Title: John Dasburg
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Title: John Dasburg
Series Title: John Dasburg
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FBL 16
Interviewee: John Dasburg
Interviewer: Julian Pleasants
Date: December 15, 1998

P: This is December 15, 1998. I am in the office of John Dasburg in Minneapolis,
the headquarters of Northwest Airlines. When and where were you born?

D: I was born in New York, in Queens, on January 7, 1943.

P: When did you move to Miami?

D: I moved to Miami in 1948 or 1949. I cannot remember exactly. I had started first
grade in New York. I remember going to PS something or other. Then, my
parents moved to Miami, and I went to first grade again in Miami. So, it must
have been [a] partial year or something.

P: Where did you live in Miami?

D: I lived at 821 NW 35th Court. I lived there all the way through high school and
my first year at the University of Miami. For the first two years at the University of
Miami, I would kind of count it as headquarters. By the time you are an
undergraduate student, I am not sure where you live. So that is where I lived.
My parents ultimately sold the house and moved out.

P: What did your father do?

D: He did many things. In the early years, he drove a bakery truck. He was a night
shift bakery truck driver. He would have to make the deliveries before the sun
was up. Then, he was a paint salesman at a company for a while. He was a
very severe alcoholic and had many periods of time when he could not work or
did not work. Later, in his fifties, he did some security guard stuff and those type
of things--mostly pick-up jobs, the security guard of the condo, or something like

P: How did his alcoholism affect your life?

D: It is probably helpful to contrast my sister and me. I am a very independent
person, and I like my independence. As a consequence, I think my father's
alcoholism had a minimal impact on me. It actually helped encourage me to be
independent. My sister has much more of a dependent-type personality, so it
had a very negative impact on my sister. She feels the loss of not having been
parented, if you will. Because of my father's situation, my mother worked. She
worked in a Lerner's Department Store. Ever before there was a term, latch-key
kid, my sister and I were latch-key kids. For me, that was just fine. I liked

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coming home after school and not having any parent at home. It allowed me to
do whatever I wanted to do. In the case of my sister, when she came home from
school, she wanted parents there, and she did not have them. I think she has
suffered psychologically as a result. My sister and I are very close. I have taken
care of my parents for a long time, decades. In fact, for a long time, they lived
right in the house with me. Now, I have them in a condominium right nearby. I
normally have my sister and her husband move with me wherever I go. I worked
to help get him a job. In fact, he works here at Northwest Airlines as a computer
expert. I am close to my sister, so I can contrast our response to an alcoholic
parent and to a family in which both parents worked which, of course, today is
very common but, in those days, my mother was the only lady who worked in the
entire neighborhood. Everybody else was home, so all the boys came to my
house after school because it was the one place where there were not any
parents and you could have a good time.

P: How would you describe your economic status during this time?

D: I would describe it as poor. My mom was a clerk in a department store, and my
dad was a paint salesman who, on occasion, was not able to be a paint
salesman. So, it was tough. I have worked my whole life. I started working
really intensely when I was in fifth grade. I began with not only cutting our yard,
but cutting other yards, and then I expanded that business and turned it into a
real business by the time I was in sixth and seventh grade. One of the
advantages of having grown up in Miami, if you are going to be in the lawn
business, is that you have to cut yards year round. It is not like in the north
where you close everything down for a while and go into the snow removal
business, which a young kid cannot do because you need a vehicle to do that, for
the most part. I ended up having quite a business. I had a number of the
teenage kids in the neighborhood working for me. We had the old Briggs-
Stratton engine on our lawn mower, and I had a regular repair shop I had built
with spare parts. In those days, you repaired your own lawn mower engines.
You did not send them out and have them repaired. It would have cost too
much. There was gas station at the corner of our street, so I was able to go
down and make sure that I had a plentiful supply of gas. I trained everybody in
what to do and had them do it. I used to go out and inspect them and collected
quite a bit of money. I can remember in sixth grade, I basically bought all of my
own clothes. When the winter came, you would go down and buy two flannel
shirts. You would hope that they would make it through the entire winter and that
you would not need a third. You were very careful to protect those flannel shirts.
I just kept on expanding my work. I ended up with a Miami Herald route when I
was a senior in high school and then, during my two years at the University of
Miami, I delivered the paper early in the morning. I always had something. I
worked in the produce department in the Grand Union Store. Back in those
days, in my recollection, there was not much of an age limitation on working. By

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the time I was in seventh grade and was twelve years old, I was doing some pool
cleaning on Miami Beach. I used to take a series of buses to get over there and
work around the pools. Then, I worked in this produce department in the back.
They never let me be out front because I was so young. The produce would
come in big crates, and I would take it out and separate it and all of that
business. I worked my way through and, ultimately, by the time I was a freshman
in college, I was the head of the Grand Union's produce department on 7th
Street. I did that at night and delivered papers in the middle of the night. We
used to close down the produce department in those days at nine o'clock. Then,
you would spray everything and clean it up. I would get out of there around ten
and have to be up at three o'clock to deliver the papers. I had a huge route on
the edge of Coral Gables. I would finish that route up and go over to the Dunkin
Donuts on the corner of 8th Street and 37th Avenue, Old Douglas Road, and
have a couple of donuts and a coke. I did not drink coffee. I would have a coke.
Then, I would go over to school. I did not pay much attention to my class work
in those days, needless to say. I was either working or partying.

P: Or too tired.

D: Well, I was definitely too tired, but I was never too tired to have a good time. The
order of priority was work first, to earn a living and take care of myself, party
second, and school came third. My academic record proves that.

P: Were you always interested in business, or was this out of necessity?

D: I think it was both. It was clearly out of necessity. It is interesting, a lot of people
will ask, well, you had a working mother when no one else did. You had an
alcoholic father and you did not have any money. You worked from a young age
and you had to buy your own clothes and do this and do that. Did you ever feel
bitter about that or angry about that because other people are more advantaged?
I always loved to work. I liked getting up and working. I liked making money. I
never thought of myself as not having an opportunity or having a limited future. I
always viewed myself as having whatever future I wanted to have. I have been
optimist my entire life. I am absolutely an incorrigible optimist. Things were
never so bad that I did not think of the future as being promising or holding
promise and hope. So, in that environment, I just worked and worked and
worked. I liked working. I liked business. I liked collecting the money. I liked
paying the bills. I liked putting a shop together to fix the old Briggs-Stratton
motors. I liked watching the price of gasoline and, if it was down two cents, going
up and filling extra cans. I just have a set of commercial instincts, and no one
had to teach me that. My father was not in business. My mother was not in
business. I came from a neighborhood where everybody was, at best, blue-collar
and, at worst, not even blue-collar. I think it just came naturally to me.
P: Are there any grandparents who were involved in business?

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D: My grandfather on my mother's side was a trucker. He drove a truck and, as he
got older, he ended up buying it. Then, he ended up buying another truck and
having a driver. So, I certainly understood leverage early on because I realized
the second truck that he was not driving was somehow or another benefitting
him. I liked that idea, and I applied it in my lawn mowing business. I found that it
worked very effectively. If I could charge, in those days, five dollars for a yard
and keep fifty cents or a dollar out of each of those and accumulate them while I
was also charging five dollars for the yards that I was cutting, I was doing quite
well. So, I understood leverage early on, and I certainly saw my grandfather had
the experience. My grandmother on neither side of my family worked, and my
grandfather on my father's side was a marble worker. He was one of the fellows
that did some of the marble in the big buildings in downtown Manhattan.

P: Where did your optimism come from?

D: I was born with it. To this day, I do not believe that you breed or train optimism. I
do not think it is an environmental phenomena. I think optimists are optimists,
regardless of the circumstance they find themselves in, and pessimists--and I
know a number--are pessimists, regardless of the environment they find
themselves in. In fact, you could never create an environment positive enough to
convert a typical pessimist.

P: There is always something wrong.

D: They are cynical, and they are negative.

P: Why did you choose to go to the University of Florida?

D: That is a great story. I had completed two years at the University of Miami.
Many of my friends went to the University of Florida or up to Tallahassee. The
reason I had chosen the University of Miami was because I had so many jobs by
the time I started my freshman year in college, the combination of my Miami
Herald route and, by then, running the produce department at the Grand Union
Store. I also had a great job in a warehouse downtown on Saturdays and
Sunday. Cumulatively, that was more money than I would ever have dreamed
of making in a place like or Tallahassee or Gainesville. It seemed to me that the
amount of income I was making offset the high tuition of a private school. Over
the two year period of time that I was in the University of Miami, in 1961 and
1962, the tuition increased. It became very clear to me that the cost of education
was going to continue to increase. The combination of burning the candles at

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both ends, as they say, was exhausting me. In fact, I had arrived at the height of
6'1", and I weighed about 150 pounds. I did not look particularly healthy, and I
did not feel particularly healthy. I made a decision one evening while I was sitting
around and talking to some friends over in the fraternity house. I was a Phi Delt
[Phi Delta Theta]. We had a little fraternity house which was the least fancy in
the entire campus at that time. It was over, again, on 8th Street and Douglas
Road, or 37th, catty-cornered from where I used to get my donuts. I sat around
there one night. There were a lot of guys who had a lot of money, who came
from wealthy northern families, and were going to the University of Miami. They
said, why, with no wealth and no money, are you going to the University of Miami
and paying all of this tuition? I explained to them the economics of my jobs. One
of these fellows, named Rick Mooney and with whom I am very close to this day,
told me, you know, you ought to give some thought to going to a state university
where the tuition is a lot less. Maybe you will make less tending bar or working in
a restaurant, but you will put on a little weight. You will get a lot more healthy,
and you will have a little bit more time for your schooling. Rick was right. His
observation was right. I thought about it that evening for a couple of hours. He
and I roomed together, and I said, Rick, I am going to apply to the University of
Florida and to Florida State [University]. There was another fraternity brother
who I was very close to, not as close as I was with Rick, but he was a good
friend. He said, hey, I will tell you what. I feel like taking a drive for a few days.
Let us drive up to Tallahassee. We will start at the top of the state. You apply
there. Then, we will go down to Gainesville. This was actually about a month
later. School was now out. It was in June. I was working with a shipping
company, actually working on the ships. I was working on some repair work in
the Miami River. I said, all right, I will take a few days off. In those days, every
day mattered because you did not get paid when you did not work. I said, I will
take a couple of days off, and we will go up to Tallahassee. So, we went up to
Tallahassee, and I went into where you matriculate. There was a very nice lady
in there, or she appeared to be. I told here, I am John Dasburg, and I had my
transcripts with me. I had done very poorly in my first two years as an
undergraduate. I was right at whatever the point system was, if I had 1/100 of a
point less, I would have been out of school. If I had 1/100 more, I would have, in
my opinion, wasted my time. I was literally right on the average. I had some bad
semesters in there, and I had some very good semesters. I had some semesters
with A's and B's and some semesters where I had failed a few courses. I did not
even go to take the final exam. So, I went up to Tallahassee, and I handed her
my transcript, and said, I would like to apply to go to Florida State. She sat back
and looked at my transcript and looked at me. I was probably a little grubby,
having been in the car for however many hours it took to drive to Tallahassee
from Miami. We probably stopped along the way and had a six pack of beer or
so. By the time I got there, I am sure I smelled and stunk and everything else.
She kind of looked at me and squinted a little bit. I would say she was about fifty-
five, in her fifties. She said, you know, son, we have a lot of rotten students up

