It was already sweltering in early May on the King Ranch, the South Texas humidity so fierce that by midmorning your shirt was pasted to your back. There was talk of a long, dry summer to come, but for the moment, the managers of the ranch’s cattle division could not contain their euphoria. The roundup for the fall calf crop was just beginning; more than nine thousand calves had to be weaned in a mere three weeks, and they were the heaviest on record, many weighing seven hundred pounds. A sense of urgency filled the air. There was a chance, a good chance if they got some rain, that the cattle division would have one of its most profitable years in a decade.
Maybe that was the reason, some of the cattle managers guessed, that their boss, Stephen J. “Tio” Kleberg, had called a Friday-morning staff meeting at the ranch headquarters, just outside Kingsville. Tio knew how to give his troops one hell of an inspirational speech about the King Ranch. For the 52-year-old Kleberg—the great-great-grandson of Richard King, who had bought this land in 1853—the 825,000-acre ranch was like a religion. It was what gave meaning to his life. He knew the location of all one hundred pastures and 320 windmills on that harsh scrubland, and he knew the exact number of cattle (usually a figure more than 60,000) grazing in the ranch’s four divisions. He could recite every fact and figure about the place, some of which Texas schoolchildren were once required to memorize in their history classes—that the King Ranch is the size of Rhode Island, that there is a month’s difference in the seasons between the northern and the southern ends of the ranch, that the fences on the ranch, if put in a straight line, would extend from New York City to Fargo, North Dakota.
Today there are other ranches in the world that take up more territory and produce more beef, but there is no ranch more famous than the King Ranch. For a century and a half, it has remained an almost mythic symbol of wealth and power, its great white 27-room Big House at the ranch headquarters looming over the surrounding pastures like some feudal castle. The ranch has long been known as the Walled Kingdom, and indeed it looks like an invulnerable fortress, impervious to change. Scattered nearby are tidy white frame homes that house the Kineños, the “King people,” the Mexican American workers and cowboys and their families who have spent their lives at the ranch, and only three miles away lies the town of Kingsville, which was created at the turn of the twentieth century just to serve the ranch.
For six generations, the King Ranch has remained in the hands of one family: the descendants of Richard King. Since his death in 1885, there has always been a family member in charge of the “home ranches,” the four massive divisions of land in South Texas. When Tio Kleberg became head of the ranches in 1977 at the age of 31, he quickly proved himself to be a driven and ambitious cattleman, determined to bring the most modern innovations to the cattle and farming operations. Small and wiry, with sharp blue eyes and an Old West gunfighter’s mustache that drooped over the sides of his mouth and curled up at the ends, he carried an unlit Henry Clay cigar in one hand and didn’t hesitate to use his other hand to slap a cowboy on the back and encourage him to work harder. Tio believed, says Leroy G. Denman, Jr., who was the ranch attorney for almost fifty years, that “anybody who works for King Ranch ought to work like he does, which is from four a.m. until midnight, seven days a week, and that if you don’t have that kind of dedication, you don’t have any business here.”
In fact, considering how much work there was to be done that Friday, Tio’s 21-member staff was perplexed that he would call a meeting. He seemed unusually serious when he and his wife, Janell, arrived outside the stables, where he had asked everyone to gather. He thanked them for coming, then he pulled a sheet of paper from his pocket and said he had a short statement to read. “For the past twenty-eight years, I have been very fortunate to fulfill a childhood passion to contribute to the lives of people who are dedicated to King Ranch.” He paused, his eyes fixed on the paper. “Effective June 1, 1998, I have been asked by the King Ranch Board to resign…Janell and I love each one of you and are truly grateful for the time we have spent with you and your families.”
A couple hundred miles away, at the King Ranch corporate offices on the twenty-third floor of a downtown Houston skyscraper, a press release was being issued that said Tio and Janell “have decided it is in the best interest of King Ranch to leave day-to-day operations.” The press release reported that Tio would continue to serve the ranch as a new member of the board of directors.
But around the ranch headquarters and in Kingsville, the real story was spreading like a prairie fire. An elderly plumber happened to be on the ranch that morning, driving by the stables just as Tio finished reading his statement. He raced back to town and reported that he had seen secretaries weeping and grown men hugging Tio and Janell. “Our Tio, he’s been fired,” the plumber cried. Soon, phones were ringing around the state: The last of the legendary Kleberg patrones had been ousted by the chief executive officer of King Ranch, Inc., Jack Hunt, an astute business executive who had been brought in three years earlier from California to oversee the entire multimillion-dollar King Ranch operation and its varied business ventures, from a citrus grove in Florida to platform oil and gas wells in the Gulf of Mexico. Hunt, who spent most of his time in Houston and was rarely seen around the ranch itself, had convinced the board of directors, two of whom were Tio’s cousins, that it was time for Tio to go.
