|Born:||June 12, 1916|
|Birthplace:||New York City, New York, U.S.|
|Died:||September 21, 1992(aged 76)|
|Deathplace:||Mobile County, Alabama, U.S.|
|Business executive, President of Finances, Tastee Freeze, President McDonald's, 1955-1967|
|1939-1992, his death|
Harry J. Sonneborn (born June 12, 1916,-died September 21, 1992} was the first president and chief executive of McDonald's Corporation.
Life and career
The adopted son of German Jewish immigrants, Sonneborn was raised in New York City.
Work with McDonald's Corp.
A former vice president of finances at Tastee Freeze, Sonneborn approached Ray Kroc with a revolutionary new financial idea for franchising in 1955. Sonneborn quickly rose to the top serving as McDonald's president until he resigned in 1967 due to a dispute with Kroc; who had the "last word" as the company’s CEO. Convinced that Kroc was leading the company into trouble, Sonneborn sold his sizable block of McDonald's stock for three million dollars and left the company. Selling off his stock was one of the few financial mistakes he ever made as McDonald's stock split three ways over the next decade. Had Sonneborn waited to sell, he would have made over one hundred million by 1977, and by the time of his death in 1993, his stock would have been worth a cool billion. He ultimately made up for his underestimation of McDonald’s future under Kroc, but his bruised ego never quite recovered. Sonneborn refused to ever eat at a McDonald’s again, and stuck to his guns until the day he died.
Other business interests
After leaving McDonald’s, Sonneborn continued to be heavily involved in the business world through the stock market, capital investments, and banking. He and his wife Aloyis founded several philanthropic foundations, and were to a great extent involved in charitable organizations and fundraisers. During his final years, Harry J. Sonneborn devoted himself to entertaining close friends, travel, and his hobby of photography. He was posthumously vindicated by Ray Kroc several years after his death, and just months before Kroc himself died.:
In the book, McDonald’s: Behind the Arches, Love (1995) the secret was revealed: “What converted McDonald’s into a money machine had nothing to do with Ray Kroc, or the McDonald brothers, or even the popularity of McDonald’s hamburgers, french fries, and milk shakes. It was Harry J. Sonneborn.”
“McDonald’s real moneymaking engine was its little-known real estate business, Franchise Realty Corporation; envisioned and created by Harry Sonneborn. The obscure McDonald’s alter ego company was based on Sonneborn’s unique even lesser known financial formula.”
Highly important as McDonald's CFO, Sonneborn's was less successful in his role as CEO. The same book McDonald’s: Behind the Arches also reveals how, due to Sonneborn's conservative management style after mcDonald's IPO, the company quickly lost ground to competitors like Burger King and Burger Chef. Only when Fred Turner took over did the company get back its innovative and entrepreneurial spirit.
"Instead of increasing new store openings each year as McDonald's financial base expanded, Sonneborn did the exact opposite.(..) He decreased the number of new stores built in each of the next three years. (...) At precisely the time when most companies shift to high gear, Sonnborn put McDonald's into neutral.(p. 254). Observed Gerry Newman, who as the company's chief accountant was well placed to witness the growing mounds of red tape: "In the Sonneborn era, everything was controlled. Everything had to have a purchase order, initialed and counterinitialed.(...) And paperwork sat on desks sometimes for weeks, because people could only handle so much.(p. 257)"
He and wife Aloyis founded several philanthropic foundations and were to a great extent involved in charitable organizations and fundraisers. During his final years, Sonneborn devoted himself to entertaining close friends, travel, and his hobby of photography. Just months before Ray Kroc died, he commented (Love, 1995): “Harry alone put in the policy that salvaged this company and made it a big-leaguer. His idea is what made McDonald’s rich.”
Personal/Family life and Death
His marriage to his first wife, June, produced a son and a daughter. After a divorce, Sonneborn married his second wife, the former Aloyis Keisterwho remained devoted to him until his death in 1992, due to complications from diabetes.
- Love, John F. (1995). McDonald's: Behind the Arches. New York: Bantam Books.
|This page uses Creative Commons Licensed content from Wikipedia (view authors).|