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here, and we do not need any more. I tried to charm her a little bit, which did not
work, and I left. My buddy was with me and, of course, he was laughing over in
the corner. He said, well, you did not trick her, did you? So, we drove back to
the University of Florida. We got into the University of Florida, and it was in the
summer, but they were on the trimester back then. So there was actually a
semester school going on in the summer, but it was one of the earlier first years
with the trimester. This would have been the summer of 1963. I was trying to
matriculate in September of 1963. I arrived, and it was a little late. There was a
Phi Delt house at the University of Florida across from the Tigert Hall
[Admnistration building on 13th Street]. The ATO [Alpha Tau Omega] house was
on one corner. The Phi Delt house was on the other. There were not very many
kids in school that summer. It was quiet, and it seemed beautiful and restful to
me, which was not an emotion I normally cared much about at that age and in my
circumstances. I went over to the fraternity house. There were three guys in the
fraternity house that summer. They were all there going to summer school. One
was Ed Ames and one was Tim Titus. The other fellow's last name was Tuttle,
and he came from the family that had the Julia Tuttle bridge named after them.
He was in engineering. Ed was in dairy science, and his dad worked on a farm
down in Arcadia, Florida. Tim Titus's parents were divorced, and he did not
have any particular place to go that summer. I think his mother lived somewhere
up in Georgia. He decided to use the support money they were getting to go to
school and try to get out a little sooner. We all went over to a place called Sam's
and drank a little beer and then drank a little more beer. Then, we went over to
the ATO house and did a few things that we should not have done. There were
two or three guys there. They came out, and we had a little street rumble. Then,
we all became friends and drank a little more beer. I went to bed and got up the
next day and went over for my interview. Well, it was not my interview. I had not
set up any appointments, of course. Nobody at my age and with my background
would ever think to set up an appointment. We had just gotten into the car and
had driven to Tallahassee and then had driven to Florida. I did not even know if
the schools were open or if the buildings were open. Maybe they had been
closed. I went over to the Tigert Hall and asked some questions. I remember I
had to walk down to what would have been the southern corner on first floor.
There was a little window with that smoky glass on it. The window was open,
and there was a really nice woman, in her fifties again, who reminded me a little
bit of Florida State. In fact, I said, if it did not work well with the last fifty-year-old
woman, it is not going to work well this time. I had a terrible hangover because
we had stayed up most of the night, but I had shaved. I had not shaved when I
went to Tallahassee. I concluded that, probably, shaving would be a good idea.
So, I shaved that morning, and I showered. I had an awful headache. I went in
and handed her my transcripts and said that I would like to apply to attend the
University of Florida. She kind of sat around and looked at the stuff and looked
at me and looked around and scratched something on her little thing. She said,
you know, you have a really interesting background. She actually had bothered

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to read the transcript. She said, I notice here that you can get some A's in what
would appear to be some pretty hard courses, and you can fail some what would
appear to be some pretty easy courses. What is the explanation for that? So, I
told her the truth. I said, sometimes I get interested, and sometimes I am now.
Sometimes, I am working. Sometimes, I do not even bother taking the exam
because I am too busy, or I am tired, or I am asleep. I said, I know it is a terrible
record, and I wish it was not, it is, but in any event, I have a 2.0 average, and I
think I can do better than that if you guys will let me in here. I explained to her
that I was working all of these jobs and that the tuition was so high and that I
thought if I could go up there and pay a smaller tuition and only work in a
restaurant or something, than I would be better off. She said, you know, I agree
with you, and I think we ought to let you in this place. She said, but I see here
that you are taking a course this summer down at the University of Miami
because you needed three more credits to actually get my Associate of Arts
degree. She said, we are not going to transfer you in here unless you have the
Associate of Arts degree. I said, okay. It had not entered my mind that the
course was particularly important, even though I had signed up for it. I remember
it was in qualitative chemistry, and here I was, wondering around the state
aimlessly, drunk half the time, not paying any attention to anything, and I was
actually in school at the University of Miami. She said, you know, I am guessing
that it is going to turn out to be a real challenge for you, given your current
attitude. I said, what happens if I pass that course, will I be able to get in? She
said, I am sure we will end up letting you in. She said, you just go down and
pass that course and send the work up here, and I will get all the paperwork
done. If you pass it, you will be in school. I could not believe it. It was the nicest
thing that had ever happened to me. I went back, and we celebrated. Gosh, did
we drink beer that afternoon! The next day, we got in the car, and we drove back
down to Miami. I went back to working for the ship company, and I was
supposed to leave that week and go down to the Caribbean on one of their boats
and help them do some deckhand work. I told them I could not do that now. I
had to go over here and actually study this course. I had not even bought the
book for it, and we were in, about, the third week of the course. So, I went down
and bought the book. I had not attended a class yet. I started to go to all of the
classes, and I rearranged to go over and work on the Miami River in the
afternoons. I did the course in the morning, or vice versa, I cannot remember
exactly now. I remember I worked the job, and I got the course in. I got a B in
the chemistry course, even though in the first few weeks, I had missed a test and
a 100 other things. I ended the summer doing the trip down to the Caribbean
and made a lot of extra money. Then, in September, I was allowed to enter the
University of Florida. I had completed two years [at Miami]. I came in the
engineering program and moved right into the fraternity house, which was a
terrible error, and proceeded to be a University of Florida fighting-gator, beer-
drinking Phi Delt. I did that for three years in various engineering disciplines,
trying one to the other and fumbling around, trying to figure out what I wanted to

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do, and concluding that I actually had no interest in being an engineer by the end
of undergraduate school. However, that was what I had gotten my degree in. I
had some terrible grades, and I had some good grades. One semester, I might
have failed a course, and the next semester, I would get an A. My transcript, for
anyone who might want to fumble around with it, is borderline bizarre. My
recollection is that there was one semester there when I went over to Daytona
Beach for spring break and did not come back. I did not do any dropping or
adding either, so I failed every course. I got one of those little pink sheets that
put me on probation and everything, but I came back the next semester and got
an A in every course, or almost an A in every course, and balanced the two out.

P: What does it about the University of Florida if FSU turned you down and UF took

D: Well, we are going to find out because I have a story about Dean John McFerrin
[Dr. John Berry McFerrin, UF, College of Business Administration, 1937-1972]
that is just as good. I graduated undergraduate school, and I knew that I did not
want to be an engineer. Actually, I did not have particularly good grades. I
graduated from a large high school, about 4,000 students, that was ten through
twelth grades, it was not ninth grade. There were 1,000 kids in my graduating
class. We probably started with about 1,500, and about one-third of them never
even graduated high school. I graduated toward the bottom of my high school
class. I can guarantee you that I graduated toward the bottom of that
engineering class. So, I decided I would join the navy. I went in the navy, and I
finished boot camp.

P: This was in 1966?

D: This would have been 1966. I finished boot camp, and I went to Vietnam for a
year. It was an interesting experience. It was on the Kwaviet River between
Kwaviet and Dong Ha, right below the DMZ. I was in this river group where we
had a flotilla of about twelve different boats. We had the little mike boats and the
river boats and everything. They would put one officer in each flotilla. You would
go down the river and spend the night at Dong Ha. Then, you would come up
the river and get off. Then, the other officer would go down, you did that every
other day. They made a movie of what I did in that river called Apocalypse Now.
Dong Ha represents the city that is where North Vietnam, South Vietnam, and
Laos all come together. Kwaviet is the city that is on the China Sea there. So, I
did that for a year.

P: What was your rank?

D: I was an ensign.
P: And your responsibility?

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D: I had a split tour. I had six months on the Kwaviet River, and I was two officers
who were in charge of the flotilla that went up and down the river.

P: Mainly patrol duty?

D: No, it was a combination. We had patrol boats in our flotilla, but the job we had
was to get ammunition and food, sea rats, up and down this river. My job was to
go down the river with the gunboats at either end. We also had a thing called a
lark, which was a mine sweep. The mine sweep would go down first and then a
gunboat. Then, we would have about nine or ten boats filled with black powder,
ammunition, rockets, mortars, and food. Then, we ended up with a gun boat and
a thing called a mike boat, which was a little old World War II thing that had
machine guns all over it. I would ride any boat I wanted to. In those days, the
Viet Cong would either rocket us, mortar us, or mine us. Mining was terrible
because we had all of this black powder in the boat. When you hit a mine, the
boat would just disappear, just disintegrate. It was very important not to be on a
boat that disintegrated, of course. The choice of what boat you were going down
the river on was very, very important.

P: A life or death decision.

D: It was absolutely a life or death decision. So, I had that job. I was there for six
months. There was a lieutenant commander down in Da Nang who had to leave
on emergency leave. They used to have a thing in Vietnam called emergency
leave. If you had some serious family problem, they would take you out of the
country. They would bring you back. You had to complete your tour, but they
would disjoint you. So, this lieutenant commander had to go back. He was the
head of the floating dry dock, the machine shop, and the metal shops in Da
Nang. Word got out that they lost the lieutenant commander, that he had to go
back and was there anybody who had an engineering background and a dry-
docking background who was an officer rank who could temporarily be assigned
this job? Now, the likelihood of finding someone with dry-docking experience,
engineering experience, and who is an officer, they thought, was zero. They
thought they were going to have to go to the Phillippines and take somebody out
of Subic Bay. It so happened that when I worked for that company on the Miami
River and when I used to go down to the Caribbean, one of my jobs was on a
series of water barges because a lot of the Caribbean islands are short water. I
worked on a small water tanker. We used to go to Roosevelt Roads Naval Base
in Puerto Rico and fill the tanks up with the fresh water at the naval base and
then take them over to islands like St. Thomas. St. Thomas, as an example, is a
great tourist island, but it has a water shortage. We used to take water over
there and go back and forth. We were caught in a bad storm one time and ran

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over a reef and really seriously damaged the bottom of the boat and some of the
props. We ended having to go on a dry dock in San Juan, so I had to bring the
boat around and come into San Juan. We were dry-docked for six weeks. The
way it worked is you were paid while you were on the boat, even though you
were not out doing anything. We would hang out in town, of course. I will not get
into the details of what we did. It was not good, but we did it. The point was that
when we came back at night, I would go around and talk to the dock masters. I
found it very interesting to see how the dry-docking system worked, so I learned
to dry-dock. I worked with the guys who were there, and they were flattered that
I was interested in what they were doing. I actually learned how to lift the floating
dry dock and how it worked. Having been interested in engineering and all that
business, I kind of had an aptitude for it. I was the only the guy in Vietnam who
was an officer, had a degree in engineering, and had hands-on experience
raising and lowering a floating dry dock, so I raised my hand [when they asked
that question]. They took me down to Da Nang. It was a lieutenant
commander's job, not an ensign's job, so I had all of this great food and this great
facility. I had about 1,000 men working for me, which is unheard of for an ensign
in a war zone. We had a ball. I developed a new way of dry-docking boats
because there were a lot of small boats in Vietnam, and when they got mined or
blown, or hit, you would tie up an entire dry dock to put a boat in there that was a
fraction of the size of the boat for which the dry dock was really designed. The
way you dry-docked boats is that you actually have a diagram that looks like an
architect's plan for the bottom of the boat. You move stuff around on the bottom
of the boat that builds a frame that matches the architectural plans for the bottom
of the boat. Then, you pull the boat in and tie it up with lines. When you bring it
up, you pump the water out. The little frame sits right on the bottom of the boat
and lifts it out of the water. What I did was to say, if we can do one, why can we
not do four because the dock would handle four of these boats. Well, it has
never been done before; you have only so many blocks; you can only do that and
only do this. I said, yes, but most of the boats that we bring in here have roughly
similar bottoms. We kind of know what they look like and, based on my
calculations, there are enough blocks to do four of these boats. The blocks run
horizontally across the dock, about, every five feet. It is not as if you bring a boat
in the back of the dock, you have used the blocks in the front. You do not pick
them up and move them over there. So, we rearranged the little pieces that fit on
the top. We had plenty of those, and what we did not have, we could make. We
were in a war zone, and it seemed to me that we ought to get the boats in and
out fast. I had an appreciation for this because I had been on a river where the
boats were getting hit and where we were short boats. Now, I was in Da Nang,
and I said, those guys need these boats up there. Let us not be so bureaucratic
about this and just put one boat in a time in here. Let us do four. So, we
developed this technique. We built the blocks for four, and we started lining
boats up and bringing them in. All of a sudden, all of the boats were coming in.
We were doing four boats in twenty-four hours. Nobody had ever dry-docked this

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many boats before. I received a nice write-up in Stars and Stripes for having the
most boats in a twelve-month period of time, and I had only done six months.
For a twelve-month period of time, it was the most boats ever dry-docked in any
navy dry dock.

P: Did this experience help you in your later business ventures?