How, on a ranch where the bonds of family meant so much, could its most loyal son be deposed? In one regard, what happened to Tio Kleberg was nothing more than pure corporate politics, a clash between two executives. “It’s the kind of thing that regularly takes place in other companies,” one King Ranch board member told me. But at another level, the drama that played out at the King Ranch was a poignant parable about what Texas used to be and what it is inevitably becoming. If there is a reason that the King Ranch has remained such a mythic Texas symbol, it is the family that created it—a once larger-than-life clan that loved and fought and persevered with a relentless passion. Richard King and his heirs rooted out a place for themselves, bent it to their will, and then triumphed beyond their wildest dreams, building an empire like nothing the world had ever seen.
But today the King Ranch, like so much of Texas, is well on its way to creating a new identity for itself, one in which the rugged individuals are not those who move cattle but those who move money. Long ago the members of the King Ranch family made a heroic vow to keep their mesquite-filled kingdom together; now they’re locked in a struggle to redefine that vow and determine their future. It is a struggle that has changed them, divided them, and perhaps even separated them from the very ideals that once made the King Ranch so great.
Few places are more difficult to raise cattle in than the area of South Texas once known as El Desierto de los Muertos—the Desert of the Dead. Much of the ranchland is made up of great tangles of brush, creating the perfect hiding places for livestock during roundup time. The rainfall is viciously unpredictable, the droughts are frequent, and the grass is so sparse that a South Texas rancher needs about twenty acres to feed one cow. “Some days you’re amazed that man or beast can survive down here,” Tio Kleberg told me one scorching June afternoon at his home, just a few hundred yards from the Big House. He smiled, waving his ever-present unlit cigar in the air. “But it has never occurred to me, not once, that I should be anywhere else but right here on this ranch.”
To true cattlemen, the King Ranch is a lost Eden, the place where so many elements of the American cattle industry were invented, from cattle prods and dipping vats to entirely new bovine breeds. Today King Ranch cow bosses are called “unit managers,” and the forty cowboys, who make between $20,000 and $35,000 a year, stay in touch with one another on the vast pastures with cell phones. One day they might be carrying laptop computers in their saddlebags to keep track of the cattle inventory. There are no more cow camps (everyone drives back to his home in a pickup at the end of the day), no more chuck wagons (the cowboys bring their own sack lunches to work), and no more wood-burning fires to heat the famed Running W branding irons (the cowboys now plug their branding irons into electrical outlets). Yet during the twice-yearly roundups, time seems to stand still. Life on the range becomes the same ancient contest, man against cow, that requires the same ancient equipment—chaps, spurs, ropes—and depends on tenacious cowboys probing the thickets for cattle and skillfully steering them toward the pens.
When Captain Richard King, a hell-raising, fistfighting, Rio Grande steamboat pilot from New York City, paid $300 for 15,500 South Texas acres, he knew nothing about cattle. People laughed when he announced that he wanted to own all the land between the Nueces River and the Rio Grande and then control a three-mile-wide strip from Brownsville to Kansas, on which his cattle would be driven to market. But King had a plan: He would get Mexican vaqueros, skilled horsemen who knew exactly what to do with the cattle he was buying for as little as $5 a head, and integrate their methods into a hard-nosed American business operation. He traveled to an impoverished hamlet in Mexico where many vaqueros were known to live. He offered them jobs for life, with homes, education, and basic food provided free—if they and their families would move to his ranch headquarters. The entire village relocated, and these first Kineños helped King get his ranch started. By the 1870’s, King’s outfit, R. King and Company, was sending tens of thousands of cattle north on the trails.
Although Richard King never accumulated all the land he wanted, he owned more than 600,000 acres at his death, which he left to his wife, Henrietta. She was like a character out of Victorian fiction, a thin and severe Presbyterian who for the next forty years would wear widow’s black and tour the ranch twice a year in a black, horse-drawn coach. Soon after Richard’s death, Henrietta asked Robert Kleberg, the husband of her youngest daughter, Alice (the Kings had four children), to run the ranch, a herculean task considering that it was about $500,000 in debt. Kleberg was a Corpus Christi lawyer with little ranching experience, yet he quickly transformed himself into a daring and creative cattleman, introducing scientific methods to the cattle business, digging artesian wells to counter the devastating drought of the early 1890’s (known as the Great Die), and experimenting with various breeds, from English Shorthorns to Herefords, to see which could best survive the unforgiving climate. He continued to buy more cheap land—the family’s guiding philosophy was “Buy land and never sell”—and he persuaded the railroad to build its tracks through the ranch and make a stop there, where he established the town of Kingsville. There was a Kleberg-owned bank and a Kleberg-owned newspaper, and the streets were named after family members. It was, in retrospect, a startling achievement: Civilization had been brought to El Desierto de los Muertos.
