Bendix Executive Resigns Amid Rumors of an Affair Summary

  • Last updated on November 11, 2022

Mary Cunningham was an executive at Bendix Corporation who advanced from executive assistant to vice president for strategic planning in only fifteen months. She resigned after a series of well-publicized rumors claimed that her rise in the company was a direct result of her romantic relationship with Bendix chairman William Agee. Cunningham and Agee married in 1982.

Summary of Event

Mary Cunningham had more than two dozen job offers from major financial corporations after she received her master’s degree in business administration from the prestigious Harvard Business School in 1979. Cunningham rejected all the offers and instead opted to take what some corporate recruiters and Harvard Business School classmates might consider a less important position within corporate America. In June, 1979, she accepted a position as an executive assistant to William Agee, chairman of Bendix Corporation, a Fortune 500 aerospace manufacturer in Southfield, Michigan. [kw]Bendix Executive Resigns Amid Rumors of an Affair (Oct. 9, 1980) Bendix Corporation Cunningham, Mary Agee, William Bendix Corporation Cunningham, Mary Agee, William [g]United States;Oct. 9, 1980: Bendix Executive Resigns Amid Rumors of an Affair[01910] [c]Business;Oct. 9, 1980: Bendix Executive Resigns Amid Rumors of an Affair[01910] [c]Sex;Oct. 9, 1980: Bendix Executive Resigns Amid Rumors of an Affair[01910] [c]Women’s issues;Oct. 9, 1980: Bendix Executive Resigns Amid Rumors of an Affair[01910] Panny, William

Mary Cunningham.

(Hulton Archive/Getty Images)

Cunningham, who had striking good looks and was described by several independent sources as beautiful, brilliant, and ambitious, worked closely with Agee on a series of corporate initiative projects. Agee soon became her mentor at the company. One year later, in June, 1980, Agee promoted Cunningham to vice president of corporate and public affairs. Her corporate responsibilities increased, and her relationship with Agee grew stronger. Some Bendix executives became envious of their relationship, and they considered her an obstacle to their access to Agee (she seemed to consume a good deal of his valuable time, often at their expense). In addition, some managers criticized her work. In particular, they were critical of a report she wrote on work at one of the company’s automobile plants. Her detractors believed that her report did little to improve conditions in the plant. Despite their criticisms and concerns, Cunningham’s reputation continued to soar with Agee.

Agee increased Cunningham’s corporate responsibilities at Bendix. Many people within the organization believed that she had done very little there to deserve the vast amount of power that Agee had given her. She rose too rapidly, they said, through the organization in too short a time period.

The corporate grapevine can be deadly. Quiet rumors began to swirl around the company that Cunningham and Agee were having a relationship outside the workplace. Some executives registered their disapproval with William Panny, the president of Bendix, who reported directly to Agee. Allegedly, Panny was getting ready to inform the board of directors about the relationship, now a scandal, and its organizational impact. In early September, 1980, before Panny was able to talk to the board, he was fired by Agee. In what might appear to be an expression of sympathy over Panny’s firing, Jerome Jacobson, the vice president of strategic planning, left Bendix as well. Unsigned letters were sent to Bendix board members about the Agee-Cunningham affair. Agee vehemently denied any romantic link with Cunningham in his conversations with corporate executives and board members.

On September 24, Agee held a meeting with about six hundred Bendix employees. One item on the agenda was his internal reorganization plan to replace Jacobson. Agee announced that he had appointed Cunningham as Jacobson’s replacement, an executive decision that would bring their relationship into the limelight. Soon, the story of their personal relationship and news of her executive-level promotions attracted national media attention.

Cunningham quickly began to stem the tide of public opinion against her. She initially entertained the idea of resigning from the company. For her, a leave of absence would be the perfect solution. It would give her some political and public leverage by allowing her to resign if the board wanted to dismiss her. Moreover, a board would be hard-pressed to reverse itself so soon after it voted to promote her earlier in the week. Ever the strategist, Cunningham sent a letter to the board of directors on September 28, asking that board members grant her a leave of absence. A small subcommittee of the board declared it had “full confidence” in her, but the majority of the board determined that her continued employment at Bendix would compromise the company.

On October 9, some fifteen months after being hired at Bendix, Cunningham resigned as a corporate officer. In her resignation letter, she stated that an “unusual convergence of events” prevented her from carrying out the duties of her position and, therefore, she was severing her employment with Bendix in the best interest of all parties.

Impact

Despite her resignation, Cunningham had no problem finding another job in the corporate world. In March, 1981, she was hired as vice president of strategic planning for Seagram and Sons. She continued her friendship with Agee, and about fifteen months later, in June, 1982, she and Agee were married.

In September, Agee led Bendix to a $1.5 billion hostile takeover bid of Martin Marietta, another aerospace manufacturer. However, Bendix failed in its attempt for two reasons: Agee seriously miscalculated the situation, which resulted in golden parachutes (for Bendix employees), and Martin Marietta was rescued by United Technologies Corporation by means of the infamous Pac Man defense (a strategy in which a company being bought mounts a defense to purchase the takeover company). Cunningham, now a former Bendix employee, was at Agee’s side during the negotiations. Her presence sent the wrong signal to people in high-level corporate circles and, according to some familiar with the case, even helped break the deal between Bendix and Martin Marietta. In fact, a Martin Marietta board member reportedly stated, “We’ll burn this company to the ground before we let that (woman) have it.” That board member was speaking of Cunningham. In the end, Bendix was sold to Allied Technology, and Agee lost his job at Bendix in February, 1983. Bendix Corporation Cunningham, Mary Agee, William

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Cunningham, Mary, with Fran Schumer. Powerplay: What Really Happened at Bendix. New York: Linden Press/Simon & Schuster, 1984. Cunningham gives her side of the story and details her relationship with William Agee.
  • citation-type="booksimple"

    xlink:type="simple">“Mary Agee.” U.S. News & World Report, February 28, 2005. A brief follow-up article on Mary Cunningham (now Agee), twenty-five years after the Bendix scandal.
  • citation-type="booksimple"

    xlink:type="simple">“Mary Cunningham Redux.” Time, March 9, 1981. A newsmagazine article on the scandalous affair, published six months after Cunningham’s resignation from Bendix.
  • citation-type="booksimple"

    xlink:type="simple">Pfeffer, Jeffrey. Managing with Power: Politics and Influence in Organizations. Boston: Harvard Business School Press, 1992. This book is a classic on power in organizations. It devotes a brief section to the conflict between Agee and Cunningham and Bendix president William Panny, and it assesses Agee’s ability to gain advantage by “striking first.”
  • citation-type="booksimple"

    xlink:type="simple">Sloan, Allan. Three Plus One Equals Billions: The Bendix-Martin Marietta War. New York: Arbor House, 1983. This book discusses Bendix Corporation’s attempt to take over Martin Marietta. Also considers Agee and Cunningham’s affair and their conflict with William Panny.

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