The Epic Struggle Between G.I. Joe, Barbie, and the Companies that Make Them
By G. Wayne Miller
Times Books 348pp $25
Two years ago, the maker of Barbie offered the producer of G.I. Joe a seemingly irresistible marriage proposal. Mattel Inc.'s $5.2 billion merger bid seemed like manna from heaven to many Hasbro Inc. shareholders, since it offered a premium of some 75%. And many toy-industry experts saw it as a nearly perfect union, pairing the world leader in dolls with the master of action figures to create an unrivaled colossus.
But that's not the way it was seen back at Hasbro's headquarters in Rhode Island. There, as part of a campaign encouraged by management, a blindfolded Barbie was strapped to a skewer for a "Barbie-Q," and posters proclaimed: "Sure Barbie is a bitch, but she can't have everything." No wonder that within days of making its proposal public, Mattel felt compelled to withdraw it, charging that Hasbro's "scorched earth campaign [had] created an intolerable climate."
Now comes Toy Wars' gripping inside account of the intense rivalry between the world's two largest toymakers and how it led to this dramatic denouement. The book will appeal to any parent wondering how the industry captivates children. But there's a broader theme as well. For in so diligently examining the people who run Mattel and especially Hasbro, Toy Wars serves as an important reminder of how personalities and pride can shape critical decisions and alter the course of an industry.
Indeed, few recent business books can rival the extraordinarily intimate portrait Toy Wars paints of Hasbro CEO Alan G. Hassenfeld and his family, who founded the business in the 1920s. During the five years he was researching this book, author G. Wayne Miller, a staff writer at the Providence Journal-Bulletin, was allowed virtually unfettered access to Hassenfeld and his company, including many of its most sensitive meetings. Not many companies in Corporate America would dream of doing that. The result is a book that, with its rich character depictions, often reads more like a novel than a business tome.
Miller's story revolves around Alan Hassenfeld. It's a tale of a man long overshadowed by his older brother, Stephen, a visionary who transformed Hasbro from a tiny tot one-eighth the size of Mattel into what was, for a time, the world's largest toy company. During the 1980s, while workaholic Stephen was putting in 18-hour days as CEO, Alan "was writing short stories and dating beautiful women," writes Miller. To be sure, Alan, who became president in 1984, was making his mark on Hasbro, especially in international operations. However, writes Miller, there "was never a suspicion the younger brother coveted the older [brother's] job, for truthfully he did not."
But in 1989, when 47-year-old Stephen died of AIDS, Alan was suddenly thrust into the top job. Stephen's death came as a shock. He had long resisted revealing that he was gay or that he had AIDS, even to his family. One week after Stephen's death, the board unanimously elevated Alan to CEO. But in a telling reflection of its anxiety over his worthiness, the most powerful director quipped: "If it doesn't work out, we can always sell the company."
Most of Toy Wars is a blow-by-blow account of Alan Hassenfeld's struggle to prove his merit. Almost invariably, that required jousting with arch-rival Mattel. With both companies hell-bent on expansion through acquisition, they fought over every toy company that came into play in the early '90s. In 1991, Hasbro won a ferocious bidding war for Tonka Corp., the third-largest toymaker. Two years later, Mattel regained the upper hand by acquiring Fisher-Price Inc. And each held the manufacturing license for the Cabbage Patch Kids at different times. Toy Wars presents an especially entertaining tale of how Mattel's then-president, Jill Barad, helped persuade the creator of Cabbage Patch Kids to dump Hasbro in favor of Mattel.
Given the rivalry, it's surprising that in early '95, when Mattel first approached Hasbro about a merger, Hassenfeld's reaction was positive. "It makes all kind of sense," he told a key director. Hassenfeld was intrigued by the idea of becoming the King of Toys. Problem was, the hyperambitious Barad had her own designs on the throne. And Hasbro's lawyers doubted such a linkup would pass antitrust scrutiny. So at the end of June '95, a still-indecisive Hassenfeld told Mattel he wanted to put the talks on ice.
Six months later, Mattel was back with another, far more menacing offer. Mattel warned that if Hasbro did not quickly accept, it would go public--which it did on Jan. 24. This offensive, writes Miller, galvanized Hassenfeld to fight. Using political connections, he quickly got Rhode Island officials to demand an antitrust probe, the specter of which helped persuade Mattel to back down. But the victory came at a price, for Hassenfeld now faced more pressure than ever to satisfy shareholders. Still, within Hasbro, he was at last seen as a hero in his own right.
Unfortunately, Miller did not gain anything like equal access to Mattel. As a result, Toy Wars doesn't do justice to Mattel's point of view. Nor does the book have any photos of the people and toys that come alive within its pages. Still, this is an unusually candid business book. Some might say that the exposure of so much detail should be embarrassing to a company. But it is through these particulars that Toy Wars makes us care about one man's struggle to shoulder the burdens of the corner office.