In the last years of his life, Kleberg suffered a debilitating stroke that seemed to lock up his mind. Yet the land continued to hold a fierce grip on him. Every afternoon he would shuffle to his car and have a driver take him from one pasture to another. He and Alice had five children, three daughters and two sons. Because the eldest son, Richard, was already in law school when his father became ill, the reins of the ranch were handed in 1918 to the second son, Robert “Bob” Kleberg, Jr., a serious young man with a squeaky voice and an ungraceful demeanor.
It was hard to imagine that this particular Kleberg would become the greatest American cattle baron of the twentieth century. Soon after the 1925 death of Bob’s grandmother, Henrietta King, the barely profitable ranch was saddled with a $3 million inheritance tax. To eliminate at least part of the tax, Bob could simply have sold off some of the land. But he and his four siblings, who had created a corporation to control their spread, splitting the stock equally, had made a quixotic vow: The King Ranch would stay together and remain under family ownership no matter what happened. In fact, like his father and grandfather before him, what Bob wanted was more land.
Bob saved the ranch from foreclosure by negotiating a lease with Humble Oil (which later became Exxon) to begin oil and gas exploration on the property. As part of the deal, Humble gave him a $3.5 million loan, which took care of the tax. And he began accumulating more land—buying nearby properties and trading until the ranch eventually totalled 825,000 acres, divided in four parts. Then Bob Kleberg did something that had not been done anywhere in the world in the previous two hundred years: He created a new breed of cattle. He needed a cow that was as hardy as a Longhorn, able to endure the sun, yet capable of eating just about anything. In the 1930’s, after years of meticulously crossbreeding Brahmans and Shorthorns, he introduced the dark-red Santa Gertrudis. He also began breeding the best quarter horse stallion he had at his stables with fifty English Thoroughbred racing mares until he created what he called the perfect cow pony, which seemed to know instinctively how to cull a cow from the herd. He invented the cattle prod to move the cattle along faster when they were in their pens. To open up more pasture, he invented a plow pulled by a massive, specially designed bulldozer that could clear four acres of brush an hour.
By any calculation, Bob Kleberg’s achievements were colossal. Under his management, the King Ranch became the greatest beef-producing operation in the United States. He became a national celebrity, his exploits featured on the cover of Time. Edna Ferber used Bob and his wife, Helen, the daughter of a Kansas congressman whom Bob had married after a seventeen-day courtship, as models for her novel Giant. Always hungry for more land, Mr. Bob, as he became known among the Kineños, used the King Ranch’s share of the oil royalties to buy huge amounts of land in Australia, Cuba, Europe, and South America, creating a worldwide cattle kingdom. Just to prove he was better than the elitist Kentucky horse breeders, he bought several Thoroughbreds, brought them back to the King Ranch in railroad cars, and started a breeding program that produced a horse named Assault that astounded the world of racing by winning the 1946 Triple Crown.
Bob was spending more and more time away from Texas, so the task of running the home ranches fell to his nephew, Dick Kleberg, the son of Bob’s older brother, Richard. Dick had a bright future as a lawyer—he had done well in his first year at the University of Texas School of Law—but he wanted to return home and serve his family. Denman, the former attorney for the ranch, remembers Dick telling Bob, “If I can be of any use to you, I want to work.” He was a deft roper and a fine horseman, one of the best all-around cowboys on the ranch. And he was a quiet, modest man who never questioned his role as the supporting player to his uncle Bob. The times he spoke at family meetings, he would say that it was up to the family to preserve the ranch’s heritage. It was a message he also passed on to his four children—one of whom was a good-natured boy named Tio, who used to sneak into the Big House to shoot his BB gun at birds that had flown in through the open windows.
As a teenager in the sixties, Tio worked weekends in the cow camps for 50 cents a day. He attended Texas Tech University, married his college sweetheart, an art history major named Janell Gerald, and briefly flirted with the idea of making the Army his career. He became a first lieutenant, stationed in El Paso, and was offered a chance to move up in rank. But in 1971 he returned to the ranch to work as a cowboy and ranch hand.
He arrived just before the start of a new era. Bob Kleberg died in 1974, and Tio’s father, Dick, was too sick with emphysema to take his place. Dick’s cousins B. K. Johnson and Bobby Shelton, half brothers who had worked closely under Bob and Dick, both made a separate presentation at a family board meeting, asking to take over the ranch. They were refused. Times were changing, and the board declared that the ranch no longer needed a domineering Bob Kleberg—like leader. A board member went so far as to tell Johnson, “One dictator in this family is enough.” The brothers announced they were walking away from the ranch forever.
Through the late seventies and into the eighties, the ranch was run by a committee of senior family members led by Jim Clement, an East Coast–trained businessman who had married the daughter of one of Bob Kleberg’s sisters. Young Tio was given the responsibilities for the cattle operations, in large part because no one else in the family was willing to take them on. Despite the ranch’s past glories, its profitability was in the oil and gas underneath the land that had been bringing in at least $20 million annually since the late sixties. After Bob’s death, the sixty or so family stockholders decided they should get a larger share of that money—much larger. They voted to take 75 percent of the royalties, leaving the ranch corporation with the remaining 25 percent. Bob’s Thoroughbred racehorses and his overseas ranches, which were barely profitable, were put on the auction block, with the majority of the eventual proceeds going to the stockholders.
