Salt Lake City
“I was devastated,” recalls Jon Huntsman Sr. “I couldn’t believe what I was hearing. When you’re working on a project of this scale—when you’re trying to realize your dream—the last thing you want to hear is that your partners are backing out.”
It was 1995. Huntsman had been working on plans with a major European pharmaceutical firm to build a top-flight cancer center in Salt Lake City. Three years of delicate negotiations had gone into forging the partnership. “I went overseas with Utah’s Sen. Orrin Hatch to meet with the chairman of their board,” sighs Huntsman. “Their president had agreed to the arrangement. Everything was approved, on our side and on theirs. It took a lot of hard work, but we finally got everyone at the table to sign off on the deal.”
The agreement called for both parties to phase in their funding. Huntsman’s partners would take the lead, providing $100 million to underwrite the first phase of the project: building research centers, examining rooms, clinics, offices, and other auxiliary spaces. Huntsman would then put forward another $100 million to initiate the second phase: construction of an in-patient cancer hospital, intended to augment the outpatient treatment at the cancer institute.
Two weeks before the announcement of the first phase, the company pulled out of the deal. “They told me that their profits weren’t sufficient to allow them to honor their commitment,” says Huntsman. “I couldn’t believe what I was hearing.” The withdrawal came at a critical moment. Plans had been drawn up and construction crews were set to begin. And now the entire project was in danger of falling apart.
“We decided as a family that we would go ahead,” Huntsman concludes. “We would do it all ourselves. We would put up the first $100 million—which ultimately came out to $130 million—and then we’d honor the second $125 million commitment, too.”
The Riverboat Gambler
Glass display cases line the ground-floor hallways of the Salt Lake City headquarters of the Huntsman Corporation. Some hold scale models of the company’s refineries and manufacturing plants around the globe. Others showcase the many household products that depend on the chemicals Huntsman produces. Still others display the honors and awards Huntsman has received over the years.
One case holds a bronze statue, about two feet in height. It depicts a man, standing tall, hands on his lapels and six-shooters on his hips. His chin is held high; his eyes, locked forward. It’s a statue of a riverboat gambler. It was a gift, intended to commemorate Huntsman’s 1982 purchase of a polystyrene manufacturing plant in Belpre, Ohio.
Huntsman paid $42 million in a highly complicated, highly leveraged, three-party exchange. He mortgaged everything he had, including his family home, to put up $500,000 in cash equity; he then convinced ARCO Chemical to finance $10 million and Shell Chemical (from whom he was buying the site) to guarantee a $12 million bank loan. A former college classmate then at Union Bank helped secure the final $20 million note. Reporting on the deal, Modern Plastics magazine dubbed Huntsman “the riverboat gambler.”
It was a fitting tribute to a man who spent his career managing outsized risks. Even his entry into the world seemed precarious; the attending physician mistakenly thought that the newborn Jon had died in childbirth. Much of his childhood was likewise touch-and-go. His family moved from one rural Idaho town to another, constantly looking for work. In 1950, his father—then 40 years old—decided to return to college. The family moved to Palo Alto, California.
Huntsman thrived at the public high school, where he was elected student body president. In his senior year, he met Harold Zellerbach, chairman of Crown-Zellerbach Paper, the nation’s second-largest paper company. Zellerbach was impressed by the young man, and arranged a scholarship for him to attend the Wharton School of Business at the University of Pennsylvania. Huntsman graduated at the top of his class, went on to serve in the Navy, and afterwards picked up an MBA at USC.
His first job was with Olson Brothers, an egg-producing company outside Los Angeles. (“It’s about as unglamorous a start as a Wharton graduate ever had,” he quips.) In 1967, at age 30, he was named president of the container business, a 50/50 joint venture with Dow Chemical Company. He led the effort to replace pulp-paper egg cartons with styrofoam. Within 18 months, he took the Dow subsidiary from heavy losses to a substantial profit. And he realized he could do it on his own.
He decided to launch the Huntsman Container Company. It took two years to build the first plant, but by 1972, his company was manufacturing plastic items—plates, cups, eating utensils—for the food-service industry. His big breakthrough came in 1974: a styrofoam clamshell container. McDonald’s began using it to package the Big Mac. Other innovative plastic packaging items quickly followed. Huntsman was soon regarded as a leader in new product development.
