published Monday, January 17th, 2011

The Rise of Bill Haslam: Jim Haslam guides family, fuel business to maturity

By Josh Flory/The Knoxville News Sentinel

Second in a series

On Oct. 9, 1958, Jim and Cynthia Haslam signed the paperwork to create Pilot Oil Corp., launching a company that would become a fuel-industry juggernaut and vault the family to statewide prominence.

That success was years in the future, though — and only one of them would live to see its full fruition.

When it came to his family’s business, Jim Haslam didn’t envision a coast-to-coast giant.

“My ambition was to have enough money to pay for the load of gasoline we’d gotten that day, (in) 10 days when (the payment) was due,” he recalled.

In Pilot’s infancy, the nation’s transportation infrastructure was a far cry from the system of superhighways that crisscrosses the country today. President Dwight D. Eisenhower had signed legislation creating the modern interstate system only two years earlier, and construction of the first interstate, in St. Charles County, Mo., began in August 1956.

When he founded his company, Jim Haslam was fresh off a stint running Sam Claiborne’s Sail Oil Corp. and had agreed to a noncompete arrangement that barred him from the East Tennessee market for three years. As a result, he focused on Virginia and Kentucky, looking for locations that would be profitable for his small gas stations, which also sold motor oil, soft drinks, cigarettes and snacks.

While Pilot was in the fuel business, a key part of the financial equation was real estate. Many of the company’s locations were in smaller towns, and the ideal site was on the right-hand side of the road as motorists drove home from work. It was an easy task in theory, but ferreting out those sites — and negotiating the right price for them — took a lot of work.

Marathon man

Jimmy Smith, a longtime Tennessee banker and friend of the Haslam family who served on the Pilot board, recalled that in the early 1960s he had a meeting scheduled in Louisville and hitched a ride to Kentucky with Haslam.

As Smith remembered it, the two drove to Corbin and Danville, then up to Lexington and over to Louisville. In the latter city, he said, Haslam rode around to look at traffic patterns, trying to identify gas station sites, then checked into a motel, ate supper and got back into the car to study traffic patterns some more.

The next morning, Smith said, Haslam was out before 7 for more traffic-scouting, before eating a quick breakfast and dropping off his friend at the meeting — and then repeating the pattern.

“He had a tremendous amount of energy,” Smith said. “That was one of the reasons he’s so successful.”

By 1965, Pilot had grown to a dozen gas stations, but it owed a lot of money. According to Haslam, Marathon Oil Co. had just bought a terminal in Knoxville and approached him about buying half of Pilot. He didn’t want to do it, but the petroleum giant threw in a sweetener: a $4 million loan. Pilot would be able to finance dozens of stations, so the company agreed to sell a 50 percent stake to Marathon for $200,000.

Bob Campbell, Knoxville attorney and Haslam’s former fraternity brother, recalled the deal provided financial capital as well as access to a reliable source of product — gasoline and other fuel.

Campbell helped execute the deal, and he said the 50-50 split was key for Haslam.

“Because he didn’t want to be in a business relationship where he had to put his foot on the neck of his partner, or where the partner had the capability of putting their foot on his neck,” Campbell said. “He wanted a true partnership where you sat down and agreed [on] things.”

Life also was moving quickly on other fronts. After the birth of Jimmy Haslam in 1954, Jim and Cynthia had a daughter, Ann, born in 1956 and who later married Steve Bailey, and another son, Bill, born in 1958.

A death in the family

Whether it was playing basketball at a friend’s house or baseball at their own, the family’s leisure time often revolved around sports.

Among the siblings, Jimmy Haslam was the ringleader. Ann Bailey recalled that Jimmy would drive the three of them to the dentist, but when Ann and Bill would go in for a cleaning, he would stay in the car and skip his appointment.

“We’d get in the car (later) and he’d say, ‘If you all tell Mother, I’ll kill you.’ And we’d all go, ‘OK, we won’t!’” she laughed.

In late 1973 or early 1974, the family moved to a home on Lyons Bend Road, and by then they had taken a leadership role in Knoxville’s civic life. Cynthia had served as president of the Knoxville Junior League and was a member of the Garden Club, while Jim Haslam was a past president of the Chamber of Commerce and chairman of the Public Building Authority.

But on Dec. 5, 1974, tragedy struck.

That afternoon, Ann came home from UT and found her mother lying in bed, dead at age 42. Jim was out of town on business.

No autopsy was done, but the family believes Cynthia Haslam died from a heart condition. Her father had died while still in his 30s, and in the late 1990s Ann was diagnosed with a dissected aorta.

The death upended the family. At the age of 20, Jimmy took his mother’s seat on the board of Pilot — a role that required him to attend board meetings with senior executives of Marathon — while Ann moved back home to take over many of the domestic tasks that her mother previously had managed.