D: Sure. All of these experiences are cumulative. I finished that six months in
Vietnam. I had the GI bill. I came back, and I got married. That is a separate
story, but I married MaryLou Diez, who I met when I was in high school. We had
gotten engaged just prior to me going to Vietnam, and then we got married right
when I came back. I exited the navy as a full Lieutenant in the navy. I stayed in
the reserves and ended up making Lieutenant Commander in the reserves. I
drilled over in Jacksonville.

P: What year did you leave the navy?

D: I left the navy in 1969. My reserve assignment was in Jacksonville, Florida,
which worked out great. My wife taught at the vocational school in Starke,
Florida. I am missing a step. When the navy let me out, they started by shipping
me to Jacksonville, which is where I signed in. That minimized the cost to the
navy of letting me out because they could then officially let me out in
Jacksonville. My wife taught school at that time at Forest High School.
Incidentally, she was the first white teacher to be bussed to a black school. In
Jacksonville, they did the reverse at first. Instead of moving the students, they
moved the teachers, so she was the first teacher who was moved. She had
been at Forest High School, and then she was moved to an all African American
school. It was an interesting experience, and it really opened her mind. I went
over and helped her with graduation, it kind of gave you a different view of the
world. In any event, we were in Jacksonville. She was teaching. I was in the
reserves when I got out, and I applied to the University of Florida. I actually
applied to about ten universities to get an MBA because I knew I did not want to
be an engineer. I had the GI Bill that was accessible. I realized I had spent my
whole life, in some version or another, being in business. What drove me to dry
dock four boats was the thought of the efficiency of dry-docking the four boats
and how you could find a way to improve your productivity. I looked back and
whether it was the lawn mowing business or the Miami Herald route or the
produce department or the warehouses or the Miami shipyards or whatever it
was, I was always innovating ways to get more production per unit of input. I
was always interested in how much money you could make in exchange for what
you were doing. In the navy, all I did was convert that kind of attitude toward dry-
docking more boats, the payoff being that you were shipping the boats to the
guys who needed them. My wife convinced me that I had an aptitude for
business. Mary Lou said, you have an aptitude for business, get an MBA, and

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get a business career. You are not, by personality-type, an engineer. I said, I
think you are probably right about that. So, I applied to about ten schools to get
an MBA. I was turned down in all ten, including the University of Florida, but the
rejection I received from the University of Florida was basically a conditional
rejection. Dean John McFerrin wanted to talk to me. He was the dean of the
business school at the time. I went over and talked to him. He said, well, you
are married. First, he reminded me, which was not necessary, that I had a
terrible undergraduate record. However, I had done very well on the Graduate
Records Exam. At that time, I had not even taken the G.M.A.T. because I did not
know to take it. I am not sure that the G.M.A.T. was very popular back then. It
was really the Graduate Records Exam. So, I took the Graduate Records Exam
and had done very well on it, and he interviewed me. We chatted a little bit. He
pointed out my odd background, and he said, normally, I would not even consider
letting you into the MBA program, but you have a very fine Graduate Records
Exam score. You are married. You were not married in undergraduate school.
You have completed your military, and you have served a year in Vietnam. He
said, I will let you in, but only on probation. I want you to take these three
courses. He told me the three courses he wanted me to take, and he said, I want
you to have a B or better in each of those courses. If you get a B or better in
each of those courses, I will lift your probation, and you will matriculate full-time
in the MBA program. So with Dean John McFerrin, I had my second encounter
with the University of Florida. The first one was the registrar, which let me in
when Florida State turned me down, and the second was Dean John McFerrin,
who let me in the MBA program when nine other schools turned me down. So, I
proceeded in the MBA program. I studied very hard. In those days, they did not
rank how you graduated in your class. I would guess that I graduated first, by
academic average. Somebody could go back and look, but I set the world on fire
in my MBA program.

P: If I may, let's go back and talk a little bit more about the impact that Vietnam had
on you personally?

D: Almost none. I am asked that question all the time because, as I have gotten
older, I realized that very few people went to Vietnam. You can go through your
whole life and almost not meet anybody who was there, which is curious. It is not
like World War II where everybody you met in the 1950s and 1960s had been in
World War II. In the 1990s, you have to look for somebody who went to Vietnam.
I almost am disappointed in myself in that I cannot say it had some impact on
me, but I must say I do not know of any noticeable impact it had on me. I went. I
did my thing. I was shot at. I was rocketed. I shot back. I had guys next to me
who were injured. I had a good friend whose foot was blown off and all kinds of
crazy stuff. I am a very empathetic person, and I would think that I am a
thoughtful and understanding person. Nevertheless, somehow or another, my
view of that was that it was a job. I was assigned to do it. I went over for a year

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and did it. I did what I was supposed to do. I took the rocket and the mortars
and made it and came back. To the extent that you can remember a dream or
nightmare, I have never had one nightmare and have never had one dream
about the year that I spent in Vietnam.

P: What is your view on the war? Should we have fought that war?

D: At the time, I thought we should. In retrospect, knowing everything I know now,
my view is, of course, we should not have. It as a terrible waste of everything. If
you know where the world stands today, you know that Communism was going
to collapse anyhow. You have the benefit of knowing that, and you would view
Vietnam in no way being material to the collapse of Communism. On the other
hand, containing Russia turned out to be the exact right foreign policy and the
right policy for America. Containing Russia, I think, is what really bore the fruits
because it collapsed from within. All that we had to do was outlive it. Whether
South Vietnam had become Communist or not turns out to be irrelevant. It did
become Communist. So, it was a terrible, terrible waste and, in retrospect, a
terrible tragedy. As to whatever impact it had on me, personally, is sufficiently
subconscious that I have never been able to draw any particular conclusions
from it. I certainly never have had a nightmare or a recollection of it in my sleep.
I can sit at this desk on any day, in a rather stressful environment. I can sit back
and try to just relax by letting my mind wander. Of all of the things that I may
wander to in my life, some of which are tragic and some of which are not, it never
wanders to Vietnam, not even to the gamma-globulin shot which they gave you
when you got off of the plane, which was probably the one thing that hurt the
worst about the entire tour of duty.

P: What changed your attitude toward academics?

D: I matured. There was no one in my family who had gone to college. We have
had a discussion of what kind of family life I had. My parents graduated high
school in an environment in which they both got social promotions. They did not
graduate high school because they were academic. Neither one of my parents
are readers. Neither one of my parents are particularly articulate. To say it was
not academic is not even close to accurate. I came from a household of people
who, basically, were quasi-literate and clearly had no academic inclinations at all.
I had worked all of my life, and I had been poor all of my life. I never thought of
academics as anything more than some basic right to work, almost. In fact,
when I graduated high school and we had, back in those days, our perfunctory
three minutes of counseling, I was told, you are a real outdoors guy, you do this
and that and the other thing. You have a terrible academic record. You should
not go to college. You ought to do construction work. I was told. I was advised
that I ought not to go to college. I was counseled by my high school counselor
that, college would be a waste of time for you, John. You ought to go out and do

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construction work and some of the work in the rivers and boats and stuff. Maybe,
join the merchant marines, but college would be a waste of time for you.
Undergraduate school, in many respects upon reflection, was not a good use of
my time. It was not a good use of the scarce resources of the state. What we
are discovering is that there are a hell of a lot of people out there just like me who
do not go through the maturing process until later in life. I would guess that most
inner city kids grew up not so dissimilarly to how I grew up. You do not have a
plane of reference. Until you develop that plane of reference, which requires a
broader array of experiences, you are kind of unguided. I would say that I was
unguided. Boot camp was a major experience for me. It was the first time that I
had a boss who was a real boss, who I could not say no to, and who disciplined
me. Anything else that I had done [previous to that], I could have quit my jobs.
My parents certainly did not parent me. Boot camp was an eye opener. Boot
camp was, to me, one of the most memorable experiences in my entire life, not
Vietnam, but my boot camp. I came out at the other side of that sixteen weeks of
boot camp as a different person than when I went in.

[So I had no counseling as to what direction to go academically.] I had no idea
what to get an education in. In other words, I did not know whether I should be
an engineer. In fact, I started in architecture, and I switched to pre-med. Then, I
switched to something else. Then, I switched to different kinds of engineering. I
was not driven to be something. In other words, I did not say, I want to be a
doctor, or I want to be a lawyer, or I want to be an engineer. I was driven to get
an education only because I believed that having an education was better than
not having an education. In today's view, with a slightly more sophisticated
vocabulary, what I would say is that if someone were counseling me, at a
minimum, they should have told me what I deduced, which is, at least keep your
options open. An undergraduate education gives you an option. You may
choose not to exercise that option, but it gives you an option. So, I went to
undergraduate school because I deduced that undergraduate school would give
me an option. An option for what? I was not certain. In fact, I was not certain at
all, but it would give me an option. I proceeded through undergraduate school in
a very immature state because I had not been parented and because I grew up
in the environment that I grew up in. As I went through the undergraduate school
period of my life, I was extraordinarily immature, by any reasonable definition of
what is meant by maturity, and in thinking in terms of a modicum of self-
discipline, a modicum of direction, a modicum of civility. Put all of the descriptors
in there. I did not have those. I did not have those anchors. When I got to the
University of Florida, incidentally, I worked all of the time also. I was tending bar.

P: Comment a little bit about what you did do while you were at UF.
D: I worked at the burger house, which was opposite the school over there. Which
is the road that runs east and west?

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P: University Avenue.

D: It was on University Avenue where the College Inn was. There was a place there
called the burger house. It was Rubys' burger house. I worked in a burger
house. I worked in the kitchen, and I tended bar. I closed the placed down every
night. I was back into my late hours again. I also ran into a fellow whose father
had a deli in Miami and who had gone to Miami Senior High. He and I were
talking one day. He said, you are in a fraternity. I can get out of this meat place
in Ocala the rights to sell flank steaks up here. Would you be interested in selling
flank steaks to the fraternity house since you are a fraternity guy. I cut a deal
with him. It seemed to work for me. I could make a lot of money if I did it. He
sent me up a box of flank steaks, and I started marketing them in the fraternity
houses. Of course, my price was lower than anybody's, and all of the guys in the
fraternity houses would love to have steak. I started selling these boxes and
boxes of flank steaks to all of the fraternities, and I made a scad of money on it. I
was selling flank steaks while I was also working over in the burger house.
Those would be illustrations of some of the things that I did. I also rented a very
large house behind the burger house, and then sublet it at a net zero to me, so I
did not have to pay any rent or utilities. The combination of renting the house
and subletting it and working at the burger house, which was easy and I did not
need a car because it was right there, and then, only having to use my car to get
to and from the fraternity houses to deliver my meat worked out fine. Anyhow, I
was very immature in undergraduate school, but I got through. I did not want to
use my undergraduate education. I did not want to be an engineer. I was totally
without direction, and I joined the navy. I basically joined the navy as a default
case. I was not drafted. They did not have numbers back then, in 1966. There
was no compulsion to join. I could have gotten an engineering deferment and
gone somewhere to work as an engineer. I just did not want to do that, so I rang
up the navy. The navy did not come looking for me. I went looking for the navy.
I said, I do not know what the heck I want to do. All I know is that I do not want
to be an engineer, so I want to get out of here. Now, as it turns out, I was a 1-A.
If I had hung around, in 1967 or 1968, I probably would have been drafted
anyhow as the war progressed. However, I actually went to the navy. The navy
did not call me up. When I got out of the navy, the first thing I had was a wife.
That was a maturing experience. The second thing I had, for the first time in my
life, was money. By modern standards, it is pretty modest, but my wife taught
school, and I had the GI Bill. For the first time in my life, I could go to school and
buy the books. In undergraduate school, most of the time, I did not buy the
books because they cost so much. I would either borrow the book, if I could, or I
would go to the library and use the book, or I just did not have a book. I would do
the best that I could based on the classroom. I would say that for half of the
courses that I took in undergraduate school, I did not own the book. This was a
big revelation. I was now going to have the book for every single course. Not
only was I going to have the book for every course, I was going to have the

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workbooks for every course and, when I was done with the class, I could go and
study. I did not have to go over and deliver papers or work in the bar or deliver
meat or do any of that anymore. With what I had now, I could open those books
and actually learn what was inside them. What I discovered about myself the
first semester in the MBA program, which was really an eye opener to me, was
that I am a very academic person. It turned out that I am more of an academic
person than I am a worker, if you will. In other words, I would much rather study
and think than I would actually implement. Maybe there is a better way to say
that. I found out that I was more interested in studying and thinking than I was in
implementing, which was an eye opener to me. I found studying in the first
semester in the MBA program an absolute joy. I loved every minute of it. It was
the first time in my entire life that I had not worked. I went one entire semester of
college, from the age of whatever you are in fifth grade until then, I had always
been at work. For the first time ever! I never, ever had not worked. It was such
a liberating experience to just be a student. I had never been a student in my
entire life. I had always focused on a job and earning a living and doing stuff, or I
had been immature and when I was not doing that, I was partying. I got an A in
partying. I got an A in working. I got an F in being a student, in undergraduate
school. Now, I was not partying. I was married. I was not working. I was
focusing 100 percent on my academic environment, and I loved it. I fell in love
with it.