Suddenly, the King Ranch family was full of millionaires, and many of them—those from Tio’s generation—were far different from the five Klebergs who made the pact to keep the ranch together. The new clan began to find a world of opportunity beyond the King Ranch gates. Many, including Tio’s two brothers, moved to the more exclusive neighborhoods of Texas cities and made their living as investors or venture capitalists. One heir became a professor of English at the University of Texas at Austin. Another owned a contemporary art gallery in San Antonio. Another became a champion equestrian rider in Florida. Because of the luck of inheritance, the ranch’s largest individual stock holder, with between 5 and 10 percent of the stock, was Richard Sugden, a doctor in Jackson Hole, Wyoming. Sugden’s mother was Mary Etta Kleberg, the daughter of one of the original five Kleberg children. Mary Etta had spent much of her childhood on the ranch, married a Naval officer, and given birth to Richard, her only child, who was raised mostly in California, Wyoming, and overseas. When she died, he received all of her stock. “Imagine what Captain King’s reaction would be if he knew that a doctor at a Wyoming ski resort owned more of King Ranch than anyone else,” marvels one family member.
Many members of the older generation were worried what the infusion of money would do to the family. John Armstrong, an esteemed family member who became president of the ranch after Jim Clement retired, said in a 1980 interview, “If the next generation is content to live off their income, then we’ve lost it.” Although a handful of new heirs used their dividends to buy smaller ranches for themselves, the vast majority never visited the King Ranch except for hunting trips in the winter and for the family’s “Summer Camp” reunion and annual business meeting, where, according to one family member, “everybody got to play cowboy for a week before returning to their real lives.” In their group photograph taken at Summer Camp, they seemed to embody the best of the American aristocracy, with pointed noses and high cheekbones and graceful smiles. The only one who looked a little out of place in those photos, with his great curlicue mustache resembling the Running W brand, was Tio Kleberg.
By the late eighties Tio was the only member of his generation willing to stay on the ranch. (Another fifth-generation family member, Martin Clement, who lived in Kingsville, supervised the Big House, which was used as a lodge for visiting family members and special guests.) Tio, who was fluent in Spanish, had received his nickname as a teenager from the Kineños, who thought he had the same drive as his great-uncle Bob (tio is “uncle” in Spanish). Like Bob Kleberg, Tio was always looking for ways to help the ranch prosper in difficult times. He knew that the ranch had to find something to replace the oil royalties that for so long had bolstered the King Ranch cattle operations, especially during droughts. (A single summer drought could cost the ranch up to $3 million.) At family meetings Tio said that the ranch should become more of what he called a “resource-management business” as opposed to strictly a cattle business. He suggested that cotton and milo farming be increased at the ranch and that more than half of its land be leased to commercial hunting opertions. (Because of the ranch’s reputation as a paradise for trophy wildlife—it is home to white-tailed deer, Nilgai antelope, quail, and feral hogs—corporations such as Dresser Industries and Triton Energy were willing to spend $8 an acre for a lease, sharing the scrubland with the cattle.) To the surprise of many of the older, more conservative family members, Tio said that Uncle Bob’s prized Santa Gertrudis could be made better. Taking a huge gamble, Tio hired breeding experts and budgeted about $4 million for fertility studies, DNA mapping, and breeding programs. He and the managers introduced a new composite breed called the Santa Cruz, which some experts said was leaner and more fertile than the Santa Gertrudis and which Tio himself claimed would one day become the dominant breed on the ranch.
In other respects, however, Tio was unabashedly old-fashioned. In his direct, ranch-raised speaking style, he liked to talk about “doin’ things the King Ranch way—doin’ it right, doin’ it with quality.” He made a point of riding horseback through every pasture. He did not miss a roundup. According to those who worked with him, Tio followed the old family creed that a cattleman never left a herd until all the cattle work was finished. “He didn’t just go out there, watch for a while, and then get in a car and drive away,” says one former King Ranch board member.
“He was just like his father—a servant to that land,” adds Bruce Cheeseman, the archivist and historian at King Ranch from 1988 until 1997. “He believed a family leader should be there to answer the phone in the middle of the night if there was a problem. He believed the family had an obligation to take care of the Kineños. And he believed the family had a responsibility to Kingsville.” Tio always made sure to allocate about $150,000 of his department’s annual budget for Kingsville civic projects, from Fourth of July parades to livestock shows, and he helped develop a plan to revitalize the downtown. He sat on the board of the local university and the local hospital; Janell was a longtime member of the local school board. When the family’s board of directors decided in the mid-eighties that the ranch could no longer support so many Kineños—an estimated seven hundred of them worked on the ranch—Tio was ordered to make the cutbacks. He had to look into the eyes of the descendants of the original Mexican villagers who had followed Captain King into Texas and tell them there were few jobs left for them and fewer for their children. Most of the Kineños were phased out through an early retirement program. Tio had the homes of the oldest Kineños—homes they had lived in since birth—moved off the ranch, relocated in Kingsville, and given to them as a reward for their service.
