moment, that the small team of executives from Wichita would soon take command of the entire building.
One of the Koch executives on the team was Jim Hannan. Within a few years, he would become Georgia-Pacific’s CEO. On that hot summer morning in 2003, however, Hannan was just a guest. Georgia-Pacific invited the Koch team to its headquarters that day because they hoped Koch Industries might buy a small part of the timber company’s business: a set of struggling pulp mills. It was hardly the kind of deal that would make the newspapers.
What wasn’t visible to anyone outside Koch at the time was that Jim Hannan and his team were only a very small piece of a much larger machine inside Koch Industries. They were the landing team for Koch’s Corporate Development Board, which was about to execute a series of corporate takeovers worth more than $25 billion. The board was targeting dysfunctions in the market, places where the public was undervaluing assets that Koch could step in and seize. Georgia-Pacific was one of those undervalued assets. The Delaware corporation DuPont was another one. The distorted, short-term thinking on Wall Street had depressed the value of both companies. Koch had the cash on hand to exploit those mistakes. That’s what Jim Hannan and his team were in Atlanta to do that day.
Hannan, like Steve Packebush, was a prototypical Koch man. He was lean and athletic, with a square jaw and a manner of speech that was utterly earnest, sincere, and laced with unbendable self-confidence. Hannan was educated at a small school, earning a business degree from California State University, East Bay, in Hayward, and worked as an accountant before joining Koch. Then his real education began. He was hired as a finance guy and promoted from division to division, and from job to job. His real training wasn’t in finance per se but in the Koch method of doing business. By 2003, he was a fluent speaker of Market-Based Management. By the time he arrived in Atlanta that day, Hannan had become the chief financial officer of the Koch Minerals division.
Hannan’s presence in the lobby of Georgia-Pacific’s headquarters was even more bizarre than Koch’s presence at the auction of Farmland’s fertilizer plants a few months earlier. Koch’s interest in Farmland could at least be explained by Koch’s ownership of a fertilizer plant and a few ammonia pipelines. There was absolutely no conceivable reason for Hannan and his team to buy the assets of a timber company that would cost several hundred million dollars. Koch Minerals specialized in trading and shipping petroleum, coal, sulfur, and other dry goods. Koch Industries, as a whole, had zero experience in the wood and paper business. Yet here was a team from Koch, having requested an appointment, and having made it abundantly clear that they were ready and able to spend very serious money if Georgia-Pacific was willing to part with a few of its assets.
The team from Koch walked into the spacious lobby at the foot of the Georgia-Pacific tower. The lobby was like a spacious, public mall, with a small coffee shop, a convenience store, and hundreds of well-dressed professionals walking in every direction. Georgia-Pacific was one of the world’s largest wood and paper products companies in the world, with about fifty-five thousand employees spread across the country. The firm owned dozens of giant wood, pulp, and paper mills, and reported $20.3 billion in sales in 2003.
Georgia-Pacific treated the delegation like visiting royalty. The Koch team was scheduled to receive a private investor’s presentation, to be given on the fifty-first floor of the tower, which employees had taken to calling the “Pink Palace” because of its red granite facing.
The fifty-first floor held an almost mythical status within Georgia-Pacific. The top floor was home to the company’s executive suites and the executive dining room. It was easier to get invited to an exclusive cotillion ball in the old-money neighborhoods of Atlanta than it was to get an invitation to the fifty-first floor. Hannan and his team stepped into a special bank of elevators and were ushered upstairs.
When they arrived at the top of the tower, the elevator doors opened onto a wide corridor that was a hushed cocoon of luxury. The hallways were lined with lush rugs, and the walls were appointed with oil paintings that evoked America’s frontiersman past. Hannan and his team walked past china cabinets in the hallways, filled with antiques, and then passed through a set of open doors made from