P: What material were you studying? Business administration?

D: Yes, and it is clear that it appealed to me. In fact, that was a big part of it too. It
was maturity. It was not working. It was being academic, and it was the subject
matter I really liked. Today, I am very academic. I study and think and read all of
the time. My hobby is reading. That is all I do. I read philosophy, biography,
and economics. Since economics is in there, the part of philosophy I like is
political philosophy and political economics. I still stay, more or less, on the
business side. I read biography, more or less, for entertainment. I probably
today spend twenty hours a week reading for myself, not reading for Northwest
Airlines, but twenty hours a week reading just for me. That is a heck of a lot of
reading to do. I do it every spare minute. I cart books around. I have one here
that I just ordered. I get the New York Review of Books. I read the little review
on them, or the Times Literary Supplement. Then, I buy the books. I cart them
around, and I read them. I read them every chance I can. I will have this book
read in two weeks. It is a pretty academic book, but I will read it. It is called
Essays on Modern Thought. That is what I do now. Underlying, whatever was
going on in high school and undergraduate school, there was some core person
down there who actually was academic but who just had never come to the
surface, never emerged. So, I finished my MBA, I said, we were not ranked but I
am guessing that, based on what I know, I probably had the highest average in
my MBA class. In the last couple of semesters of the MBA program, one of the

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economic professors, a fellow named Roberts, came to me. He said, I really like
what you have done in economics here and this MBA program and, because of
your math background and engineering and because of how quantitative your
mind works and how quantitative you are by mental process, I think you ought to
get your Ph.D. in economics. He said, I have talked to some people. I think he
came from the University of Pennsylvania. For a Ph.D., he was a very young
guy. He was an activist. He was the first activist I met that I noticed. I probably
met plenty of them but never noticed them. He was the one who was very active
in preserving the canal system and everything in the state of Florida, and he led
all of the protests against the core of engineers when they were trying to do
whatever they were trying to do in the state.

P: Cross Florida Barge Canal?

D: Yes, across Florida. He was the University of Florida economics professor who
was the activist that led the campaign against the Cross Florida Barge Canal.
That is exactly what he was. His last name was Roberts. I cannot remember his
first name right now. He said, I can arrange a fellowship for you to get your
Ph.D. in economics. He talked to me a lot about it. The business law professor
who I had, whose name escapes, came over to me and said, you are terrific in
this business law business. How would you like to go to law school? I think I can
go over and talk to some people and tell them that I think you ought to go to law
school. I said, I did not take the law school admissions test. Then I remember
that in my last semester in my undergraduate school, a fellow in the fraternity
house took the law school admissions test and did very well in it. Another fellow,
Billy Joe McCabe, and I, who were both in engineering school, did not like this
particular guy. He was going around and bragging about how he had been
accepted to law school and how he had gotten these great grades on his LSAT.
Billy Joe and I had no intention to go to law school. Billy Joe enlisted signed up
to go in the marines when I signed up to go into the navy. We both graduated in
the engineering school together and both at the bottom of the class, I am sure.
We were great in the fraternity house. We told this guy, what is such the big deal
about getting a high grade on the law school admissions test? He was a history
major which, of course, engineers always poo-pooed. We said, we will take the
law school test, and we will do better than you. We literally took the law school
admissions test with no intention of ever going to law school.

P: Did you do better?

D: Yes, we did better. So, I had this law school admissions test, and it tells you how
serendipitous life is. I did not know whether I wanted to get a Ph.D. in economics
or go to law school. MaryLou and I talked it over, and she said, I do not know if
one makes a difference over the other. You love business, and either one can
probably work. If I went to law school, I was not going to be a lawyer. I was

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going to take all of the tax courses and the corporate courses and apply it to
business. If I got a Ph.D. in economics, I was also thinking of finding a way to
convert it into a business career. I was not thinking of either one from an
academic point of view or practicing law. I was thinking for both, how could I take
them, combine them with my MBA and convert them into a business experience.
So, we talked about it, and we literally flipped a coin. Heads was law school,
and tales was Ph.D. in economics. I will never forget. We sat right in the living
room, and we cleared the top of this little wooden coffee table. We had rented a
little apartment over by Shands medical center. We cleared the top, and I flipped
the coin like that so it would land there. I did not want it to land on the rug
because, in those days, you had those rugs with those things sticking up in them
so you would never know whether you were on heads or tails without knocking it
over. I flipped it about twelve inches high, and it landed on the table and rolled
around a little bit. It landed on heads. I said, well, honey, we are going to law
school. She said, how can you go to law school? You do not have the law
school admissions test. I said, this is a crazy thing. She knew Billy Joe McCabe
by then because he had come back and was back in college. I said, do you
know Billy Joe? She said, yes. I said, you will not believe this, but an old
fraternity brother of ours took the LSAT and was bragging about how well he did
and how he was accepted into law school. Billy Joe and I, who were viewed as
the bums of the fraternity, said, we are smart enough to better than you. So, we
took it on a dare. I said, I do not even know if it is any good or if they modified
the test or how many years you can use it or whatever. So, I applied to law
school at the University of Florida. They looked this thing up and found out that
an LSAT was good for five years, and I just made it by about a month. So, they
took my LSAT, and I had done reasonably well, and they accepted me into law
school. Now, I go back to my working life. Now, a little of the old me came out. I
really did not want to be a lawyer. I really did not want to take the tax and
corporate courses. If I had actually not gotten around to flipping the coin, I would
have chosen the Ph.D. in economics. Since it was a 51-49 percent or close to a
50-50 percent choice, I flipped the coin. Once the coin came down to law school,
I went. If somebody had put a gun to my head and said, you cannot flip a coin,
law school or economics, somehow another or another, I would have said
economics. It is like, pick a color, red. Pick a flower, rose. It would have been
that kind of an association game.

P: Do you regret your choice?

D: Oh, no. It was the right choice. A Ph.D. in economics would have been a
mistake, in my opinion. Although, there again, you do not know what I would
have done with it. No, the right thing for me was a law degree. There is no
question about it. I had this assistantship over at the business school. I taught
accounting in the business school, and I went to law school. Now, I was back to
where I was working and teaching my accounting. When you teach, for the first

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time, it is very time consuming. Anybody who has ever taught knows that by the
time you prepare your lectures and grade your tests, if you are really energetic
about it and you want to do a good job and you want to impart enthusiasm to
your students, it is a tough job. It is a training job. After I did it for a semester, I
said, boy, teachers work hard. They work a lot harder than you might think they
work, if they are good, if they are really sincerely interested in their students, and
I was. I taught over there the first two sections of general accounting, 101 and
102, or whatever they were called. I taught those while I attended law school.
Then, I formed a little commodity joint venture. I raised some money and got into
commodity trading. I went up to Chicago in the Chicago Mercantile Exchange. I
visited the floor, met some people, and opened some accounts. I had a little
mutual fund I had put together with some people whom I had gotten to know and
kids who came from better families and everything. I managed my hog-trading
fund. We traded pig futures, nothing else. In fact, at the end of the MBA
program, you had to write a paper, and I wrote it on stochastic modeling and all
that business of the pig futures.

P: By the way, it is a good thing you are not still in pig futures.

D: Wow. They are at their lowest in fifty years. Well, it would not be bad if I had
been short. Anyway, I was doing all of that stuff, and I graduated probably about
in the middle of the class in law school. I think it was somewhere in there. I was
not at the bottom of the class, for sure. I liked the tax courses, and I got an A in
corporate law and corporate finance. I got the book award, the Amzure book
they give you, in corporate law. I got an A in corporate finance. You do not get a
book award in that. I got A's and B's in all of the tax courses, and I did well in the
commercial courses.

P: What professors did you have that had the greatest influence on you in law

D: Lind [Dr. Stephen A. Lind, UF, Professor of Law, 1970-present] and Freeland [Dr.
James J. Freedland, UF, Professor of Law, 1957-1982], the two tax guys.
Another person who had a big impact on me was Gordon [Dr. Michael W.
Gordon, UF, Chesterfield Smith Professor of Law, 1968-1994]. He teaches
corporate law and corporate finance. He was a young man at the time. He is not
so young anymore. He also does a lot of international work. He goes to Mexico
and all that. He is in the book a lot, so I often see him. In fact, I dropped him a
line a couple of years ago. He is a really nice guy. He lives over by the golf
course in a little section on the other side of the law school unless he has moved.
Anyhow, it would be Stephens [Dr. Richard B. Stephens, UF, Professor of Law,
1949-1982], Lind, and Freeland, on the tax side and in general, and Gordon, in
corporate law and corporate finance, had the most impact on me.

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P: How did all of that impact your business career?

D: It led directly to my business career because when I graduated from law school, I
interviewed with the big eight CPA firms and tax firms. I chose Peat Marwick,
and I moved back to Jacksonville, and I joined, what at that time was called, Peat
Marwick Mitchell and Co-partners. Now, it is called KPMG. I joined them in
1973. I was one of the first people they ever hired who had a law degree. By the
way, when I was getting my MBA, I took my concentration in accounting, not
economics, even though I had a great interest in economics. So, I was able to
pass the CPA exam, which was also aided by the fact that I was teaching
accounting 101 and 102 when I was in law school. So, I joined Peat. I passed
the CPA exam. I passed the bar. I had a meteoric rise through Peat Marwick
from 1973-1978, and I was elected to the partnership in 1978. I would have
never been that successful had it not been for both my MBA and my law degree.
In particular, in those early years at Peat, my tax background and my corporate
law background was absolutely essential to my success. The combination of the
MBA and the law program was, in the mid-1970s, an avenue to very fast success
in Peat Marwick. I was elected to the partnership in 1978, under five years from
college, which some of the partners around there today tell me that it is still a
record. I was a partner in 1978 and 1979. In 1980, a group of international
partners asked me if I would come to Europe and be the head of the tax practice
in France and work my way up to the head of the tax practice for the continent
and have, basically, a European career. My wife's parents immigrated to the
United States from Spain. She is fluent in Spanish and is very European in
outlook. I thought, it would be fun to go to Europe, so I signed a five-year
rotation to go to Europe with Peat. Apparently, it got all the way to the board,
and they decided at the highest levels that they did not want me to go to Europe
but that they wanted me to stay in the United States. I was, by then, the head of
the tax practice of Peat in Jacksonville. They wanted me to wrap that up and go
to Houston, which was the monster tax practice for them. I was very
disappointed. I really had wanted to go to Europe. We had no children, and my
wife and I really had wanted to go to Europe. It was in that moment of
disappointment which, again, tells you how serendipitous life can be. It was in
that moment of disappointment that I received a call from John Franklin, a
senior partner, and Russell Reynolds in the Washington office, who said that he
had an opportunity of a lifetime and would I talk to him? I said, well, I am a
partner here, and I am reluctant to resign from the partnership. I have only been
a partner a couple of years. He said, I will just fly down to the airport in
Jacksonville. You meet me over there at that Holiday Inn, and just give me an
hour to talk to you. I said, okay, I will do that. I published a lot when I was at
Peat. I wrote articles for the Journal of Taxation and for the Journal of
Accounting and other things. By then, it was clear that I was a relatively
academic person. Not only did I practice and consult, but I wrote. Indeed, the
firm sponsored me to go to Washington, to the Supreme Court, and listen to the

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oral arguments of a Thorp power tool case, which was a very profound case in
commercial law. I came back and wrote a series of articles on Thorp power
tools for both the Journal of Accounting and the Journal of Taxation. I talked to
John Franklin out at the Holiday Inn, and he told me it was Marriott Corporation.
I had spent four months in Washington, D.C., in the navy, in 1968. I liked it, and
my wife liked it.

