Welcome back, fellow GolfSpies, to another edition of History’s Mysteries.
Today we’re stepping into Bill and Ted’s phone booth for an excellent adventure back to the late ’80s. Specifically, we’ll look at the remarkable circumstances surrounding one of the top-selling irons of all time: the Hogan Edge.
Dubbed “The ‘Impossible’ Club” by Hogan, the Edge was a perfect union, blending cavity-back, perimeter-weighted game-improvement forgiveness with pure forged feel. That’s standard procedure today but in 1988 it was revolutionary. There was nothing else like it and it sold in droves.
And it’s no exaggeration to say that without the Edge, the Ben Hogan Company would not have survived the decade.
So let’s take a trip back to 1985. The Hogan Company is about to begin a rollercoaster ride through profit and loss, high drama and four different owners in eight years. And despite all the tumult, it delivered an icon.
History’s Mysteries: The Hogan Edge
Ben Hogan was literally right off the boat in New York City after winning the 1953 Open Championship at Carnoustie when he let it slip to reporters he was getting into the golf club business. His new company was already up and running in Fort Worth, Texas. But the crafty and always purposeful Hogan didn’t mention it to keep prying eyes away until he was ready.
You know the legend. The first clubs to come off the assembly line displeased Hogan and he ordered them scrapped. Among other problems, the borings in the hosels were inconsistent and the heads, for the most part, looked terrible.
This was intolerable for a man who insisted clubs look and feel like jewelry. More than $150,000 worth of inventory ($1.6 million in today’s dollars) was melted down. That caused some consternation with his partners, as orders for the new Hogan irons were already coming in. Hogan then mortgaged everything he owned to buy them out and do things his way. His friends Marvin Leonard and George Coleman eventually put together a group that included Bing Crosby, New York Yankees owner Dan Topping and California car dealer Eddie Lowery to clear Hogan’s name off the loan.
(And, yes, that’s the same Eddie Lowery who was Francis Ouimet’s caddie at the 1913 U.S. Open.)
Hogan ended the decade by reaching nearly $2 million in sales with a tidy 10-percent net profit. Then, eager to pay back his benefactors and focus solely on club design, Hogan sold his company to AMF in 1960 for $3.7 million ($41 million today). The deal allowed Hogan to give Leonard, Coleman and the rest an excellent return on their investment. For his part, Hogan cleared a cool $1 million.
The AMF Years
American Manufacturing and Foundry was established in Brooklyn, N.Y., in 1900 by a gentleman named Rufus Patterson. Patterson made his fortune by inventing the automated cigarette manufacturing machine and quickly expanded his empire.
AMF would eventually move into machinery, industrial manufacturing and consumer goods. That business wing included bowling equipment and alleys, bicycle manufacturing, Harley-Davidson motorcycles and boat manufacturing, including a company called Hatteras Yachts.
Remember that name.
The AMF sale allowed Hogan to remain chairman of the board and serve as a club design consultant. However, it didn’t take long for the “chairman” title to become largely ceremonial. For the rest of his life, Hogan held no real authority in the company that bore his name.
From the ‘60s into the ‘80s, the Hogan Company earned a reputation for making the highest quality forged blades and some of the game’s most innovative woods. But, like fellow legacy OEMs Wilson, MacGregor and Spalding, Hogan didn’t pay much attention to what was going on with a little putter company down in Scottsdale, Ariz., and its quirky engineer owner Karsten Solheim.
The Eye of the Tiger
Even though PING had been making irons for over a decade, the legacy OEMs still considered it a niche putter company. The PING Eye2 changed all that when it was released in 1982. Its unique profile, generous offset and distinctive cavity introduced game-improvement technology to the masses.
And the masses ate it up.
The Eye2 spent nine years in the PING lineup and remains the best-selling iron of all time. It was also one of the most profitable irons ever made. The investment-cast head was less than half the cost of a forged head and PING sold the Eye2 for the same price as forgings. By the mid-’80s, PING was giving Hogan and the rest of the industry severe headaches.