Tio was not a saint. He would lose his temper at meetings when he thought the family committee was losing its focus, and his straightforward manner occasionally offended relatives. One morning a prominent shareholder came into the kitchen at the Big House and said, “Room number two is too bright in the morning, and the peacocks wandering the grounds are making too much noise.” Tio grinned and said, “This is a ranch, not your home. You’re supposed to get your ass out of bed.” Other shareholders didn’t agree with Tio’s ranching methods. Some thought he had blundered badly during a drought in the late eighties when he decided to lease pastures in North Texas and move much of the ranch’s breeding herd there. Tio had gambled that he would be able to wait out the drought up north and avoid selling the herd at a loss. But the drought lasted three years, costing the King Ranch several million dollars in unrecoverable feed costs and pasture leases. There were other family members who believed that Tio had wasted King Ranch money on the introduction of the Santa Cruz; privately they said he was trying to draw attention to himself. Others thought he wasn’t controlling the hunting program adequately, and a few believed that he should have developed a better quarter horse breeding program.
“It doesn’t matter where we are living,” says Richard Sugden. “We have our opinions on what can make King Ranch better. We are an honest family and we ask a lot of pointed questions and we don’t hesitate to express our thoughts. I guess it’s in our blood.” Tio didn’t win any friends in the family when he said once to a family group that no one cared to come to the ranch to learn how the cattle operation worked. Tio says that during his tenure, only one family member ever came, and he was someone who was looking for tips on how to run his own ranch. “But let’s face it,” Tio adds with a shrug. “In this job you’re always going to do something that will piss off someone in the family. There are still members of this family that hate the idea that we farm on this ranch, and there are some who’d like for the ranch to be one big pristine national wildlife preserve, barely touched by human hands.”
Regardless of family disputes, says Bruce Cheeseman, “I always assumed that the family felt a sense of gratitude to Tio and Janell for being part of the community and for staying there during the entire godforsaken summer while everyone else got to live elsewhere and take vacations and cash their dividend checks. Who could have guessed the day would come when the family would not support the very person who had been so loyal to them?”
But by the nineties, the values that were once so important to the King Ranch family no longer translated to the bottom line. To keep the profits rolling in, King Ranch, Inc., was turning into a highly competitive multinational agribusiness and energy corporation. And in such a corporation, where success is gauged on the financial returns of its investments, a family’s heritage only goes so far.
What changed the King Ranch as much as anything—and what ultimately led to Tio’s downfall—was the family members’ growing preoccupation with their stock dividends, coupled with the entirely legitimate fear that oil and gas production on the ranch would start declining as early as the year 2000. The family also knew that the number of King Ranch heirs was rapidly multiplying: More than two hundred family members were projected to be holding stock by the year 2021. “That’s a lot of baby heifers for one mother cow to nurse,” says Helen Groves, one of the family matriarchs. If the dividends were going to remain high in the future, the King Ranch had no choice but to reposition itself and diversify its businesses.
But with the older members of the family retiring and dying, who would guide the company into the next century? In the late eighties a momentous family vote was taken to look for chief executives and board members outside the family, specialists in “value-added processing” and “least-cost production” and “vertical integration.” If Captain King would have been surprised to learn that Richard Sugden was his largest stockholder, imagine what he might have said upon hearing that the new chairman of the board of directors was a man named Abraham Zaleznik, a psychoanalyst and professor emeritus at Harvard Business School who could barely stay on a horse but who was a nationally renowned corporate consultant. (One of his papers in the journal Psychiatry is titled, “The Case for Not Interpreting Unconscious Mental Life in Consulting to Organizations.”) The first outside chief executive and president of the King Ranch was Darwin E. Smith, the head of Kimberly-Clark, the Dallas tissue paper and baby-products corporation.