In 1982, Huntsman formed the Huntsman Chemical Corporation in Salt Lake City. The next two decades saw explosive growth, fueled by high-wire acquisitions and vertiginous financing. Between 1985 and 2000, 35 of the 36 companies Huntsman acquired turned out to be profitable, often impressively so. Today, the company has approximately 12,000 employees. Revenues in 2011 were over $11 billion—and revenues for 2012 are expected to exceed $12 billion.
Huntsman may have originally been called a riverboat gambler for the risks he took in business—but the nickname fits his philanthropy, too. “There’s an assumption that you’re not supposed to take massive risks for charity,” says Huntsman. “Well, we have. In fact, I can’t think of anyone else who has taken the same chances we have to honor our charitable commitments.”
It was a gamble when Huntsman decided to pick up his original partner’s share and fund the first phase of the cancer institute. In 1999, the research facilities were formally opened. “But, in order to conduct clinical trials, we needed access to patients,” notes Huntsman. “And in order to have access to patients, we needed a major hospital.” It was time to pay for the second phase, the phase for which he had originally volunteered. Unfortunately, it was a particularly bad moment for Huntsman to commit to another nine-figure donation.
Around 2000, Huntsman’s business faced a perfect storm. The price of natural gas—the essential raw material at his plants—was exploding, shooting from about $2 to over $10 per million BTUs. At the same time, competitors Total Fina Elf and BASF were sharply expanding their production capacity in North America. A relatively strong dollar was weakening exports. Profit margins were shrinking. The bond market was trading Huntsman high-yield debt at 25 percent of its face value. Huntsman’s own financial and legal advisors recommended declaring bankruptcy.
Huntsman refused. He instituted cost-cutting programs throughout the company, refinanced debt with all 87 of his creditors, and offered bondholders the option to exchange debt for equity. Within three years, the company was back on firm footing. Throughout these tumultuous years, Huntsman remained firmly committed to personally funding the second phase of the Huntsman Cancer Institute (HCI).
In April 2000, he announced his second pledge: $125 million. “On several occasions,” says Huntsman, “I had to borrow to meet my commitments relative to HCI. Those loans ranged from $30 to $50 million, pledging as collateral privately owned Huntsman Corporation stock and even once my house in Deer Valley.” He breaks into a broad grin. “We don’t wait until some ideal time to give away money, because the truth is, there’s never an ideal time to give away money.”
Diagnosis and Decision
In 1992, Huntsman went to his doctor for a routine check-up. He was in for bad news. The physician diagnosed him with prostate cancer. Huntsman had good reason to be afraid. Cancer had taken a heavy toll on his family. His father had died from prostate cancer only two years earlier. In 1968, his mother died in his arms. She was 58 years old. The cause of death: breast cancer.
Huntsman underwent surgery at the University of Utah. He spent 11 nights recovering in the hospital. “I was terrified the whole time,” he recalls. “And I was incredibly lonely.” The room had practically no accommodations for family members. In the darkest hours of the night—when he most wanted to look over and see his wife, his children—all he would see was an empty chair.
For all of Huntsman’s money, for all his connections, the only thing the hospital could offer was a chair. If this was the best treatment one could reasonably hope for, Huntsman wondered, what would the worst look like?
That experience—repeated again during three subsequent bouts with cancer—had a powerful effect on Huntsman. He and his wife had long been committed to serious philanthropy. They decided they would build a superb cancer institute, a place that conducted pioneering research while providing unparalleled patient care.
In 1993, the Huntsman family reached a decision. They would locate the cancer center in Salt Lake City, and donate $10 million to the University of Utah to seed the project. The University of Utah couldn’t offer matching funds, but Huntsman was undeterred. “We built here even though we didn’t get anything,” he notes. “We made that call for a couple of reasons. First, this is our home. This is where we live and work. We were happy to build the cancer institute in our community. Second, we built here because this region lacked a comprehensive cancer center. Before HCI, the six states of the Intermountain West had neither an NCI [National Cancer Institute]-designated cancer center nor a member of the NCCN [National Comprehensive Cancer Network].”