“Our main competitor was PING and we didn’t have a club that could compete,” former Hogan president Jerry Austry tells MyGolfSpy. “And without that club, we were going to shrink.”
Austry, a former executive with Wilson Golf, joined Hogan as vice-president of manufacturing in 1985.
“Our revenues had grown to about $50 million,” he says. “Clubs still had a high gross margin but the gross margins for balls and sportswear were much lower. As a result, net profit was suffering.”
1985 was also the year Austry and the other Hogan team met Irwin Jacobs.
Irv The Liquidator
Jacobs was a corporate raider, pure and simple. And he was good at it.
A college dropout, Jacobs made millions buying struggling companies and selling them at a profit. In 1975, at age 33, he bought the Grain Belt Brewery in Minneapolis for $4 million. Eight months after failing to turn the company around, he sold the brand to a competing brewery for $8 million. A few months later, he sold the land Grain Belt sat on to the city of Minneapolis for nearly $5 million.
That’s when he earned the nickname, “Irv the Liquidator.”
In 1984, he tried to buy out Kaiser Steel, the aerospace firm AVCO and even Disney. He was outbid in all three instances but still made a $90-million profit by driving up the price of the shares he acquired in those companies.
In early 1985, Jacobs and his holding company, Minstar, were eyeing AMF. Specifically, he wanted to buy the Hatteras Yacht company to go with his other boating interests.
AMF, however, had no interest in selling Hatteras. Not one to take no for an answer, Jacobs started a hostile takeover for the whole enchilada. At the time, AMF was a billion-dollar operation but was undervalued and over-diversified. Stock prices were taking a hit due to a couple of quarterly losses and Jacobs offered stockholders a deal they couldn’t refuse. By June, he purchased control of AMF for $600 million. That included AMF bowling interests, Head Ski and Tennis and Hatteras Yacht.
And Ben Hogan.
The Liquidator Starts Liquidating
Jacobs announced plans to sell AMF’s industrial and energy services business a month later. He would retain the leisure division except for AMF Bowling. Jacobs sold that to Virginia businessman Bill Goodwin for $225 million. We’ll get to know Goodwin later.
“Jacobs said he got all his money back on the deal by selling off assets,” says Austry. “That’s the kind of corporate raider he was. He ended up with Hatteras, Hogan, Head Ski and Tennis, Tyrolia ski bindings and an underwater diving equipment company basically for free.”
By 1986, the market had started getting away from Hogan. The company still had a reputation for high-quality forged blades but golfers wanted the PING Eye2. By that time, PING became embroiled with the USGA over the Eye2’s square grooves, a controversy that just made golfers want them more.
Hogan countered with the Radial and the Magnum, which the company called “player’s assist” irons. But neither had the Eye2’s distinctive cavity-back which consumers equated with game improvement. As a result, the Hogan Company posted a loss for the first time in its history. Minstar was not pleased as you can’t liquidate a company for top dollar if it’s in the red.
“Everybody was pointing fingers,” says Austry. “Minstar started asking about the president and whether I would like his job. I told them it’s up to them to evaluate the job he’s doing. I told them I’d like to be president someday but not by stabbing my boss in the back.”
But on the day of the 1986 Christmas party, Minstar fired Hogan’s president and gave the job to Austry. “They popped the presidency on me. And I’m the kind of guy that says ‘OK, let me see if I can fix this.’”
Bringing Hogan Back
Austry’s first order of business was to get budgets back in line to reclaim profitability. The next was to learn why Hogan was losing market share … and money.
And it wasn’t just Hogan. Wilson, MacGregor, Dunlop, Spalding and other legacy OEMs were also shrinking while PING, TaylorMade, COBRA and others were growing. Industry stats from the time showed forged iron sales were down 30 percent and wood sales were down nearly 40 percent. Metalwoods and game-improvement iron sales, however, were booming.
A focus group study showed Austry a few things. First, golfers equated Hogan with high-quality forgings for better players. Second, those same golfers wanted cavity-back, perimeter-weighted irons that were easy to hit.
