A World War II refugee, Werner Michael Blumenthal (born 1926) used his academic and business skills to reach the highest levels of American government, industry, and banking.
W. Michael Blumenthal, one of two children of Ewald and Rose Valerie Market Blumenthal, was born on January 3, 1926, in Oranienburg, Germany, a Berlin suburb. His father owned a women's clothing store that was confiscated by the Nazis in 1938. After selling all their possessions to secure Ewald's release from a concentration camp, the Blumenthals fled Germany for Shanghai, where they joined many other German Jewish refugees.
Michael and his family survived harsh wartime conditions, including internment by the Japanese. He learned several languages, attended school, and worked in a warehouse in Shanghai. He and his sister arrived as refugees in San Francisco in 1947. Blumenthal worked part-time while attending college. In 1951 he received a Bachelor of Science degree from the University of California at Berkeley, majoring in international economics. A member of Phi Beta Kappa, he was accepted at Princeton's prestigious Woodrow Wilson School of Public Affairs, where he earned the Master of Arts and Master of Public Affairs degrees in 1953. He received his Doctor of Philosophy degree in 1956 while teaching economics at Princeton.
Blumenthal, who became a naturalized citizen in 1952, was also a fellow of the Social Research Council, a research associate of the industrial relations section of Princeton's Economics Department, and a labor arbitrator for New Jersey. In 1957, on the advice of a businessman he met on a trip, Blumenthal abruptly switched from academic life to a business career. He accepted a position as vice president and a director of Crown Cork International Corporation, a bottle manufacturer located in Jersey City, New Jersey. But his new career, applying academic theories to practical everyday decision making, only lasted four years.
Through a Princeton connection Blumenthal accepted the federal government position of deputy assistant secretary of state for economic affairs in April 1961, serving under President John F. Kennedy. Blumenthal worked on Kennedy's Alliance for Progress, on commodity trade and tariff issues, bringing his academic knowledge and practical experience to the negotiating tables. In 1963 he was given ambassador rank and was U.S. deputy special representative for trade negotiation. From 1963 to 1967 he was chairman and chief negotiator of the United States delegation to the Geneva conference for the GATT (General Agreement on Tariffs and Trade) treaty among 52 nations.
After this success, he returned to the business world, where he stayed for almost ten years. He joined Bendix Corporation, first in their New York offices as president and a director. By 1972 he became chairman and chief executive officer of the parent corporation, a conglomerate with 86,000 employees headquartered at Southfield, Michigan. During his tenure sales doubled to almost $3 billion and Bendix was rated as one of America's best managed corporations.
Blumenthal supported Jimmy Carter's successful 1976 presidential bid against Gerald Ford, and was asked to join Carter's cabinet. On January 20, 1977, 30 years after arriving in the U.S. as a refugee, Blumenthal was unanimously confirmed by the Senate, becoming the nation's 64th secretary of the treasury.
As treasury secretary Blumenthal was responsible for guiding national fiscal policy; he was in charge of the collection, management, and expenditure of public revenues. He also fully supported President Carter's pledge to assist New York City during its fiscal crisis. At this same time, primarily due to international events, the American dollar had sharply declined and domestic inflation was rapidly increasing. Since national monetary policy was not under his control, Blumenthal operated his department under increasingly difficult conditions.
In the fall of 1979 President Carter, determined to exert more control over the nation's economy, replaced Blumenthal with William Miller and appointed Paul Volcker to be chairman of the Federal Reserve Board. Blumenthal returned to private industry as a director of the Burroughs Corporations in Detroit, Michigan, and became its chairman and chief executive officer in 1981. The manufacturer of computer systems and supporting office products had sales of $4.39 billion and 64,000 employees by 1985. Blumenthal's goal was to make Burroughs the second largest computer manufacturer (after IBM), becoming a $20 billion company by 1993. To achieve this, he merged Burroughs with Sperry Corporation in 1986, creating the nation's third largest producer of computers. Sperry, with $4.91 billion in sales and 73,447 employees, had aerospace, government and defense contracts, computer, and farm machinery divisions. However, the newly merged company, now named the Unisys Corporation, headquartered in Blue Bell, Pennsylvania, had financial difficulties beginning in 1989.
Under Blumenthal's guidance, Unisys had cut overhead and purchased desktop computer and data communications companies; while sales reached $10 billion, debt also increased. The market for Unisys mainframe computers fell. Customers of Sperry and Burroughs computers switched to smaller, less expensive versions. Overseas business suffered from devaluation of the dollar. Between August 1989 and October 1990 Unisys' condition worsened; despite drastic cost-cutting measures, its stock lost more than 80 percent of its shareholder value.
In April 1990 Blumenthal retired from the chief executive officer position, and on November 1, he resigned as chairman of the board and director. However, a new chapter in his life also began in April 1990, when he became a limited partner in the investment bank Lazard Freres Co. of New York. He later accepted the position of co-chairman of an international coordinating group of the bank and was sent to work in Paris, France.
Blumenthal's personal philosophy reflected his experiences in America. He believed that the United States provides unlimited opportunities, and that people are accepted for what they can do and are not judged on their background. Sometimes described as abrupt and aloof, Blumenthal was often responsible for eliminating jobs and closing unprofitable plants—decisions he found difficult to make. He looked forward to a period of social and economic innovation that would help eliminate the national deficit and solve social problems.
From his marriage in 1951 to the former Margaret Polley, Blumenthal had three daughters. He was baptized as a Presbyterian in the 1950s. His avocations included tennis and skiing. He served as a director of the Equitable Life Assurance Society of the United States, the Council on Foreign Relations, the New York Stock Exchange, and Tenneco Inc. He serves as chairperson of the U.S. Russia Investment Fund and is writing a book on Russian history.
Further Reading on Werner Michael Blumenthal
W. Michael Blumenthal has been listed in Who's Who in America since 1970. A good personal description is the Forbes May 28, 1990, article by Jerry Flint, "Master of the Game." His career with Unisys is detailed in a Business Week article on August 29, 1989, by Joseph Weber, "This Is Hardly the Turning Point Unisys had in Mind," and in a Computerworld October 29, 1990, article, "Losses force more Unisys cuts." See also Business Week (April 14, 1989; July 8, 1996), Detroit News (January 26, 1990; October 26, 1990).