Under a 6 a.m. summer sun, the backbone of Johnson Products Co. arrives for work at a legendary South Side enterprise. Stockkeepers, forklift operators and assembly-line workers file through the plant’s brown doors, while others linger outside for a chat and a quick cigarette.
Almost all are pensive, contemplating an ambiguous future because black-run Johnson Products will soon be sold to Miami-based Ivax Corp., a white-run pharmaceutical firm. “People are concerned about what type of changes they are going to make,” says a machine operator.
About 10 miles north, in a 49th-floor Water Tower Place condominium overlooking Chicago’s skyline, company founder George Johnson is contemplating the 39-year-old company’s future, too.
“It’s like the worst nightmare I could have ever had,” said Johnson, 66, who has observed the firm’s affairs from a distance since 1989 when he resigned as chief executive and, as part of a divorce settlement, turned over his controlling stock to his ex-wife, Joan. “Never in my wildest dreams when I was building this company did I believe it would wind up out of the black community.”
For Johnson and many others, the creation of Johnson Products-makers of Ultra Sheen, Gentle Treatment, Classy Curl, Black Tie men’s cologne and more-was proof that even in the face of segregation, blacks could create their own dynasties.
It was hardly considered a model of perfection, however. As the family’s financial status grew, so did frictions, at home and work.
Two sons have been fired from the company. The divorce of George and Joan B. Johnson made Joan the boss and majority shareholder. And George Johnson’s 2-year-old marriage to the white, French-born Renee Derem is ending in divorce.
And, now, Johnson Products’ role as a symbol of black enterprise arguably is over: On Aug. 31, at a stockholders meeting, Ivax will officially acquire publicly owned Johnson Products.
The vote is a mere formality. Joan Johnson, the company’s chairman, chief executive and treasurer, directly controls 52 percent of the stock and she already has agreed to support the merger.
According to the proxy, Joan Johnson-who could receive as much as $37.5 million in Ivax stock as a result of the merger-has signed a one-year employment agreement that will give her a minimum annual salary of $300,000 plus Ivax stock options.
Joan “Joanie” Johnson, the Johnsons’ daughter, is to continue as director of marketing under a three-year pact that provides her a minimum salary of $100,000 plus stock options. She is the only other Johnson family member to remain in a position of prominence with the company. The three Johnson sons no longer work for the company, just like their father, who is now chairman of the board of Indecorp, which operates the South Side Independence and Drexel National Banks (themselves now slated to be acquired, by black investors from Detroit).
Not everyone, however, considers the sale of Johnson Products a loss. Some say they admire the pragmatism of company Chairman Joan Johnson, 63. The company has had a range of problems since the mid-1970s-created in part when Revlon, Alberto-Culver and other beauty care giants entered the ethnic hair care market-and they say it needed the new corporate umbrella.
“What Johnson Products is doing is what every other company is doing that is trying to stay in business,” said Gold Coast salon owner Leigh Jones, who is black. “The only difference is, this is a black company and people are looking at it more closely.”
Richard Pfenniger, Ivax’s senior vice president of legal affairs, suggests that the deal is a sign of racial progress.
“This shows equality in business,” Pfenniger said. “It’s not a question of black and white. This is being done by equals.”
Some workers are unconvinced, including machine operator Mary Johnson, no relation to the ruling clan, who has worked 16 years for the company located just off the Dan Ryan Expressway near 85th Street.
“Now we don’t know what’s going to happen,” she says.
Birth of a salesman
George Johnson moved to Chicago with his family from Richton, Miss., when he was 2. At age 6, Johnson started work collecting milk bottles. Later he shined shoes, delivered papers, swept floors, waited tables.
When he was a junior in high school, Johnson quit school to join his brother, John, and work as a door-to-door salesman for Fuller Products, a black-owned cosmetics company in the vein of Avon. A year later he gathered enough nerve to ask out his comely young neighbor, Joan Betty Henderson.
“We started courting when she was 15 and I was 17,” Johnson said. “I liked her. I always had a crush on her-long before she knew it.” They married six years later.
Johnson worked 10 years for Fuller but spent only one of them tapping on doors and swirling perfume under the noses of South Side homemakers. He joined Fuller’s laboratory staff where German native Herbert Martini taught him how to make lipsticks, foundation and honeysuckle-scented cologne. Johnson became the head production chemist.
In 1953, on the elevator at Fuller Products, Johnson met Orville Nelson, a hotshot hair stylist to the likes of Nat “King” Cole, who was looking for help with his lye and potato straightener, the only formula available at the time.
“I had this product and I wanted to improve it,” Nelson recalled recently. “There were just crude ways of straightening then.”
Johnson took Nelson’s product back to his lab, and he and Martini began trying to mix lye with petroleum. After coming up with a successful batch, Johnson took it back to Nelson, who tried it out on customers.
“One day he said, `This is it. Don’t touch it,’ ” Johnson remembered. “That day, I knew there was an opportunity to start a business.”
Johnson and Nelson worked briefly together selling their hair straightener at Nelson’s shop, but the union didn’t last. In 1954, Nelson launched his version of the straightener: Wave-O. And a 26-year-old Johnson began marketing Ultra Wave Hair Culture, with the funds from a $250 vacation loan.