From Genealogies to Genetic Therapy
Huntsman had a third reason for placing his cancer institute in Salt Lake City. The Church of Jesus Christ of Latter-day Saints has compiled extensive genealogical libraries that Huntsman believed could be an invaluable asset in the quest to understand the genetic basis of cancer.
“Shortly before his death, Howard Hughes started a program in genetic research in Salt Lake City,” says Huntsman. “Through the Howard Hughes Medical Institute, there were already many scientists here, studying the family history archives as part of their research on the genetic origins of disease. I wanted to build on their work, with a specific focus on the genetic pre-disposition to certain cancers.”
Since 1994, HCI has managed the Utah Population Database (UPDB). The database is built around family records compiled by the Church, including records with detailed information about the causes of an individual’s death. With 16 million records linked to genealogies, vital statistics, and health records, the UPDB is the world’s largest genealogical database linked to medical and health records. “It’s an incredibly rich source of information that supports research on genetics, epidemiology, and public health,” says Mary Beckerle, CEO and director of the Huntsman Cancer Institute. “Researchers use the database to identify individuals and families that have higher than normal incidence of cancer, to analyze patterns of genetic inheritance, and to identify specific genetic mutations.”
The database also serves as a diagnostic tool. “In 2009,” explains Beckerle, “we had a team of scientists and clinicians who identified a gene that, when it mutates, can result in a rare head and neck cancer. Using the database, we were able to track down all the families in our region that have an inherited susceptibility to this disease. We brought those individuals into our clinics, conducted genetic counseling and testing, and identified the family members with the mutant gene that could put them at high risk for this type of cancer. We found a number of gene carriers who were asymptomatic but had tumors growing. We were able to find those tumors and remove them before they developed into something more ominous.”
“There are multiple cancer centers doing important work,” adds Huntsman, “but what we were able to do with the database—how we were able to reach all those asymptomatic patients—was rather unique.” Huntsman is clearly proud of the research team at HCI. He points to Mario Capecchi, a professor of human genetics at the University of Utah, who is affiliated with HCI. Capecchi developed a technique for manipulating the genes in mice, which has advanced the study of a number of deadly diseases. In 2007, he earned the Nobel Prize in Medicine. “With that kind of intellectual heft, we hope to see major advances in precision therapy for cancer,” says Huntsman. “It’s my greatest hope that someday we’ll be able to inoculate children against the genetic changes that cause cancer.”
As its research capacity continues to ramp up, HCI maintains a busy clinical schedule. The institute performs more than 3,000 surgeries annually, provides more than 11,000 infusion-therapy treatments, and records nearly 60,000 outpatient visits. With its roughly 1,500 employees, HCI treats about 30 percent of Utah’s cancer patients. Those numbers are expected to increase substantially: in October 2011, HCI opened a major expansion, adding 156,000 square feet of new hospital and clinical space.
“We’ve come an amazing distance in less than 15 years,” says Huntsman. “I’m very proud that HCI researchers are credited with identifying more cancer-causing genes than any lab in the world, including the genes responsible for inherited breast, ovarian, and colon cancers, as well as melanoma and malignant paraganglioma. But I think that our best years are still ahead of us.”
In late April, Huntsman announced a new, $41 million donation to HCI. It was specifically directed to further research into the genetic origins of cancer.
“Where Will They Put the Flowers?”
“We don’t try to run the operations,” Huntsman says. “We’re not the right people to direct the research or run the clinical practices. That’s Dr. Beckerle’s job. She oversees the people who conduct the research, educate the public, and treat the patients.”
“But,” smiles Huntsman, “where we get involved—very involved—is with the aesthetics.” The Huntsman family takes a great deal of pride in the look and feel of the cancer institute. “We wanted to build a beautiful place, a place so serene, so comfortable, that a patient could forget about cancer for a while,” he explains.
“I don’t mean this in a negative way, but often university and community hospitals have cookie-cutter layouts,” says Huntsman. “They can feel impersonal, institutional. That’s not what we want. For example, I remember when we were putting up the first buildings for the research facility, maybe 13 years ago. We hired a wonderful architectural team to build the lobby. But the first time I saw it, it looked to me like something you could find pretty much anywhere. So we ripped the whole thing out and put in a new lobby. It cost us another $12 million. And the truth is, it was absolutely worth the extra expenditure.”