Under Smith and his successor, Roger Jarvis, a respected oil executive, the King Ranch added a citrus grove and a sod farm in Florida (both were supervised by Tio), an alfalfa hay farm in Arizona, and a cluster of offshore oil and gas wells in the Gulf of Mexico. According to company insiders, the King Ranch’s revenues started rising, jumping from around $100 million in the late eighties to $148 million in 1993 and $183 million in 1994. Although the 50,000 tourists to the King Ranch visitors center were still inundated with exhibits on the ranch’s great cattle history, the truth was that the cattle division had long ago become one of the smaller profit centers at King Ranch, Inc. In a year with sufficient rainfall, the cattle division added from $1 million to $3 million to the company’s annual pre-tax profits. The company made about $3 million annually in pre-tax profits leasing 500,000 acres of the home ranches for hunting. The cotton and milo farms, which had been expanded to 60,000 acres, brought in at least half a million dollars more than the cattle. And the King Ranch’s oil company, King Ranch Energy, was accumulating a healthy $12 million annually. But what really made money for the company was its Florida sod farm, which in a good year brought in a whopping $16 million. One insider remarked that the patron saint of King Ranch was no longer the Santa Gertrudis or the Santa Cruz, but Saint Augustine.
Because some of the more influential family members believed that the King Ranch could use even better leadership, Smith and then Jarvis resigned under pressure, Smith after one year and Jarvis after five. A family committee was formed to hire the best chief executive in the country, someone who knew the intricacies of a commodities-oriented business like King Ranch, Inc. In 1995 the committee found Jack Hunt, the head of the publicly held Tejon Ranch Company in California, a 270,000-acre operation that involved commercial real estate, farming, recreation, mineral extraction, and ranching (14,000 head of cattle). Hunt had spent some of his youth in Texas and had worked as an executive for a large family-owned ranching company in the Panhandle. But what impressed many family members was that he had also been trained at Harvard Business School, focusing on agribusiness. It seemed he was more influenced by modern-day business investors and tycoons than he was by cattlemen or oilmen. In a magazine interview, he once said the executives he would most like to have at a fantasy dinner were famed investor Warren E. Buffett, Ted Turner, and Robert Shapiro of Monsanto.
Hunt told me that when he arrived at the King Ranch offices in Houston, “I did what any executive would do, which was to find out what was generating good returns and what was generating poor returns.” And one of the first areas he looked at was the ranch’s beef business. “At all ranches, the beef prices keep going down, and the costs of producing the beef keep going up, which means we have to think and act in a more efficient way.”
Employees at the ranch headquarters sensed almost immediately that there was going to be a personality clash between the buttoned-down Hunt and the cigar-wielding Tio. Hunt wasn’t a backslapper, and he didn’t feel the need to get to know everyone at the ranch by name. Rumors about him flew. Some cowboys said he didn’t have a firm handshake and he didn’t look a person in the eye. One employee openly worried about major job cutbacks after allegedly overhearing Hunt say he had learned to run the ranching division at Tejon with just a couple of cowboys and some dogs. There was one story going around that Hunt was so determined to make changes that he had flown in a chef from California to teach the longtime cooks at the Big House a different way of cutting beef.
In person the 53-year-old Hunt is a pleasant if reserved man, with a soft face and blue eyes. Helen Groves, who was on the search committee, describes him as “very un-pushy and respectful.” But he is tenacious when it comes to evaluating the nuts and bolts of a business. Tio was startled, for instance, when Hunt asked him for the odometer readings of the cowboys’ pickups to see if they were driving too much. When Hunt suggested that the ranch didn’t need to buy trucks with air conditioning or power locks on the doors, Tio bristled, telling him, “These trucks are the cowboys’ offices!” According to one source at the ranch, after Hunt asked Tio why there wasn’t a higher percentage of weaned cattle on the ranch, an exasperated Tio went to his cattle managers and told them that Hunt just didn’t understand South Texas. He later explained to me, “Jack doesn’t realize that you aren’t going to get higher weaning percentages in this kind of environment where the moisture is low, unless you spend so much money on extra feed that you stop making a profit.”
The previous two chief executives had, for the most part, left Tio alone. It was good politics to avoid butting heads with the last Kleberg on the ranch. Besides, Tio was willing to take on any responsibility for the company. He not only supervised the entire agricultural side of the business but also watched over the King Ranch–owned hardware store and the King Ranch Saddle Shop in Kingsville when no one else could do it.
But Hunt did not hesitate to challenge Tio’s judgment. Perhaps what made Tio angriest was Hunt’s questioning the capability of some of Tio’s ranch managers. Tio had trained many of these men; they had been part of his team for more than twenty years. A few had turned into superstars in the business, regularly profiled in such magazines as The Cattleman. Yet, according to Tio, Hunt told him that at an industry meeting he had heard that the King Ranch’s manager in charge of breeding sales, Scott Wright, was not well respected by other cattlemen. Tio snapped, “Just who the hell is spreading nasty shit about Scott? Tell me right now, Jack. Who the hell thinks Scott’s not doing a good job?” Around the ranch, Wright was almost as beloved as Tio. He gave personal loans to the Kineños, took their kids to the doctor, and worked every day of the week. A few weeks later, Wright died suddenly of a heart attack. Tio told me that he was so distraught at the hospital that he picked up the phone, called Hunt in Houston, and shouted, “Jack, Scott Wright’s dead, and I hope you’re happy.” Then he slammed down the phone.