Additionally, visits to pro shops taught Austry something else. “No one would ask about Lanny Wadkins, Mark O’Meara or any one of the excellent pro staff we had at the time but they would ask about Ben Hogan.”
The Invisible Man
By the ’80s, Hogan had become the Invisible Man even inside his own company. He’d speak at the annual sales meetings and even berate management for what he considered poorly designed clubs but he had no authority or responsibilities. Hogan did, however, have influence with R&D and, as Austry learned, in the marketplace. Austry knew the company needed a forged cavity-back iron to compete and he needed Hogan’s help to sell it. Otherwise, the Hogan Company wouldn’t make it to the end of the decade.
“I told him we lost money last year and the line was stale,” says Austry. “We’re getting beat up in the field by cavity-back clubs and metalwoods. I told him, ‘I need your help to rebuild the reputation of the company.’ He said OK.”
Austry did leave out one little detail of that meeting with Hogan and it was a detail no one at Hogan other than Austry knew. Just one year on the job, Austry had turned a $2.5-million loss into a $2.5-million profit. But a week after the 1987 PGA Merchandise Show, Minstar told the presidents of its remaining AMF companies, save for Hatteras, that they’d be put up for sale.
Irv the Liquidator had struck again.
Making the Hogan Edge
Making the Edge a reality was now a race against the clock. The PING Eye2 was still dominant and the Tommy Armour 845s would join the fray that August. Hogan’s R&D and manufacturing teams, meanwhile, were struggling. Mass-producing a forged, cavity-back, perimeter-weighted iron had never been done and the team kept hitting potholes, particularly with tooling.
Meanwhile, Minstar announced its plans to sell off Hogan and there were rumors a Japanese firm was a leading bidder. If you remember the ’80s at all, you remember Japanese conglomerates were on a buying spree in the U.S. Japanese interests snapped up commercial real estate, tech companies, banks, Hollywood studios and even New York’s Rockefeller Center.
Pundits referred to it as an economic Pearl Harbor.
But all of that was in the background in Fort Worth. Engineers solved the tooling issues and the Edge was speeding toward reality. Hogan planned a mid-1988 release, but another pothole—a huge one—appeared up that spring.
The Hogan factory went on strike.
The Hogan plant unionized in the early ‘60s but there had never even been a hint of a strike. Instead, Austry’s team turned 1985’s red ink to black with a $2.5-million profit in ’86 and a $4-million profit in ’87. Labor negotiations started that spring with the union asking for a 10-percent pay increase. Minstar negotiators refused to make a counteroffer.
A few weeks later, Minstar put its non-negotiable proposal on the table: a 40-percent reduction in hourly wages. Take it or leave it. The stunned union left it and hit the picket line.
Breaking the Union
Minstar was prepared. Austry says ownership had replacement workers ready with plans to relocate to Mexico or California if necessary. Minstar also hired an armed private security firm called Knuckles (seriously) to patrol the grounds. Austry says he and manufacturing VP Doug Hendershot regularly received harassing phone calls and even death threats. Hendershot was driven to work each day in a bulletproof van with solid rubber tires.
Amid the strike, Minstar finalized a deal to sell Hogan to the Japanese company Cosmo World for $53 million. The deal was contingent on Minstar settling the strike. Left unsaid was that the settlement had to be on Minstar’s terms. Minstar held firm and the union ultimately settled for the 40-percent pay cut.
The sale to Cosmo World and its owner, Minoru Isutani, was finalized that spring. When Isutani came to visit, Austry says management and salaried workers were instructed to line up and bow as Isutani walked by, without saying a word. Later, Isutani and his entourage went to Shady Oaks GC to meet with Hogan. That’s when Hogan asked if Isutani understood English. When assured that he did, Hogan famously told him, “You’ve just bought the family jewels. Don’t f**k it up.”