That ethos is especially evident throughout the patient-care areas of the hospital. “A patient stepping in the front door should feel as though he or she is stepping into a luxury resort,” Huntsman explains. It’s easy to get that impression. A three-story glass exterior wall drenches the front atrium in sunlight, providing expansive views of the Salt Lake Valley. Inside, the walls are paneled in maple and cherry; the patterned floors gleam with marble from India.
Sunlight likewise fills the chemotherapy infusion center. A series of floor-to-ceiling windows overlook the surrounding hills and valleys. HCI borders the Red Butte Canyon National Research Area, a U.S. Forest Service property that is maintained in a pristine state for research purposes. “Throughout the year,” says Huntsman, “we have deer and moose, foxes and elk, all of which will walk right up to the windows. We see the patients focus on the animals. The look on their faces is one of calm, of peace. They forget about the disease.”
Inside the infusion center, chemotherapy is administered in individual alcoves or pods, or in private rooms for patients who require more privacy due to their illnesses. There are 68 pods in a newer part of the facility, as well as 22 pods in the original area. The pods are arranged in a stadium seating configuration, with each slightly offset so all of the patients can feel as though they were in a private area. “In other cancer centers,” says one physician, “it’s not uncommon to see lines of chairs facing a television.”
The desire to give patients a sense of personal space can be found throughout the hospital’s inpatient rooms. All of the units are trimmed in dark woods and have porcelain-tiled bathrooms. Each room has a large bay window with an expansive mountain view. Patients have 24-hour access to room service from the Point, a gourmet restaurant on the top floor. (Patients undergoing chemotherapy are often acutely sensitive to smell, and many food odors trigger nausea, so the restaurant is sealed off from the patient rooms without any shared air.) Perhaps most importantly to Huntsman, every room has space for family members to visit—and stay overnight.
“We find that family members like to be in the room as much as possible,” he says. “We try to make them as comfortable as we can.” Recalling his own loneliness after prostate surgery, Huntsman insisted that every room have a pull-out sofa-bed. “If a family member can sleep next to their loved one, it helps that patient enormously. It just makes all the difference in the world.”
Before Huntsman green-lighted the second phase of hospital construction, he asked the contractors to mock up a patient’s room in the parking lot. Then he asked dozens of doctors, nurses, and patients to walk through and offer their suggestions. “Immediately,” says Huntsman, “we started to get invaluable feedback. One nurse suggested that we widen the bathroom doorways, so that a patient with an IV drip could easily walk through. Another suggested circulating pumps, so each shower would instantly spray hot water.”
As she walked through the mockup, Karen—Huntsman’s wife of 53 years—asked a simple question: “Where will the families put the flowers?” “Well,” says Huntsman, “that floored us. Nobody had thought about it, but it’s absolutely true. Families bring flowers, and the rooms needed more horizontal surfaces.”
The common areas share a similar human touch. All of the hallways are carpeted and slightly curved. “If you go to just about any large institution—a school, a hospital—the walls are perfectly straight and the floor is almost always linoleum,” Huntsman observes. “We didn’t want an institutional feel.” HCI’s walls are adorned with hundreds of Native American crafts and western-themed works of art. (Huntsman again credits his wife: “Karen not only brought beauty to each room, but gave HCI the look of an art gallery, with beautiful paintings and bronzes attractively placed throughout the facility.”) Small tables with jigsaw puzzles are arranged at regular intervals. Patients will often sit with family members and work on a puzzle for a few hours.
According to the Press-Ganey Survey—a national ranking of more than 1,000 similarly sized hospitals—HCI has ranked in the 99th percentile for in-patient satisfaction since 2009. (It has never dropped below the 96th percentile.) But there is a more immediate measure of how well the hospital treats its patients. Whenever he is at HCI, Jon Huntsman cannot ride an elevator or cross a lobby without strangers approaching him, often with tears in their eyes, thanking him for all he has done.