P: And you ate at the Hot Shoppes.

D: Right, I had eaten at the Hot Shoppes. I said, I love Washington. I did not know
anything much about the hotel business, but I knew a lot about the real estate
business, which underlies the hotel business. I went up and met Gary Wilson
and Bill Marriott. Gary was the CFO [Chief Financial Officer], and Bill Marriott
was the CEO [Chief Executive Officer]. I talked to them, on and off, for six
months, maybe nine months. During that period of time when I was chatting with
them, I decided I was going to resign from the partnership and join Marriott
Corporation. MaryLou was in total agreement with me with one minor
observation she made, and that was that the last three years that I was with Peat
from 1977 to 1980, I traveled 95 percent of the time. In fact, I had a suite in the
Holiday Inn in the condato in San Juan because Charter Company, which was
the big company in Jacksonville at the time, was in the process of attempting to
require the Commonwealth Oil Refining Company in Puerto Rico and, also the
Kerry Energy Company in New York. So, I had a suite at the Halldran House in
New York, and I had a suite in the Holiday Inn in the condato. I just traveled
constantly. In between there, I was out in Houston or in Monterey, California,
where their oil training company was. I was full-time on the Charter Company
and also the head of the tax department. I was really busy. MaryLou had a
dream to go to law school when she was in high school. Her dad had died when
she was in high school, so she went on to undergraduate school at Loyola but
had never gone to graduate school and had never gone to law school. When I
met her in high school, she had told me that she was going to go to
undergraduate school and then go to law school. She had even forgotten, and I
said, you told me when we first met in high school that you wanted, someday, to
go to law school. Why do you not realize that dream now? So she applied and
was accepted at the University of Florida. She went to law school from 1977 to
1980. That is how she happened to be in law school. She actually moved over
and rented a house with a couple of girls, almost directly opposite the law school
in that little neighborhood right down the street from the main entrance of the law
school. We saw each other the same amount of time because I was never home
anyhow. On her semester breaks, she would travel with me. If I was in San
Juan or New York or wherever when she took her semester breaks, we would
travel together. The rest of the time, we just lived apart. We had no children.
Her parents had immigrated into the United States, and I had grown up poor.
Our view of the world was that we were still at a period in our life where our job

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was to figure out how to get ahead. By now, in life, I was driven. I went from no
direction, in the broadest sense keeping my options open, to being driven to be
successful. I had made up my mind that I was going to be rich. It was that
simple. It was that crass. I did not clothe it in anything to soften it. It was just
simply, MaryLou and I had been poor all of my life, and I did not want to be poor
anymore. Rich is better than poor. When I graduated law school, I intended to
be rich. My definition has changed over the years, which it will do. There was no
question. I did not say, I am going to make this much money or that much
money. I did not put a number on it. I just simply said, I am going to go from
being poor to being rich. MaryLou thought that was a good idea, actually.

P: Can I interrupt you for a second before I forget? There are a couple of things
about law school I wanted to talk to you about. Would you describe what it was
like being in law school while you were there? For example, in 1971, there was
a big conflict on campus when blacks occupied Stephen O'Connell's office, and it
was kind of a turbulent time with anti-war protests. What was your reaction to all
of that?

D: I was totally non-political. I was totally disengaged. There were war protests. I
did not go out an protest against the war protesters. I did not go out and protest
the war because, at that time, I thought the war was probably still a good idea,
but I did not protest against them either. Upon reflection, I have always been
non-political. There had been protests in the early 1960s over at the College Inn,
a sit-down protest. While I was always sympathetic, because of an experience I
had when I was young, I was never active. When I was in law school, I was
absolutely non-political. I guess the correct expression is apolitical. I was
absolutely apolitical, and I mean that in the broadest sense--social, political way.

P: Okay. Get back to Marriott.

D: So, MaryLou went to law school. When she graduated in 1980, I broke the news
to her that we were not going to Europe but that we were moving to Washington.
She said, if we are not going to Europe, I may as well stay here because I have
to take the Florida bar. You mean I have to move to Washington and study for a
completely different bar? I said, yes, you do. We decided to go to Washington.
She agreed. We went up and moved into Bethesda, Maryland. I was hired at
Marriott as the vice president of tax. I reported directly in to Gary Wilson, who is
now the chairman of Northwest Airlines, and who is a friend as well as a
business colleague. MaryLou proceeded to study other bar exams and pass
them. It was a tough time to get a job in the early 1980s in Washington.

P: The Recession?

D: Yes. Nevertheless, there was a University of Florida graduate who was the head

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of a division at the Treasury Department. He got hold of her resume, saw she
had gone to the University of Florida, and called her up and gave her a job.
Remember, we had no children. She went to work for the Treasury department,
and she really wanted to practice in the commercial field. The best thing that
ever happened to her in law school is that she did one of those internships where
she went over to the prosecutors office in Jacksonville because she thought that
she wanted to be a criminal trial lawyer. I guess that has a romantic sound to it.
After about a week, she said, I am glad I did this because now I know I want to
do commercial law. I do not want to get involved in this business. She actually
had done one of those little intern programs. She thought she would like the
commercial law part. Her undergraduate degree was in accounting, so she had
a business background and a business bent. So, she went to work for the
Treasury Department, and I went to work for Marriott. I traveled a lot at that time.
She worked. We had no children. We had been in Washington for about two
years. I was putting in some long hours, and one Saturday, I was working. The
treasurer of Marriott Corporation was a fellow by the name of Al Checchi, and he
just ran for governor in California, and was Gary's partner in doing this LBO
[Leveraged Buy-Out]. He was a very famous businessman in the United States.
He was with the Bass Brothers in Texas after Marriott. At Marriott Corporation,
he worked for Gary [Wilson]. Gary had brought him to Marriott. He and I hit it off
really well. We were sitting around one Saturday, and he had three children. His
wife was also a lawyer. He said, I find it curious that you do not have children. I
said, MaryLou and I both came through life without much money, to put it mildly.
We both worked to get each other through school, and I used the GI Bill. We are
just getting launched in life. We have decided that we would like to be rich, so
we are sacrificing family in exchange for putting some money in the bank, making
some investments, and getting ahead in life. He said, that is a serious mistake.
He said, your priorities are wrong. You will turn out to be very unhappy if you
follow that course of action. What you really need to do is have a balanced life.
While on the one hand, you have been poor and you would like to be rich. On
the other hand, you do not have any children, and the greatest richness in life will
come from having a family. Here is a guy who is four years younger than me,
telling me this, but he was a very smart and very articulate guy. So, I said,
thanks for your advice, Al, and went back to my own business. Mind your own
business, and I will mind mine. He and I were good friends at the time, so I went
home and it must have been three or four days later when MaryLou and I were
out for dinner down in Washington. I said, I had an interesting conversation last
Saturday with Al Checchi. I told her about what he had said, and she said, he
has a point there. MaryLou is almost my age. She is only a year younger than
me. She said, before you know it, we will be forty years old, and we have not
started our family. Who knows if I can even start a family at my age. I said,
maybe we ought to change our view and compromise and balance family with
our lifestyle, and maybe we do not have to be as rich as we though we had to be.
So, we decided we were going to have children. We were very lucky because,

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instantaneously, we were able to have children. We did not have one miss.
Boom, she was pregnant. We had our first daughter, Meredyth Anne, nine
months later. MaryLou worked right up until the day we had the baby. She
worked right to the day. Then, she went back to work afterwards, and we had a
nanny come in. I said, if we have one, we ought to have another. She said, yes,
and I would like to have them close in age. She got pregnant again. Thinking
back to the fact that we had been married for about twelve years without children
and had not had an accident, realizing exactly how fertile she was, has been an
eye opener to us. We had kids on demand. I could tell you that. So, she got
pregnant again, and we had our second child, John Peter. They were born very
close to each other, about seventeen months apart. We had just waited for a
little bit of time in there. We were worried about her health and all that business,
but she was very strong. With our second child, she worked right up until the day
she had him. In fact, her water broke in the office, and she came home. We
went to the hospital, and we had the baby. She worked right up through the end.
She was going to go back to work, but we talked it over and said, I was raised in
an environment where I effectively did not have parents at home. I liked it, but
my sister was raised in that environment, and it did not work for her. You do not
know whether this is good or bad for our children until after the fact, and I do not
think we can afford to take the risk. She agreed, so she gave notice. She did not
go back to work. She became a full-time mom, which turned out to be fortunate
for a lot of reasons. My career kept advancing at Marriott. At the end of my first
year--again, all of the serendipity business--Gary Wilson asked me to take over
the controllership function, so I had tax and controllership. I put somebody in
charge of the tax department. The controller reported to me. I became kind of a
vice president of finance.

P: Chief Financial Officer?

D: No, the CFO asked me to do this. Gary Wilson is still there as the CFO.
Remember, Marriott is huge, so the CFO has everything reporting to him. I came
in a very narrow reporting relationship as the vice president of tax. At the end of
the first year or first eighteen months, he put me in charge of tax and control. I
became both the controller and the head of tax. Then, Al Checchi left and joined
the Bass Brothers in Texas, and I became in charge of finance in general. Then,
in 1985, Gary Wilson left and joined Disney as the CFO and executive vice
president, earmarked for the presidency at Disney. Gary recommended me as
CFO, Bill Marriott, and Fred Malek, who was running the hotel division at the
time, all said, we would [like] Dasburg to become the CFO So, I became the
CFO of Marriott in 1985. In capsule form, I graduated law school in 1973. I went
straight with Peat, became a partner with Peat in 1978, and was a partner for two
years. I left Peat in 1980 and joined Marriott. I started as VP of tax, went to VP
of tax and control, then went to VP of tax, control, and finance, and finally went to
CFO in 1985. I had been out of law school for about twelve years, and I was the

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CFO of Marriott Corporation. By my standards, I made a lot of money and a lot
of stock options. My view was that whatever my definition of rich was, I had
satisfied it. I had two kids who were terrific. My wife was not working. We lived
in a nice house. We switched neighborhoods to a bigger house out in Potomac,
Maryland. We were on top of the world. I thought I would probably spend the
rest of my life right there. I never had any expectations of rising to any level
higher than CFO of Marriott because I did not have any operating experience,
and that was a company that was operationally intense. I figured that my future
was CFO of Marriott, EVP [Executive Vice-president] of Marriott, and I was very
happy with that. That was a fine future with me. I really enjoyed Washington. In
fact, I had started traveling a little less and got the guys who worked for me
traveling a little more, like I had to when I was in their jobs. I had gone down to
the University of Georgetown and signed up with the professor who ran the
philosophy department there. I had a reading list, and I would go down once a
month and spend four hours with him. I paid him by the hour. Then, I would do
my reading and then, the next month, we would do the same thing. I was
beginning to self-educate myself, if you will, in the area of Western philosophy.
Everything was perfect. Life was just moving swimmingly. In 1987, Fred Malek
resigned from Marriott to take control of George Bush's campaign. Fred had
been politically active in the Republican Party.

P: He worked for Nixon as well.

D: He had worked for Nixon and had been politically active for a long time. When
he left, he had been the president of the lodging division and, instead of
promoting someone up inside the lodging division, Fred recommended me as the
head of lodging. Bill Marriott agreed, so they came to me one morning and said,
Fred is leaving, so you are now the president of the lodging division. So, I was
EVP at Marriott, president of the lodging division, and I had a very strong fellow
working for me named Bill Shaw. We made him CFO. Now we had the CFO,
and we had me as the president of the lodging division. Now, it was even better
than I thought it was ever going to be in my life. I had the experience of working
very closely with Bill Marriott, who was a terrific guy.

