Irwin Jacobs: The Eternal Opportunist

In early 1965, floods were predicted for large swatches of the Midwest. Despite his father’s misgivings, Jacobs, armed with data he’d gathered during a visit to the state climatologist, hired a plane and dropped in on city officials along the floodplain, signing them up and guaranteeing a price for the burlap sacks then used to make sandbags. In Minneapolis Jacobs ordered tens of thousands of the empty sacks from a manufacturer in North Carolina, then waited for the rivers to climb their banks. “We had so many gunny sacks in our building there was no room to walk,” he says. “Dad was a nervous wreck. He said, ‘Son, we’re going to go broke if this doesn’t work.’ I said, ‘Dad, you gotta have faith.’ ”

Young Jacobs was having sleepless nights over the gambit himself. Finally, Mankato called and asked for as many bags as he could deliver—immediately. “I had one guy who could drive a semitrailer truck,” Jacobs says. “But I went out and rented two eighteen-wheelers, loaded them with bags—about 50,000 bags to a truck—and left at 10 o’clock that night. I told the other driver, ‘Don’t let me out of your sight!’ because I’d never driven a semi in my life and couldn’t turn a corner.” Two hours later, Jacobs and his helper were unloading the bags in Mankato. “We were hungry and scared, and the river was rising.” But the mission had been accomplished. Over the next several weeks, Jacobs’ wager with the weather continued to pay off for both the company and the endangered communities, and his success supplying sacks along the Mississippi and its tributaries led to similar deals with the Canadian government. By that time, Jacobs was essentially running the business, though he was not yet 25.

The sandbag story contains several key pieces of Jacobs’ lifetime narrative, including the importance of family, a reliance on self-confidence and intuition, a willingness to make educated yet risky bets, and an uncanny instinct for the moment to act. The next relevant chapter of that narrative comprises his purchase, in 1975, of the Grain Belt Brewery in Northeast Minneapolis, his eventual sale of the Grain Belt brand to G. Heileman, and his sale of the historic building and grounds to the city of Minneapolis, for a cumulative profit of roughly $10 million. Though some people questioned his intent to run the brewery long term (he still insists that was his plan), his was suddenly a known name beyond the family business.

In 1976, Jacobs drew the attention of the larger world when he came out of nowhere—that’s Minneapolis as viewed from New York City—to buy the receivables of W.T. Grant, a bankrupt national dime-store chain. The Wall Street Journal would dub the upstart “dealster” from flyover land “Irv the Liquidator,” which did not bother Jacobs a bit. “We made a killing,” he says of the Grant deal. “I think we paid $44 million, then got our money back in 72 days and made a ton of money on it after that.”

That “we” included, significantly, Carl Pohlad, who would prove to be the second essential older man in Jacobs’ tale and, in Jacobs’ words, a “surrogate father” following Samuel Jacobs’ death in 1980. Pohlad, whose holdings at the time included Marquette Bank, had lent Irwin Jacobs—after the latter’s 15-minute straight-talk appeal—$4.5 million for the Grain Belt purchase. Beginning with the Grant deal, Pohlad was Jacobs’ partner, not his banker—and, quickly, a whole lot more. Jacobs says, “I told him, ‘I’m ready to go make something happen out there,’ and Carl said, ‘Whatever you want to do, go out and do it.’ And he meant it. We’d have lunch and I’d say, ‘Carl, I’m going to buy as much Disney [stock] as I can,’ and he’d say, ‘You’re not going to do it without me.’ One day I called him at home and said, ‘Carl, I just bought 51 percent of the Vikings.’ He said, ‘Well, what about me?’ I said, ‘Well, we can be partners if you want.’ And he said, ‘I’m in.’ ”

They were, on the face of it, an odd couple. Jacobs, a talkative, not especially religious Jew and immigrant peddler’s protégé, was almost 30 years younger than Pohlad, a taciturn practicing Catholic who’d boxed, sold cars, and made his own circuitous way to the big money. Yet despite the almost comical contrast in provenance and plumage, Pohlad and Jacobs were birds of a feather. They shared the white-knuckle thrill of high-stakes financial adventure and a cold killer’s instincts when hammering out a deal.

Though not unexpected, Pohlad’s death, according to several persons who know Jacobs well, affected Jacobs at least as deeply as anything else during the craziness of the past year—including his laying off of 2,000 employees (out of a total workforce of 5,500) at his billion-dollar corporate flagship Genmar boat business and his brother’s tragic suicide.