Hunt diplomatically told me that he had no confrontations with Tio. He specifically denied that Tio called him after Scott Wright’s death. “Tio and I worked well together,” he said. “I have a very high regard for him. We had different ideas on certain aspects of the cattle operation, but he adopted some of my ideas and I agreed with some of his.”
In reality, the two men were on a collision course. When Hunt told his board of directors at a meeting in Houston that he wanted to pay a consulting firm $500,000 to do a study assessing the King Ranch’s environmental problems, Tio glared at him and exclaimed that such a huge sum didn’t need to be spent. Tio said he knew the ranch from top to bottom, and he could show anyone the places where there might be problems, such as a garbage dump or an underground storage tank. There was a long, embarrassed silence around the table. The next day, Hunt flew to Kingsville on the company’s jet and demanded to know why Tio had confronted him in such a manner in front of the board.
Around the ranch, Tio did not hide his opinion that Hunt was not leading the company. “He just wasn’t the kind of leader you would want to follow into battle,” Tio says now. “He never presented any vision of what he wanted King Ranch to become. He never once said to me, ‘Tio, this is where I want to go with the cattle and farming operations.’ All he had to do was tell me what he wanted, and I’d do it. But he kept me and the ranch managers in the dark like a bunch of mushrooms. He didn’t even once ask me to drive him around the ranch just to see what was here.”
At least initially, Hunt did act more like an asset manager than a visionary. He focused on getting rid of the businesses that were faltering, such as the company’s cotton warehouse in Galveston, a lumberyard in Kingsville, and a horse farm in Kentucky. The company’s only significant purchase was a 5 percent interest in a small bio-tech firm in California that makes environmentally friendly pesticides. Hunt would not publicly say how he planned to put his own stamp on the King Ranch. According to some sources, however, he told shareholders that he wanted the King Ranch’s energy company to launch a major exploration program, which could cost $250 million a year over the next four years, to acquire 200 billion cubic feet of oil and gas by the year 2000 (the company owns 46 billion cubic feet today). Members of Hunt’s staff also had talks with Louis Vuitton and Estée Lauder about nationally distributing a line of King Ranch luggage and King Ranch colognes to be sold in department stores. King Ranch cologne? Although it is hard to imagine an increasingly faceless corporation arousing much interest outside Texas with such a product (the idea might have worked fifty years ago, when Assault was winning the Triple Crown and people were talking about the King Ranch), the idea demonstrated how far Hunt was willing to go to increase revenues.
And no one could criticize his efficiency. Company insiders say the pre-tax profits of King Ranch, Inc., in 1997 were more than $32 million. The company had a whopping $200 million either in the bank or invested in securities, and it had almost no debt. What’s more, because of 3D seismic technology, deeper oil wells were being successfully drilled on King Ranch land, making the royalties higher than ever. The now eighty or so family stockholders split an estimated $27 million in oil royalties in 1997 plus another $9 million in dividends from the King Ranch corporation itself. For the first time in years, it was hard to find anyone in the family complaining.
Nevertheless, Hunt still had one big problem: Tio Kleberg, the last irascible remnant of the old King Ranch. Hunt could hardly fire him for poor work performance. By Tio’s own accounting, the agricultural department that he supervised had for the previous three years brought in $15 million to $18 million annually in after-tax profits—the best three years on record. But Hunt told the board of directors that Tio’s job should be done by two men—one to run the King Ranch’s farming operations across the nation and someone else to run the cattle business. Hunt already knew the man he wanted to head the cattle business: an intellectual much like himself named Paul Genho, the respected manager of a major Florida cattle operation who held a Ph.D. in animal science.
To get rid of Tio, Hunt knew he needed unanimous support from his eight-member board. Although six of the board members came from outside the family, two were younger cousins of Tio’s—John D. Alexander, Jr., of San Antonio and James H. “Jamey” Clement, Jr., of Dallas, both private investors in their early forties. Clement had grown up with Tio on the ranch during the sixties, when Clement’s father was helping run the ranch’s corporate affairs. Alexander was the sole grandson of Bob Kleberg, Jr., the man who perhaps more than anyone had insisted on home rule. (Around campfires at the ranch in the summers, Kleberg would tell his grandchildren, “Do what you can with the ranch, but above all, keep the family together.”) Yet neither Clement nor Alexander—sophisticated young businessmen, adept at corporate affairs—was particularly interested in cattle ranching. Alexander preferred playing polo. When I asked the two of them if they someday might want to run King Ranch, Inc., there was a long pause, and they glanced at each other and grinned. “Everyone is always interested in a position like that,” Alexander finally said. “Whether that is the right thing for the company or for the shareholders is another issue.”
What Alexander and Clement did believe was the right thing for the shareholders was for them to support Hunt over Tio. Tio said that he had no inkling he was going to be fired when he was asked to come to Houston to meet Hunt and Zaleznik. He said they gave him no reason for his firing except that a change was needed. He also said that they repeatedly told him how excited they were about having him bring his skills to the board of directors.