P: Did you ever get to meet J. Willard Marriott [founder of Marriott Corporation]?

D: Oh, yes. I knew him very well. He died, I think, in 1984. I had been there for
four years, and I used to go to his home all of the time to give him business
briefings and everything.

P: He had a farm or a ranch where he spent a lot of time?

D: He may have, but when I knew him, he was spending a lot of time in the suburbs
of Washington. I used to go to his house and give him business briefings, and I

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got to know him very well. They had a summer place in Winnipesaukee, New
Hampshire. I am sure they had a ranch or farm somewhere, but I do not think it
was overly relevant, notwithstanding the mythology. I knew him very well, and he
was inspirational. I would say that there were a number of meetings that I had
with him that were very lengthy where I got an eighty-year-old man's wisdom of
business, because he had been in businesses during his entire life. It was a very
important experience in my life.

P: Let me ask you something about Marriott. When he changed it quite
dramatically, he diversified a lot--buying Gino's and these corporations which
supply airlines and restaurants. Apparently, when you guys took over, you
started focusing back on the hotel business. Is that right?

D: No, actually, that is not right. Gary got there first. Then it was Al, and then it was
me. The three of us were together for a while, and then Gary and I were together
for a while, then Fred and I, and then me. Gary and Al focused on the hotel
business. When I came in, since I worked under Gary and since I was in the
financing, of course, I worked on financing the hotels. I led the effort to buy the
contract feeding division, the division that works here at Northwest headquarters.
That was a very small division. They had about $200 million of revenue at
Marriott Corporation in 1982. In the early 1980s, right around 1984-1985, I
bought a company called Service Systems from RJR, when they were shutting
down their diversification. That added about $1 billion worth of revenue in that
area to Marriott Corporation. It took us from a little tiny division of 200 million to a
division of a 1.2 billion. That made that a core business at Marriott Corporation.
Then around 1985-1986, Bill Marriott had always thought about buying this
company in California called Saga. It was a huge company with restaurant
divisions, and it also had about $2 billion of what we call contract food service, or
CFS, Contract Food Service is what you do in these hotels and what you do in
hospitals and what you do in schools.

P: Is that Host International?

D: I do not know what it is now because they have moved all of the stuff around. At
the time, it was not. At the time, it was CFS. Because of the way they have
divided up the company, it may now be outside, but I would have to go back and
refresh myself. Gary Wilson, I think, bought Host for Marriott. I think Host came
from Gary's inspiration. I bought Service Systems, and I bought this big, famous
company in California, Saga. Bill had always been interested in it, so I put the
deal together and we bought it. It took us about six months because it was the
first hostile acquisition Marriott ever did. We kept it kind of low key, but it was a
hostile. Nonetheless, we did the bear-hug. I brought in Merrill Lynch and
Waktell Lipkin. We really did the right thing, and we were successful. That
made that business, combined, about $3.5 billion, so it made it one of Marriott's

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major businesses. I had done all of that before Fred Malek resigned. By that
period of time, the diversification really consisted of the Contract Food Service
business and the hotel business. All of the restaurants had always been there
because the restaurants were a core business of Marriott's.

P: They started with that.

D: Right. It was Gary's suggestion and my suggestion that we sell all of the
restaurants off, but we never had any success in that because Bill and his
brother, Dick, liked the restaurant business, so they kept them. Ultimately, they
did sell them off, as you know. We narrowed our focus to hotels and Contract
Food Services. The big business I bought, Saga, was headquartered in Menlo
Park in California. There were a lot of adventuresome stories about how we did
it and how we peeled off the restaurants and who we brought in as a partner.
Really, there were two core Marriotts there. There are lots of adventuresome
stories about Saga. In fact, I gave a lecture over in the business school, back a
couple of deans ago. They invited me in and asked me to tell the story of how
we did the Saga acquisition. Then, we did Howard Johnson's, which we bought
for the hotel property.

When Fred Malek left, I became the president of the hotel division. I was really
honored by that promotion. I suppose I could say that I had hoped to be
successful in a financial environment, so CFO seemed to fit me and fit my
background--an MBA, a law degree with a concentration in business subjects,
seven years at Peat Marwick, and then, working my way through the finance
department of a big company. It seemed like CFO was a logical culmination of
all of those efforts. On the other hand, being named president of Marriott's
lodging group did not seem to track any logical preparatory activity. The fact of
the matter was that Fred left, and I had been so involved in developing hotels
and understanding the economics of hotels that Bill asked me to run the hotel
division. Bill liked my leadership style. I found it very difficult the first year to run
the hotel division. As much experience as I had taking over the dry dock in
Vietnam and having all of those employees and as much experience as I had in
business up to that date, I had never really been in the position where I basically
ran a retail operation where most of the people who worked for me actually
touched the public. I had to provide leadership and management and motivation
to people who actually dealt with the public everyday to earn their living. It was a
different experience. It was also a much more complicated job. We had lots of
hotels. They were all different. They were positioned in the market place
differently. I had a lot to learn. I spent the vast majority of my first year, as the
president of Marriott's lodging group, really learning. I was absorbing like a
sponge. Nevertheless, while that was going on, I could not lose sight of the fact
that I really had to run the division. I concluded that what was happening with

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lodging was that it was becoming totally segmented like other consumer
products, like a typical Proctor and Gamble line of products. Gary Wilson had
reached the same conclusion, perhaps not as radically as I had reached it, but
the same general conclusion. Under Gary's leadership, they had designed, from
scratch, the Courtyard, which turned out to be the product to compete with the
old highway side Holiday Inn. Marriott hotels was in the category with Sheraton
and Hilton and Hyatts and others. It seemed to me that there was probably an
infinite variety of hotel product and that, therefore, we ought not to limit ourselves
to only what exists but what might exist and that we ought to stay very alert to
what the small developers are doing. The hotel business is very interesting. An
awful lot of innovation in the hotel business is not at the majors. It is conducted
by the real estate developers who get an idea and build one, like it, modify it, and
end up with two and then, someday, end up with twelve. That is really how an
awful lot of the product in the late twentieth century, in lodging, has been
developed. I had run into a product called Residence Inn. I met the owners. It
was owned half by Holiday Inn and half by two private owners, Jack Debore and
Ralph Rufus. I went out and met Jack and Ralph in Wichita. They had really
invented Residence Inn, and it what was called at that time a long-term stay
product. It was marketed differently than most hotels in that it did not have a real
reservation system, but it had a sales force. You establish a Residence Inn in
the market where your sales force could call on the big companies where they
had employees who were staying for a week or two for training or what have you
and did not want to pay the single overnight rates of a hotel. By eliminating the
reservation] system and the big meeting rooms, and all of that, you could put
more space in the room and make the room more comfortable if you were going
to stay there for a long term. Hence, the view that it was a long term stay
product. The economics would also be different. You eliminated all of the
overhead, and you eliminated the reservation] systems and all that. You could
give them more space, in exchange for those two, and you could give them a
lower rate because you did not have the overhead of generate new customers
every twenty-four hours. I liked the concept. There were not a whole lot of them,
but there were some of them around. I had seen them in the mid-1980s, when I
was the CFO. Incidentally, the CFO at Marriott ran all hotel development. That
is how you became intimately aware and knowledgeable in the hotel business,
and it is also why it was not too radical of an idea to take the CFO at Marriott and
turn him into the head of the hotel business. You already spent most of your time
developing, financing, selling, and studying hotels anyhow.

P: Let me follow up on that. How would you pick a location for a hotel? What

D: There are a lot of ways of doing it. Using a Courtyard as an illustration, the way
you picked the site for a Courtyard by having your real estate division going out
and finding all of the Holiday Inns. Since they were getting old, you would just

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put a Courtyard in the nearest intersection next to an old Holiday Inn. That was
the first thing we did. There was no other criteria other than the Holiday Inn
criteria. It is like a Burger King going out and finding where a McDonalds is and
locating it catty-cornered, if they can.

P: So they had already found a good location?

D: They had already done the studies. Marriott got started a little late behind some
of the other hotel companies, and we began by going into the markets the other
hotel companies had entered. Later on, as we got larger than they did, then we
had to become more innovative. Then, you do have a set of criteria that you use.
What happens then is that it gets reversed on you. For example, through some
friends, I was told about Warsaw, Poland, and how great Poland was going to be
as a commercial market and that it would probably be the first eastern European
country that would free itself from the Soviet Union. We went over and studied it,
and sure enough, they had a little vibrant economy developing. All kinds of
western business men were in and out, and the only hotels they had there were
developed and run by Polish companies. They had some American names
there, but they were pure franchises. Nobody knew how to run a hotel, and they
were terrible. We went over, and we developed the Marriott hotel from scratch,
operated by us with our own employees. We brought Polish citizens to the
United States, put them in all of our hotels up and down the east coast, trained
them, and then sent them back. We had Polish citizens who were trained in how
to run a hotel in the U.S. who were back in that hotel. We ended up with the
most successful hotel in eastern Europe and, for five years, the most profitable
hotel in the entire Marriott system. There are lots of ways that these things get
discovered. Often, what happens to you is that somebody who is in the real
estate business who controls a piece of real estate comes to Marriott Corporation
and says, I control the following piece of real estate in the following city, come
down and look at it. We will look at it and find out if it is suitable for our hotel and
its market. We will study the market to see if the market has too much supply or
not enough supply, and then we develop hotels.

P: Did you make the decision to build the Marriott Marquis in New York?

D: That was made by Gary Wilson.

P: At the time, that was a pretty big gamble.

D: That was a bold decision. It was John Portman, out of Atlanta, who designed it
and controlled the real estate. He brought it to Marriott, and then Marriott
developed it. Gary Wilson was the CFO at the time and developed that. I did a
lot of them, but I did not do that one.

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P: That really helped rebuild that section of the city.

D: The real re-development of Times Square started with that hotel, and Gary
Wilson had a lot of vision to do that. My vision was Poland. His vision was
Times Square. My hotel made a lot more money than his.

P: The rooms at the Marquis would have to be pretty high to pay for the cost to build

D: It was incredibly costly.

P: What about the Fairfield Inns?

D: The Fairfield Inns were internally developed by a fellow who worked for me called
Tom Kern. He went down a segment to the cheap segment. We ended up with
the Fairfields, with the Courtyards, and with Marriott. Then, Marriott got divided
into the Marriott Resorts, which was one type of hotel, and the Marriott hotels,
which is really what we normally think of if we are business persons traveling in
another city. We had also, ultimately, bought Residence Inn from Jack Debore
and Ralph Rufus. If Holiday Inn knew I was buying their interests, since Holiday
Inn owned half of it, they would not have sold their interests, and we would not
have been able to develop the brand. They had a provision in their contract with
Holiday Inn that either they could make an offer to Holiday Inn to buy Holiday
Inn's offer, and then, Holiday Inn either had to sell at that price or buy at that
price. Some people call this the Texas draw provision. I got them to make an
offer to Holiday Inn to buy their piece, guessing that Holiday Inn was not going to
be able to, instead, buy Ralph's and Jack's piece because Holiday Inn had just
gone through and LBO, and they were short on cash. Sure enough, they said
they were not going to exercise their right to buy Ralph's and Jack's piece and
ended up, then, having to agree to sell to Ralph and Jack. Ralph and Jack
bought, and then I bought the whole thing from them. There are always things
going on that do not first appear to be as straightforward as they are. We ended
up with Residence Inn that way. Then, we tried the suite business, and we rolled
out some suites. We have some international product, and we kept developing it.
My principle contribution was a lot like the dry dock in Vietnam. I took what was
mostly a one-at-a-time process and turned it into an assembly line, put a huge
development division and a huge finance division together. It was a process in
which the developer would bring us a site, the real estate division would approve
it, the finance people would finance it. Then, I had an internal, vertically-
developed construction department overseeing all of the construction, and we
had all of our own architects. We would design the product, and then we would
build it. For three years in a row, we were the largest real estate developer in the
United States, in aggregate, because we just simply ran an assembly line. We
built more properties. I concluded the hotel business was ultimately going to be

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a market-share gain for your brand. Therefore, you needed to saturate the
market with as much of your brand as possible. If you wanted to control your
brand tightly, you could not do it with franchising. You could have 25 percent
franchising, but you could not have 50 percent franchising because you lost
control of your product.