The deal was done but Hogan was left with an angry, resentful and sometimes vengeful workforce. Austry says there were instances of machinery sabotage and deliberate slowdowns of critical processes. But despite it all, Hogan was ready to launch the Edge in August 1988. Robot and player testing showed the Edge to be more accurate than other cavity-backs and just as long, if not longer.
With apologies to Bob Parsons, Hogan was about to go Kaboom, baby.
The Hogan Edge: A Record Roll Out
Orders for the new Hogan Edge poured in almost immediately. The company projected it would sell 60,000 sets that first year. But in less than a month, more than 50,000 orders were booked. By the time Edge print and TV ads hit at the end of October, orders reached 100,000. By the end of the year, that number topped 120,000.
“We ran round the clock, seven days a week,” Hogan manufacturing chief Steve Dreyer tells MyGolfSpy. “We didn’t get caught up for a year. It was unbelievable. We were just balls to the wall, running 5,000 forgings a day.”
1988 was Hogan’s best year ever for sales and profits. Despite that, Austry says he was getting no feedback from Cosmo World on plans for 1989. Just after Christmas, Austry finally met with Cosmo World’s Dick Babbitt who told him there would be a new direction for the Hogan Company.
“OK, what do you want me to change to follow the new direction?” he asked.
According to Austry, Babbitt replied, “You don’t understand. That new direction doesn’t include you.”
Austry was fired during the biggest year Hogan ever had, with sales topping $70 million. He was told not to go into the office the next morning but to clean out his office that night.
“They fired me right after we introduced the Edge,” he says. “I was going to be riding on my white horse because we just introduced it and we’re outselling PING three to one. And then I was gone.”
History’s Mysteries: The Hogan Edge Postscript
The Edge stayed current in the Hogan lineup for nearly a decade. The 1991 update was called the Edge GS after Hogan master model maker Gene Sheely. In 1995, the Edge GCD capitalized on the oversized iron trend of the day.
Callaway, which acquired Hogan when Spalding/Top-Flite filed for bankruptcy in 2003, combined the Edge with Hogan’s other iconic name to create the Apex Edge series. The last iteration of Hogan also sold irons under the Edge nameplate.
Sadly, that version of the Ben Hogan Golf Equipment Company closed its doors, most likely for good, this past July on the 25th anniversary of Ben Hogan’s passing.
Despite turning Hogan around from a $2.5-million loss in 1985 to record sales and profits in 1988, Austry found himself without a job. He was replaced by David Hueber who would manage Hogan through the even crazier Cosmo World years (which we’ll examine in our next History’s Mysteries). Austry soon resurfaced as president of Head Golf. Head, of course, was one of the AMF subsidiaries bought, and later liquidated, by Irwin Jacobs.
Bill Goodwin would buy Hogan from Cosmo World in 1993. That’s the same Bill Goodwin who bought AMF Bowling from Jacobs for $225 million. Goodwin would fire Hueber, close Hogan’s Fort Worth operations and move the company to Richmond, Va. He lost $100 million in five years before selling to Spalding.
Jacobs, meanwhile, held on to Hatteras Yacht, the company he wanted all along, until 2001. That’s when he sold Hatteras to the Brunswick Corporation. Yes, that’s the same Brunswick Corporation that owned MacGregor Golf from 1958 to 1978. You can’t make this stuff up.
Tragically, Jacobs and his wife Alexandra died in 2019 in an apparent murder-suicide. Reports said Jacob’s wife was wheelchair-bound and suffering from dementia and that Jacobs killed his wife and then himself.
More To Follow
There’s much more of the Hogan story left to tell and we will do just that in our next History’s Mysteries. But until then, there’s a reading assignment for those so inclined. Austry and Hueber have written excellent books on their careers in golf and Hogan in particular. Hueber’s is called “In the Rough: The Business Game of Golf”
Austry’s wonderful memoir, “The Hogan Edge”, has just been released. It’s available on Amazon, Barnes and Noble and as a download on iTunes and Google Play.
We hope you enjoyed this latest installment of History’s Mysteries. I look forward to reading your comments.
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