Jimmy Haslam later recalled his mother’s death as “a tough, tough deal,” saying it was hard on the children and “really hard on my dad, because he’s such a great family guy.”

“He was just miserable. … He doesn’t smoke, he doesn’t drink, he doesn’t go to bars, he doesn’t play golf,” Jimmy Haslam said. “So he ended up hanging out with us most of the time, which was OK, but you know it’s tough.”

Ann Bailey said the family learned to depend on one another and that the three children probably grew a lot from the experience.

“I’d say Dad and I are probably a lot closer because of that happening,” she said. “Because he needed me, and I needed him.”

Bill Haslam was a student at Webb School of Knoxville and, as the youngest sibling, not as exposed to the sudden onset of adult responsibilities, but his mother’s death helped shape a budding religious faith.

Weeks earlier, he had attended an event hosted by Young Life, a Christian outreach ministry aimed at high school students. He recalled the experience as “the first time, ever really, (I) heard the Gospel presented clearly,” and a moment when he began having deeper thoughts.

Cynthia Haslam’s death also made him realize “painful things are going to happen. … You have to decide, is there some meaning beyond just the everyday life you’re living?”

David Bowen was a teacher and coach at Webb who also was involved in Young Life and recalled talking to Bill Haslam. “I think it was during that time that, through his participation in Young Life, sort of the penny dropped and it made sense to him that he could know God personally for himself,” said Bowen, who now is the senior minister of a Presbyterian church in Durham, N.C.

Ann said everyone left their home on the Sunday after her mother died. Her father, she said, gathered the children around and told them that “people are never going to feel sorry for you,” but despite the sadness, the house wasn’t buried by grief.

Even before Cynthia’s death, friends of the family had lived at their property — including a fraternity brother of Jimmy Haslam’s named Bob Corker — and the laughter helped ease the pain.

Bobby Reagan, another fraternity brother of Jimmy Haslam’s and now a consultant in Atlanta, recalled that he lived with the family starting in summer 1974, and said the death of Cynthia helped forge a stronger bond among them.

Emerging partnerships

Soon, some help arrived. Natalie Leach Tucker was a former Miss Tennessee and a childhood friend of Cynthia’s. She and her husband, Alvin Tucker, were friends and vacation partners of the Haslams. The Tuckers’ marriage became troubled and they divorced in August 1975.

Dan Matthews, the former rector of St. John’s Cathedral in Knoxville, remembered that when Jim Haslam thought about dating Natalie Tucker, the minister encouraged the idea.

The couple made no secret of their budding relationship — their first date was at a UT football game. Jim Haslam recalled being nervous, saying the capacity of the stadium was 60,000 or 70,000 people at the time.

“We knew about all those people,” Natalie Haslam said with a laugh.

The couple married in February 1976, creating a real-life Brady Bunch that paired Jim’s three children with Natalie’s three daughters — Jennie, Susan and Carol.

It was a time of new beginnings, in more ways than one.

The family soon took a trip to Florida and was there at the same time as the Bagwells, another Knoxville family, who had roots in the television business.

Jimmy Haslam decided to ask out Dee Bagwell, who had been a friend at Webb School and had a son from a previous marriage. Before the year was out, Jimmy and Dee had tied the knot.

Both Jimmy and Dee had experience with family businesses, but the nature of those businesses was poles apart. Dee’s father, Ross Bagwell Sr., had a successful career in the television production business, working on popular programs including “The Howdy Doody Show.”

By the time she started dating Jimmy, her father had launched his own production company and eventually would create “I-40 Paradise,” the first cable sitcom. In 1994, he sold Cinetel Productions to the E.W. Scripps Co., which used Cinetel’s archive of lifestyle programming to help launch the HGTV cable network.

Fuel retailing certainly can’t compete with show business when it comes to glamour. But Jimmy Haslam had long known that he wanted to work at Pilot, and by the time he and Dee were married, he had begun a full-time career at the company.

Before long, he would be Pilot’s No. 2 man — and on track to lead it into the future.

Business writer Josh Flory may be reached at 865-342-6994.



ABOUT THIS SERIES

When Bill Haslam was sworn in Saturday as Tennessee’s 49th governor, it capped a family rise to prominence that began some 60 years ago. The Knoxville News-Sentinel, a member with the Chattanooga Times Free Press of the Tennessee Newspaper Network, documented the family’s journey to wealth and power.

Sunday: Jim Haslam, family patriarch

Today: The young Haslam family and the start of Pilot Oil Corp.

Tuesday: Pilot gets bigger

Wednesday: The emergence of Bill Haslam

Thursday: The rise of Jimmy, and the Haslam family’s philanthrophy

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