P: Did you buy back a lot of franchises?

D: We bought back some franchises. We issued some new ones to some different
people, but we always kept the percentage of franchising small and the
percentage of company-operated large. We financed them with third parties, like
insurance companies, banks, and others.

P: So, you did a lot of limited partnerships?

D: Lots of limited partnerships. When the tax law changed, we did limited
partnerships almost daily. Incidentally, my University of Florida law school tax
training turned out to be very important. There was a fellow called Car
Ferguson who had written, with Freeland and Stephens, one of the books about
estate and gift tax that is used in the tax programs at law schools. Car had been
in the Treasury Department in the tax area. He went to work with a major firm in
New York, and I was put in contact with him. I worked with him and, by
coincidence, he had hired a University of Florida law school graduate who had
majored in tax and who was a schoolmate of mine in law school, named Mike
Rollerson. Mike Rollerson worked at the same law firm, directly for Car
Ferguson. When we put together the first depreciation strip, we did it with Car
Ferguson, Mike Rollerson, and I. I moved to New York, and we put the whole
thing together there. Then, we syndicated the first round of hotels by stripping
out and selling off the depreciation.

P: You could probably write off ten to one?

D: Even more than that. It was trickier than that. In theory, a depreciation strip is
illegal, under the tax law. You had to put something, pizzazz, with the
depreciation strip. We figured out how to do that. Ferguson was the law partner,
and Rollerson was there. Rollerson and I talk all of the time. In fact, in the
recent fund raising for our 1973 class, Rollerson and I helped to head up the fund
raising for our class. I would like to point out, of that group, we raised more
money than any other law class. They go every five years or whatever it is or
however long they separate them. We are number one. Rollerson and I made
sure we were number one.

P: That is because you did so many good tax shelters.

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D: Yes, we did so many tax shelters that I could afford to be number one. You go
back and check with Becky Hoover. We won. In fact, I want to call her right now
to make sure we got number one. I like to win. I want to make sure our class
won. We really did well. There was one guy for whom I want to make sure he
sent in his money. This reminds me. I do not have time to follow up after this, so
I will do it now.

P: Another thing I was going to ask you, which was interesting to me, is that in the
lower end of the chain, like Fairfield, you only have to have around 55 percent
occupancy to make a profit, and the others are like 65 percent?

D: No, that is not true either.

P: By cutting the frills?

D: Yes. You cut the investment. I think, the break-even for Fairfield has got to be
higher than 55 percent. I do not think 55 percent would do it for Fairfield. What
happens is that as the cost of building the room goes down, the rate goes down
because your competitor charges a lower rate. You still get squeezed. It is not
as if you can build a cheap room and charge a high rate. In fact, my rule of
thumb in business is that in the final analysis, all of the margins get squeezed in
any particular product line to within a point of each other. The fact of the matter
is that the market is so efficient that over time, the cost of production and the
price that is charged is sufficiently narrowed that the margin is appropriate for the
risk-adjusted return for the capital you have to put in the business. Very rarely,
on a sustained period of time, will you achieve a greater margin than what is
appropriate for the industry. What is appropriate for the industry is what you
statistically ascertain.

P: So, what makes the difference?

D: What really happens is that in the final analysis, there is very little difference. It is
that if someone can only afford $40 a night, and you want to satisfy their product
need, you have to find a product that costs sufficiently less to deliver to them that
when you are done, even at $40 a night, you have a margin sufficient to earn
return on your capital appropriate to the risk. The risk of a Fairfield is much lower
than the risk of a convention hotel in Palm Springs, so on a convention hotel in
Palm Springs, you have to earn a much higher return on your equity capital in
order to justify taking that risk. If you had a pool of ten Fairfield Inns, you have
minimized your risk. First of all, you have geographic diversity. Also, as a
practical matter, the return on capital can be less because it is simpler to market.
It is a simpler product to understand. It is a simpler product to finance. That is
really the difference.

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P: Discuss why you left Marriott and went to Northwestern.

D: Right. In 1988, on December 9, my first daughter was killed on a school bus
accident coming home from first grade. The short of it is that while my wife and I
tried to make a go of it, the fact of the matter was that there were just simply too
many reminders of her death and our life together and all of that. By the end of
the year, I just concluded that I needed a new venue. I needed to move, and I
left. It is that simple. I thought I could make it, but I could not. She was killed on
the intersection of the street where our church was, and it was practically
speaking the only road between my house and the office. Every single day I
was in town, I drove exactly, precisely in the spot she died at. That was just too
much. We also made a mistake. The church owned a cemetery and, bizarre as
it may seem, it was at the end of the block where my house was. It was filled,
except somebody had one site left. They gave us that site, in dealing with our
grief. We thought they were doing us a favor, so we buried my daughter at the
end of our block. Every time we went for a walk or a bicycle ride, we went by the
cemetery where our daughter was buried. Every time, I went to work, I went by
the spot she was killed. Every time I went to church, I drove over the spot she
was killed. Everybody deals with these things a little differently, of course, which
is why nine out of ten marriages, I understand, end in divorce. The wife deals
with it in one way, and the husband deals with it in another. There is no right or
wrong. In marriage, you can compromise almost anything, but it is hard to
compromise grief that comes from the death of a child. MaryLou was holding on.
Let us say that I would go out of town on a Monday morning, and I would come
back Friday. I would come home, and the parents of my daughter's best friends,
and my daughter's best friends would be at our house, having a barbecue. My
wife was holding on, and I wanted to get some distance between us. Finally, at
the end of the year, I had to leave. It just so happens, purely by coincidence, that
Checchi, Wilson, and Malek had been doing this LBO, and all the executives who
were here [Northwestern] had resigned. They were short of executives, and they
asked me to come over. I said, I am going through a period in my life where I
need to straighten out a few things. I have lost my child. I will not commit long
term. I will commit to come over there for three years, and I will help you re-
finance stuff. I do not want to be the CEO or anything like that. Let somebody
else do all that. I do not have the presence of mind to do that, but I can come in
and CFO a little bit and do those kind of things. That is when I came over here. I
commuted for about nine months. I bought a house, did some renovations, and
moved. By then, oddly enough, at the age of forty-seven, my wife was able to
have another child. We ended up with another daughter. I have a little girl
today, who is eight years old, as well as my son, who is fourteen. My wife and
the family moved here. Then, I moved my mom and dad here. Then, I moved
my sister and brother-in-law here. We re-settled, of all places for a guy from
Miami, Florida, in Minneapolis. I have kind of hung on, on two-year increments.

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Every couple of years, I sit down with Gary and say, I was not coming here for a
long period of time anyhow, and I am kind of ready for a change. I would not
mind getting back into the hotel business. I have a lot of opportunities, a lot of
offers. I think I am going to go back in the hotel business or some other business
that I have been invited to join. Gary always talks me out of it, and I keep saying,
two more years. Now, I have been here nine years and, in the last month, he
said, you are fifty-six years old. You like the industry anyhow. You are already
settled here. Your children are in school here. Let us quit the two-year business.
Why do you not just commit for the long term, and we will figure out what that
means as we go along. Just yesterday, we announced that we had reached an
agreement that I am going to stay for the foreseeable future. That is the first time
since my daughter's death that I was willing to make a commitment. It took this
long, from my daughter's death until now, for me to say, okay, I am permanent. I
do not know what that means. What it really means is that I have crossed
something. I have crossed some threshold of concern about attaching.

P: How different is the airline business from the hotel business?

D: It is similar in some ways. For example, they are people-intensive, they are
capital-intensive, and the distribution system for the product is roughly the same.
Those are big things, and they are similar in that vein. They are different in the
sense that the asset moves, and that is not a superficial difference. It is a very
profound difference because the pool of assets is constantly being re-shuffled
into market places and re-sized. It makes it a very high-speed business. The
hotel business, compared to the airline business, is relatively plodding. The
airline business must be one of the fastest businesses in the world. It is hard to
keep pace with.

P: Because it is constantly changing.

D: It is also very numeric. It is hard to be a senior executive in the airline business
and not be numeric. You have to have a real sensitivity for numbers.

P: Talk about how you turned the airline around.
D: I did not turn the airline around, that is what a lot of people like to say. When you
are CEO, when something goes wrong, it is your fault. If something goes right,
you get the benefit for it. Clearly, when it goes wrong, I did not do it, and when it
gets good, I did not do it either. I provide some overarching leadership, but there
are a lot of intervening forces and things. What happened in the early 1990s is
that we faced a convergence of difficult things. We had a recession. We had a
Mid-East war. The Mid-East war affected this business more than most in that it
drove up our fuel prices, so our cost of production went up 16 percent of our cost
in a normal year as fuel. Obviously, if it goes up to $1.50/gallon for jet fuel, it
becomes 30 percent of your cost, or 25 percent or something, and bankrupts

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you. Our fuel cost was sky-rocketing. Because of the threat of terrorism, our
customer base had fallen off. In fact, in Japan, it almost ceased to exist. We had
an overall recession in the United States. An LBO had been done, and most
LBOs are done with short-term debt, which meant that debt was coming due
when there was no source of cash for it. It was my job to convince the labor
leaders to convince their members to provide what is known as concessions,
which means that they would voluntarily take a reduction in their pay. I have
done that once, and I do not ever want to do that again in my life. That is a hard
sell. It was very difficult, but I had some credibility. I think my credibility came
more from the fact that I was new to the industry than from anything else. They
could not say, this bum has tried to do this before. I seemed like a nice guy, so
they believed me.

P: Would you go as far as to say that the corporate restructuring saved you from

D: Oh, yes. The corporate restructuring did save us from bankruptcy. We had
some very good labor leaders. I worked closely with them. We went into the
hangers. We went into the ready rooms. Ultimately, our employees, or their
members, agreed to make concessions of $300 million a year. Combine that
with the banks being willing to provide re-financing. They did not reduce our
debt, but they stretched it. We also worked with our vendors to stretch out
aircraft and engine acquisitions, thus working with others everybody came
together. My job was to provide the leadership, to bring everybody together, so
that we could sign the documents and stay out of chapter eleven. We were,
literally, within an hour of filing chapter eleven. The papers were drawn. The dip
loan was in place. The lawyers were in the hotel in Wilmington, right across from
the courthouse. We were on the judge's docket that morning at nine o'clock to
walk in and file our papers and go bankrupt. The pilots agreed to the concession
package about three or four o'clock in the morning at a marathon negotiating
session at my house. There is a famous story about Chris Clouser, who was
over there and fell asleep in my bed. My wife came in around eleven o'clock,
thought it was me, and started changed to go to bed. We had been negotiating
for about forty-eight hours. She got over there and realized it was Chris. People
were sleeping all over in my houses. They were on couches. They were in
bedrooms. They were everywhere, so it was an interesting experience. In any
event, we avoided bankruptcy that morning and from then on, it was all uphill.
We were able to rebuild the airline. We were able to rebuild its balance sheet,
straighten out our fleet, and really produce a good product. The airline turned

P: But you had to make some layoffs as well, did you not?

D: A tremendous number of layoffs. In the end of 1992 and the first of 1993, we laid

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off thousands of people, all of whom were ultimately hired back if they had not
found another job. Since then, we have hired 10,000 people. We laid off about
2,000 or 3,000 people back then and in the intervening years--without counting
for retirements or anything--we have net 10,000 more people now in the payroll
than we had back then.

P: Talk about some key issues for you. I have read on several occasions that your
safety record is highly rated. What did you do specifically to get those kind of
high evaluations?

