Historic, too. The landmark tobacco settlement reached in June could still unravel; pols and public-health groups continue to voice opposition. But stand or fall, the deal signals a transformation of tobacco-industry culture - from a congenital need for confrontation to a willingness, even an eagerness, to compromise. The credit goes to a new generation of chief executives who, unlike the characters in the old cigarette ad, would rather switch than fight. The eight execs who appeared before Rep. Henry Waxman’s infamous 1994 hearings - and likened nicotine addiction to the craving for chocolate - have moved on. ““It would have been inconceivable for the prior executives to agree to concessions,’’ says Matt Myers, an anti-tobacco activist who played an important role in the settlement talks.
RJR’s Steven Goldstone epitomizes the new breed. A former partner at the staid Manhattan law firm Davis Polk & Wardwell, the litigator was a longtime coun- sel to RJR before taking charge in 1995. An odd choice for CEO, he hadn’t risen through RJR’s ranks hawking Camels or Oreos. Nor was he considered Mr. Efficient Manager. (Davis Polk attorneys still chuckle about the memo he circulated asking if anyone had seen his glasses.) But Goldstone had advantages. An ex-smoker, he didn’t share RJR’s always-fight philosophy. ““This is a guy who always tried to settle cases before going to court,’’ says one RJR executive. Little wonder, then, that in March 1996 Goldstone said the industry should consider settling. His words electrified talks between state attorneys general and White House aides aching for a compromise.
Philip Morris’s Geoffrey Bible is closer to the old model. An Australian, Bible traveled the globe selling Kraft cheese and Miller beer (both owned by Philip Morris). He still smokes Marlboro Menthols, and he was once known for his belligerent pro- tobacco mantra: ““If you fight and you are right, you will win.’’ But his idea of what constituted winning changed last summer, when he saw the promise of a settlement. Insiders say he came to believe that winning in a conference room was better than victory in a courtroom. The Aussie fighter turned conciliatory: he stopped posing with a cigarette in the annual report. And the fact that both Bible and Goldstone ran food as well as cigarette companies made them more willing to make concessions than the heads of their tobacco units.
After Bible arranged a meeting of tobacco bosses this spring (except for Liggett’s Bennett LeBow, who cut a separate deal with tobacco foes), the industry agreed to talks. When the accord was reached, Goldstone told a friend, ““I hope this works.’’ We’ll see. Congress will again invite tobacco execs to testify. This time they won’t liken Marlboros to chocolate.
Bif Tobacco’s bosses once likened Marlboro’s to chocolate. What, smoking could be injurious to your health? Defiance of both science and public opinion was part of the corporate culture. No more. The old guard has passed; realists are now in charge, looking for compromise and predictability.
