Dave Koch shepherded Graco Inc. from a small shop in northeast Minneapolis to a globe-spanning industrial manufacturer during the 45 years he served as CEO and chairman of the board.
He believed that if you made a good product, treated your workers fairly and were generous in the community, the business would prosper. And he railed against executive and Wall Street excesses of the last generation, as he and his wife, Barbara, quietly donated much of their wealth to charitable and educational causes.
Koch died Thursday at 84 after a long struggle with Alzheimer's disease.
"He was a guy who lived his values," said Graco CEO Pat McHale, who joined the company as a machinist supervisor. "He had a commitment to employees. And a commitment to integrity and ethics … for all stakeholders, not just stockholders, including the community. Dave invested in the company, innovation and global expansion. His forte was not day-to-day operating details. He had a global vision. I learned from him and tried to put it into practice."
In 1962, Koch left a job in securities to take over family-owned Graco at age 32, after the founder, Koch's father-in-law, had died, said Dick McFarland, a former Graco board member. At the time, Graco was a niche manufacturer with $33 million in revenues. When Koch turned the company over to younger executives 20 years ago, Graco was producing $500 million in sales, supplying sprayers, pumps and other equipment to factories on several continents.
Today, Graco has emerged bigger, stronger, more profitable. Graco employs 2,700 around the globe and generates more than $1 billion in sales. Koch acknowledged in retirement in a 2004 interview that he turned the company over to a crew with sharper pencils, but who also embraced his values.
"The purpose of business is to serve people," Koch said in 2004. "The customers with a good product, the employees with fair wages, the shareholders with profits and the community through taxes and philanthropy. I've been frustrated in recent years with all these CEOs making millions in a year and scandal after scandal at some of these companies.
"The government, the people, give franchises to business to operate in the public interest. And I haven't heard one businessperson stand up and say, 'I'm sorry for screwing up the system.' "
Koch, an athlete at Notre Dame and the University of St. Thomas, served in the Air Force during the Korean War. He worked for a few years at the predecessor firm to what is now RBC Financial in Minneapolis with McFarland, an Air Force buddy who went on to run the securities firm.
Koch married Barbara Gray, a classmate at Wayzata High School whose father, Leil Gray, was one of two brothers who founded Graco. They invented a grease gun in the 1930s that worked in freezing weather. After Leil died, Koch was asked by the family to take over Graco.
McFarland's securities firm helped Graco sell its shares to the public in 1969. And McFarland served on the board for 40 years. McFarland said Koch led the effort in the 1970s, with the Dayton brothers and other business and civic leaders, to form the so-called "Five Percent Club" to encourage corporate giving.
"Dave was a role model, mentor and my friend," McFarland said Monday. "He cared deeply about his family and this community. He said if you take care of the employees and the customers and sell good products and support services, the stockholders will do well. And they did."
Koch had an easy way, quipped a lot and liked to joke that his best move in business was "sitting next to Barbara Gray" in sixth grade.
Koch was a founder of the Center for Ethical Business Cultures and the Center for Catholic Studies at the University of St. Thomas. He also was a benefactor of the Minnesota Historical Society, the Mill City Museum, and donor to many schools and charities.
"Dave really lived his Christian values," said Chuck Denny, a retired CEO and friend. "He was just one of those solid, Midwestern, fabled citizens who you could count on. He was a modest person with a great sense of humor who never took himself too seriously."
Koch is survived by his wife of 59 years, four children and eight grandchildren. A funeral mass is scheduled Friday at the Church of St. Bartholomew in Wayzata.