“My wife and I have been giving to charity ever since we got married,” says Huntsman. “After I graduated from college, I was a gunnery officer in the Navy, making $320 each month. Out of that salary, I would tithe $32 and give another $50 to the Navy Relief Fund. As our income grew, so did our philanthropic giving. For almost 40 years now, we have been giving away large sums of money.”
The numbers certainly bear out his point. The couple gave $53 million to Wharton, much of which went to build Huntsman Hall, the school’s newest and (at 324,000 square feet) largest building. After 25,000 Armenians died in the 1988 Spitak earthquake, the Huntsmans led a private effort that would bring more than $50 million in relief aid and investment funds to rebuild the country. They contributed $27 million to Utah State University to endow the Huntsman School of Business—insisting that the school make programs in ethical leadership a central focus of its curriculum.
“Of the more than 1,200 living billionaires in the world,” writes David Whelan in Forbes, Huntsman is “one of only 19 who has donated at least $1 billion [to charitable causes].” At this point, Huntsman’s total lifetime giving exceeds $1.23 billion, much of which has gone to causes like aiding the homeless, promoting active and healthy lifestyles among the elderly, rewarding outstanding public school teachers, and sheltering the victims of domestic violence. In the early 1990s, Pope John Paul II met Huntsman at the Vatican, where he personally thanked him for his sustained generosity: the tithing Mormon had for years been the second-largest benefactor of Catholic charities in the Diocese of Salt Lake City.
“I signed the Giving Pledge, and was happy to do so,” says Huntsman. “I give Bill [Gates] and Warren [Buffett] high marks for calling attention to philanthropy. But I think everyone on that list can do more. At one Giving Pledge gathering, I told Warren, ‘You need to ask us to pledge 80 percent of our assets to charity, not 50 percent.’ He said, ‘Go slow, Jon. Let’s get them up to 10 percent first, and then work toward 50. Please don’t give your speech on giving away 80 percent. That’ll scare them away!’”
Huntsman gives away money almost as fast as he makes it. “Too many people think that they have to die with their bank full of money,” he explains. “I tend to think the other way. If I die poor, it’s humanity that will have benefited. Of course, it’s not just how much you give away. It’s ultimately how many people you helped, particularly how many who couldn’t otherwise make it without you. Look at me. My whole career was started because Harold Zellerbach, a generous Jewish gentleman, took a chance on me, a poor Mormon boy.”
“I’ve done three big things in my life,” concludes Huntsman. “First, Karen and I have a wonderful family: nine children, 56 grandchildren, and six great-grandchildren. Second, I built a great company. And third, we created the Huntsman Cancer Institute. Karen has been a constant blessing. But in the latter two efforts, my original partners pulled out, leaving me to put everything together myself. Today, I don’t rely on partners or other people. If I want something done, I figure out how to do it and I get it done.”
Huntsman sits in a conference room on an upper floor of the cancer institute. Behind him, a long stretch of windows offers a panoramic view. “I’m really excited about the future,” says Huntsman. “Along this whole mountain”—his arm sweeps widely—“we have land reserved for more buildings. As long as there’s a need, we’ll keep filling the entire side of the mountain with research and treatment facilities. We’ll keep the operation going in good times and in bad, through recessions and depressions. We’ve always figured out how to get money, one way or another. It’s reasonable to say that we’ve contributed or raised more than $1 billion to build and operate these facilities. We may have to buy and sell new businesses; we may have to take out personal loans and pay them back by selling stock or land or even our home. We’ve done all that before, and we’ll do it again.”
He leans forward as his voice drops a notch. “Neither business nor philanthropy are for the faint of heart,” says Huntsman thoughtfully. “You can’t be a wimp. Everybody seems to work against you. You’re fighting bureaucracy right and left, but you just keep pushing. I never take no for an answer. Every day, it feels like you have to fight. But you know what? It always works out fine.”
Huntsman pauses. His eyes scan the horizon. “But you know what I look forward to most of all?” he asks. “I look forward to closing it all down. I look forward to the day when we don’t need any more cancer hospitals or cancer research. I look forward to the day when we take the keys and hand the whole thing over to the Ritz-Carlton. That’s what I’m looking forward to. A world without cancer.”