because with the type of shipping that I was in, which was bulk movement of oil and ore, there was no conflict of interest in anything I did in government. I found that my association with the very extensive engineering-construction business, there was always danger of a conflict. So, in due time, in the very late 1940s, I dissolved my interest in the construction business entirely and devoted it to the shipping business, and I carried that on until 1970, when I liquidated all my business activities and retired.
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