Tio returned to the ranch and broke the news to his wife and three children, the eldest of whom, 27-year-old Chris, had been working as a cowboy at the ranch and was scheduled to depart that summer to work as a manager at the King Ranch’s cattle ranch in Brazil, the company’s last remaining international property. In the stoic Kleberg manner, Chris kept his emotions to himself, but many of Tio’s employees and the Kineños were beside themselves. At a good-bye party for Tio, one old man wept and said, “Who will take care of us now? These new people do not know us.” A group of friends published a letter to the editor in the Kingsville newspaper that read, “In its long and fabled history, King Ranch has had no greater servants or friends than Stephen (Tio) and Janell Kleberg. Their twenty-eight years of devotion to King Ranch, its land and its people, are beyond reproach.”
Meanwhile, life at the ranch had to go on. One morning the cowboys looked up and saw Tio riding toward them on his horse. Since 1971 he had been at every roundup, threading his horse in out and of the milling cattle, his experienced eye looking for those cows that should be kept for breeding and those that should be shipped off for sale. This was his last King Ranch roundup. In the saddle he received a call on his cell phone from a friend halfway across the country who had just heard the bad news. The friend kept hearing the sound of cattle wailing in the background.
“Tio, where are you?” he asked.
“I’m in the middle of the Alazon pasture on a good quarter horse,” Tio replied, “doing what I love to do.”
In a Texas Monthly story about the King Ranch almost twenty years ago (“The Last Empire,” October 1980), writer William Broyles described Tio Kleberg, who was then just 34, as the family’s rising young star, determined to be as worthy as the Klebergs who had come before him. The article hinted at the challenges to come, but Tio and others in the family seemed full of hope that the family tradition would endure. As Janell said then, “Keeping the family and the ranch together is more important than any of us.”
She turned out to be eerily prescient. The new leaders of the King Ranch decided to keep the family together by turning their backs on Tio, one of the few remaining heirs who still believed there was more to the ranch than its wealth. Other heirs, however, could persuasively argue that by embracing Jack Hunt, who might turn the King Ranch into an even bigger corporate Goliath, the family is doing exactly what the family has done in the past: whatever it takes to keep the ranch from going broke. “There’s a lot of tradition in this family about persevering in the face of negative odds,” says John Alexander. “That’s what I really look to when I think about King Ranch, not just one individual here or there.”
But can this family stay together as a family without its connection to the land—a land that once defined them, sometimes overwhelmed them, but ultimately enlarged them? Will their understanding of their own heritage be blurred by their increasing demands for dividends? Some day, the oil and gas royalties will run out, and the future heirs, who no doubt will have even less contact with the ranch than today’s heirs, might wonder why they are burdened with so much property that is not generating any income. “It’s possible you’ll see the next generations sell off hundreds of thousands of acres of the old family property so they can bring some better dividends for that year,” Tio says. “I know it happens in other families all the time. I just never thought it would happen to this one.”
As for Tio and Janell, they received the right in their severance package to keep leasing their home on the ranch for another seven years. But they are not sure how long they will stay. Nor is there any guarantee that Tio will last on the board past his one-year term. Hunt and other board members could always ask him not to stand for reelection, or Tio might quit. Hunt has told me that he would like for Tio to remain a public presence at the ranch: It is difficult for anyone, including Hunt, to imagine the King Ranch without Tio in his starched blue jeans, denim shirts with the Running W embroidered on the pockets, straw cowboy hat, great mustache, and unlit cigar.
The new group of leaders insists that the King Ranch legacy will not die—and perhaps it won’t. But so far, they have not gotten off to an auspicious start capturing the spirit of the place. At the annual family meeting at Summer Camp in mid-June, the board of directors decided to honor Tio and Janell. Zaleznik asked the couple to come to the front of the room, and as they did the entire family stood and applauded. They kept clapping, perhaps because they were not sure what else to do at such an awkward moment. Or perhaps because they didn’t want to admit that something had gone out of their world for good.
Finally, Zaleznik stepped to the microphone and presented Tio and Janell with a painting. It showed them on horses, riding off late in the day toward a distant pasture. Tio was in a denim jacket and Janell in a windbreaker. The grass around them was green—too green, actually, for the King Ranch. Those who came up later and gave the painting a second look said nothing out loud, but it was clear that the landscape could not possibly have been South Texas. Tio and Janell were riding on horseback in a pasture that looked like someplace in California, where it turned out that the artist lived.
Outside, it was another hot afternoon, so hot that the heat was bouncing off the scrub brush. As predicted, another drought was coming. In the past Tio would have been anxious to slip out of the meeting and get together with his cattlemen and talk about what to do next. But now all he could do was stand with his painting, smiling graciously with his wife, listening to the applause go on and on.