Meanwhile, Martini-a well-liked man whom Nelson said Johnson “took care of” until his death in 1976-stayed on the sidelines.
“Martini was of a different race,” Nelson explained, “and at that time the races weren’t into coming together.”
Right idea, right time
It wasn’t long before Johnson’s product was the new wave in Chicago and black communities nationwide. But it wasn’t just the product that had people hooked. It was that this aggressive salesman had started a business by, for and about black people.
“It was a heck of a concept and George came along at the right time,” Nelson said. “He took it and made a dance in the street.”
In 1958, Johnson Products encompassed the entire second floor of a South Side warehouse. In 1960, it bought a three-story building.
In 1964 Johnson Products hit the $1 million revenue mark, though it suffered a setback when an electrical fire burned down the company’s plant and most of its inventory. One employee died in the fire. But it bounced back and, during the mid-1960s, the company added its popular Afro Sheen afro care line and Ultra Sheen no-base creme relaxer.
In 1970, sales were at $12 million. In 1971, the company became the first black-owned company to trade on the American Stock Exchange. In 1975, it hit the $37 million revenue mark.
Meanwhile, the Johnson family enjoyed the pleasures of prosperity. They began dividing time in their Glencoe mansion with newer homes in Paris and Jamaica. They bought two cattle ranches in Mississippi. They became major contributors to a myriad of black charities.
But as profits burgeoned, so did competition. Revlon and other major beauty companies entered the black hair care market in the early 1970s. They didn’t come earlier, some hair care experts say, because they did not know the role hair care plays in the black community.
“Revlon, Alberto-Culver and some of these other white companies finally discovered what George Johnson already knew,” said salon owner Jones, whose styles appeared on some of the earlier Johnson Products boxes. “For many black women who want to get ahead in the corporate world, visiting the beauty shop is not something based on whim; it is a necessity.”
In 1975, the Federal Trade Commission ordered Johnson Products and two smaller companies to put warnings of lye content on their relaxer boxes. Revlon, which was becoming Johnson Products’ main competition, was not required to put warnings on its boxes until almost two years later.
George Johnson said the incident almost killed the hair relaxer end of his business, which then accounted for more than 50 percent of sales.
“It was an absolute assassination of the brand name Ultra Sheen,” Johnson said. “The beneficiary here was Revlon.”
Was Johnson targeted by the FTC?
“We can’t respond to that,” said Bonnie Jansen, an FTC spokeswoman. “I can only say that we bring cases as we find them as quickly as we can.”
Whites in management
Years have passed since Johnson Products’ days as a storefront. The company now has about 230 employees headed by a tight cadre of marketing, management and finance managers, including Thomas Polke, the 31-year-old chief financial officer and one of four who serve on the board of directors.
Polke is arguably the modern-day Martini at Johnson Products. Like Martini, he is a white man working for a predominantly black company. Like Martini, he has put in long hours for Johnson Products and he wants the company to succeed.
And like the Martini described by the few who remember him, Polke seems sensitive about the question of race.
“There have always been whites in key roles in management,” said Polke, who was hired away by the Arthur Andersen Co. accounting firm in 1988. “It’s always been our policy to hire the most qualified people, regardless of race.”
But some workers see Polke’s tenure as a sign of changing times. Johnson Products, long a symbol of black entrepreneurial success, is now another impersonal company where white people run things, they say. Polke will remain under Ivax, having signed a five-year contract that will pay at least $200,000 a year, plus stock options.
“All I know is when Joanie (Johnson) came, she brought a lot of white people with her,” said one former employee. “She (Mrs. Johnson) put a lot of people into key positions. The entire entourage was white.”
A happy ending?
The top management’s makeup is not the only thing that has changed at Johnson Products, where the rank-and-file remains mostly black.
In 1989, son John Johnson, 40, was fired by his father from his post as national accounts director. In 1992, former chief operating officer Eric Johnson, 42-identified by some as the company’s “brains”-was fired by his mother, who could not be reached for this story. Eric now owns Baldwin Ice Cream in Homewood.
George Johnson Jr., 31, had only a short stint with the company during the 1980s as a brand manager. He is now in music production.
The Johnsons’ youngest child and only daughter, 29-year-old Joanie-currently the only Johnson offspring at the company-joined in 1991.
While she declined to talk about her family or past problems at Johnson Products, the daughter did suggest the strain of working in a visible, family-owned business.
“Unlike my father, I’m really not interested in expressing to the world my growing up,” said Johnson. “I’d like to keep that private.”
Although the days of Johnson Products as a black-owned company may be over, the hair care industry that it gave birth to-the black beauty salons, barbershops, hair care companies and annual beauty shows-is pushing on.
And befitting an industry based on shampoo-bowl gossip, rumor in at least one of Chicago’s busy black salons has it that George and Joan Johnson may be mending their differences.
One friend of Joan’s said that George, known for lavishing gifts on loved ones, recently gave Joan a gift-“a box from Tiffany’s.”
“Who knows,” said the source. “Maybe they’ll end up back together and it will be a happy ending to the story.”