D: There, again, I did not do a whole lot. Northwest Airlines has always had a
reputation for being a very safe airline with very high operating standards. It
happens also to have a reputation for not being a very good customer service
airline. The good news is that the people here really knew how to lead, run, and
manage a safe airline with operating efficiency. The bad news is that did not
know anything about customers. What we have tried to do is hold on to the plus,
which is safety, and then try to develop a customer service oriented behavior. I
think we have had some success in changing the behavior and in producing a
much better product than for what the airline had been historically known. We
were in labor negotiations for the last two years, so we have had a relapse. I can
assure you that the minute the last contract is signed, this airline will probably be,
if not the best operating airline in the world, certainly one of the best operating
airlines in the world. Everybody here knows how to do that once we have labor
peace. That is, incidentally, another big difference between the hotel business
and the airline business. Most of the hotel business is not unionized. The airline
business is, so you have a third force that you have to deal with. It is not only
your employees and you trying to chat and make something work. It is the
employees and you and the union.

P: Actually, several different unions, I guess.

D: In our case, seven majors. The unions are terrific to work with when you are in
labor peace, but when you are dealing with contracts, they drive a wedge
between you and your employee. It becomes a very difficult third force that you
have to contend with. If they did not drive the wedge, they could not call a strike.
If they cannot call a strike, they do not have the ultimate weapon. You can
understand, logically, why they have to drive that wedge, but it is unfortunate. In
any event, that is a big difference between the hotel business and the airline
business. As to safety, this airline has always had a focus on safety. All that we
have done is to continue to build on that. I have a chief safety officer who reports
directly to me. We are the first airline to have a chief safety officer reporting
directly into the CEO. He oversees all of our safety programs. That deals with
employee work-site safety, environmental safety, as well as the aircraft
operations safety.

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P: Did you change your inspection of airplanes? Hire more maintenance workers?

D: Yes, we constantly focus in that area. We started by hiring a guy to report
directly to me, as a senior executive, to oversee this area. Yes, we have more
inspectors. We have everything.

P: How about pilot training? I know you have your own training facility.

D: Right. If you could improve on it, you would. Sometimes, we would discover
things we could improve, but we would have done that. I cannot take any credit
for that.

P: How do you deal with on-time performance, baggage handling, and the many
complaints that the public has?

D: First of all, completion factor and on-time performance go together. You have to
have a high level of completion factor. Modern large airlines run a hub and
spoke system. In the way of a hub and spoke systems, a bank of aircraft come
in, and then a bank of aircraft have to go out. If you do not have everything
operating properly with your line maintenance and everything else that you have
to do, the bank will come in, but they will mismatch when they are supposed to
go out. They start getting delayed. Once you have one delay, it ripples through
your whole system because they constantly bank in and bank out throughout
your system. We came up with a number of ways of improving all of this process
in the 1990s. We implemented them and, in 1993, 1994, 1995, and the first half
of 1996, we had the highest on-time performance of any airline in the United
States, other than Southwest, which was a very small airline at the time. Of the
big airlines, nobody came close to us, in terms of consistency. When we had our
labor problems, what they do is they sabotage you. The underlying systems are
fine, but we have been sabotaged for two years.

P: Due to slow downs?

D: Yes. Work to rule and all of that. After the strike in September, everybody went
back to work. In October, we were third. In November, we were second. Those
are published numbers. Right now in December, because we do informal swaps
before we send it into the DOT for them to publish it, we are first. As soon as we
quit being sabotaged, all of the systems work, and we are back running on time.
Our completion factor is high. We know how to do that. We know how to run an
airline really well, as long as somebody is not intentionally disrupting it. We still
have some union contracts to go. We happen to be in an interim period of time
here. It is kind of like the eye of the hurricane. We did the first wave [pilots]. We
have had all of that, including the strike. Now, we are in the eye. Now, we will

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have the next wave. I am hoping that there are not any more strikes out there.
We did not want that strike. We know the pilots did not want it. It is my view that
there were some labor leaders in the pilots union who did want it, and they ended
up with it. The end result is that we finally settled it with the help of the White

P: While we are on that subject, what was the strike about other than just salaries
and benefits?

D: My view is that the strike was about the pilots showing they could strike, to put it
in its bluntest, crudest form, because they ended up settling for less than I was
willing to pay them. What is curious is that I had already agreed with the
International Association Machinists [IAM] to give them four-year raises of 4
percent, 4 percent, 3 percent, 3 percent. The pilots knew I was willing to settle
for that amount. They kept their numbers at numbers that were virtually
impossible and would have bankrupted the airline. They never came down.
They took a strike. When the White House came in, the White House intervened
and ended up forcing them to settle at three, three, three, three. They settled at
less than they knew I was prepared to settle at because I already at four, four,
three, three. It was a strike for the sake of striking.

P: Did you do the negotiations?

D: I did part of them. I was not at the negotiating table because we never got into a
dynamic where going to the negotiating table made sense for me. In the case of
the IAM, I went to the negotiating table. In 1993, with the pilots, I went to the
negotiating table.

P: Did you hope that Clinton would intervene, as he did with the American pilot

D: Yes, I did. I had hoped he would intervene, but he did not because he was
concerned that he did not want the airline industry to evolve to a model that the
railroad industry is on. The Railroad Labor Act has you negotiate and then
mediate, under the auspices of the NNB and then, you get a board member of
the NNB. After you cannot agree, you get a thirty-day cooling-off period, which is
a misnomer. It is really a heating-up period. At the end of the thirty-day cooling-
off period, you have a right to strike. When you strike, because it is
transportation, the President can appoint a Presidential Emergency Board called
a PEB. The PEB comes in and brings the sides to resolution. In point of fact, in
the railroad industry, you go through that whole process, including a PEB. In the
airline industry, there have not been PEBs American Airlines got a PEB. This
was a very interventionist White House, so they did not hesitate to provide a PEB
[for American Airlines]. Only afterwards did they realize that they might have

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been establishing a precedent for all airlines which, of course, they did. We were
the next on the block. We did our negotiation. Probably, in their heart of hearts,
our pilots thought there would be a PEB. The fact of the matter is that they
struck, and there was not a PEB, and the White House said there would not be
one. Ultimately, because we were not providing any services to the Dakotas
during the strike, Tom Dashle [U.S. Senator, D-South Dakota] and others got up
in arms and told the White House that they needed to do something. The
President decided rather than appointing a PEB, which would then have been
two in twenty-four months, to send Bruce Lindsey [Legal Advisor to President
Clinton] in here. That is the equivalent of having the President sit at the table.
Bruce forced the settlement, and he forced a settlement beyond the terms we
were willing to pay, which is kind of bizarre.

P: I read in one case where he threatened the pilots that if they did not make a deal,
Clinton would act.

D: I do not want to get into the details, but I can tell you he was very effective.

P: Did Rodney Slater [Secretary of Transportation] play any part?

D: Some part.

P: Who wins a strike like this?

D: No one wins a strike, in my opinion. I think labor would tell you that they have to
strike once in a while to demonstrate that they can and that they win in an
intangible way then. That turns into a practical result. My conclusion is that the
pie is bigger if you do not strike. What I mean by that is that you drive away
enough customers, and you make enough customers angry with a strike, that the
amount you have left to share as a company over the next decade or two is
reflective of the fact that you had a strike and ran off some of your best
customers. Therefore, I think everybody is a loser because the pie is smaller. A
laborer would tell you that they believe that the share of the smaller pie they get
is bigger, cumulatively, than a share of the bigger pie they would get if they did
not strike. Pilots have actually told me this. I am not sure they actually believe
that. They are rationalizing the strike, I think.

P: Would you have saved money, had you agreed to their original demands rather
than go through a strike?

D: The demands they struck over at would have bankrupted Northwest Airlines.
There was no way we could have agreed and, incidentally, I believe they knew
that we could not agree to them. I think they struck for the sake of striking, of
course, that is my own opinion.

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P: What did it cost the airlines, in terms of money and lost revenue?

D: Cumulatively, because you not only lose revenue but you have costs you would
not ordinarily have, our public estimate is about $600 million.

P: Have you gotten your customers back?

D: No.

P: Will you?

D: Yes, but over a long period of time. The pie, cumulatively, is smaller.

P: What about the merger with Continental?

D: Well, we are not merging.

P: You are just going to do code sharing?

D: We bought a controlling interest in them. That is defensive. In other words, we
did not want anyone else to be able to buy a controlling interest in Continental, so
we bought it defensively. At this point in time, we do not intend to merge. What
we intend to do is totally link all of our marketing network so, from a customer's
perspective, we look like one company. What we intend to do is market
ourselves as one company: code share, frequent traveler programs, clubs, all of
that business.

P: Will they keep their name?

D: They will keep their name. We will keep our name.
P: Why has the government not approved this yet?

D: The government, actually, has done more than that. They are suing us. The
government's position is that the two of us [Northwestern] are two big and ought
not to be able to combine, in an ownership sense. They have not prevented the
alliance and all of that stuff, but they do not want us to own the 51 percent.

P: So, you could code share without actually purchasing the majority of the stock in

D: Yes. We could have had an alliance with them without purchasing that block of
stock. The problem is then the block of stock was in the hands of one investment
partnership and could have found its way in to the hands of Delta, for example.

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We bought it as a defense. Now, one would argue, well, if the Justice
Department will not let Northwest buy it, they will not let Delta buy it because
Delta is twice the size of Northwest. The answer is that may be true today, but it
may not be true in the Justice Department in the next President. So, I cannot
take that chance. What did happen is the Justice Department did not sue to
enjoin us, which they could have done. They could have sued to enjoin us. It is
our lawyers opinion that they would have lost an injunctive suit. They knew that
and, because they are right in the middle of this Microsoft litigation, they did not
want to find themselves in the position because enjoining Northwest-Continental
is front-page news. If they had attempted to enjoin Northwest-Continental, front-
page news, and lost--and that is a quick hearing, that would be done in five
weeks--in the middle of this Microsoft case, they would have looked foolish. It
would have weakened them. It would have made them look weak. From a PR
[public relations] point of view, they have decided not to enjoin us. PR, that is our
general assessment. So, they sued us and said, well, we are going to litigate, so
you cannot own the shares. Well, I do not care about the litigation because it will
take them two or three years and, by then, I will have all of my alliances done.
By then, there will be another administration, and we will find out what the
landscape looks like.

P: Could they not make you divest some of it?

D: Sure, they could. They could make us divest, but they have to win the lawsuit.
That is three years from now. I will take my chances.

P: Talk about your alliance with KLM [Royal Dutch Airlines]. How did that come

D: It came about before I was here. When they were putting together the LBO, they
were looking for a partner that was also willing to invest in the LBO, and KLM
was willing to do that. So, KLM made an investment in Northwest Airlines.
These alliances are awfully difficult. I am still learning. I feel, in some respects,
like I did the first year I was the president of the lodging company. International
business is different than intra-national business. The folkways and morays of
everybody are different. Their business habits are different. When they speak
English, they speak it, but they do not understand it like we do being born and
raised here. Almost all Dutch speak English, but you have to understand it. I
had to learn. It took me years to realize it. I thought we were communicating,
but we were not. Now, we have figured out how to be a little more careful about
our communication.

P: So, there were some problems with this?

D: There were problems for years, but they are all worked out now. I am on the

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board of KLM. The CEO of KLM is on our board. He and I talk all of the time.
We have become good personal friends. In fact, my wife is going over there in
April for tulips and everything. His wife and my wife are getting to know each
other, and it is a fine relationship. Our business are working very well together.

P: I think it was Fortune Magazine that said that this alliance really transformed the
airline industry.

D: I think that is probably a fair assessment now, looking at it now. Prior to the
KLM-Northwest alliance, I think there was a view that an alliance was theoretical.
It was possible, but it probably did not yield any real benefits, and it was
probably more trouble than it was worth. What everyone has discovered is that
these alliances really do work, and we feed their system, and they feed our
system. We appear bigger to our customers because our customers see them
as part of us. They appear bigger to their customers because their customers
see us as part of them. As a consequence, the whole system seems larger. It is
that theory behind what we are trying to do with Continental, because Continental
is half the size of American, Delta or United. We are half the size of American,
Delta, or United. If we can get our customers to see us as one, we are the same
size as American, Delta, and United. We will have taken the big three and
converted them to a big four, and that is what is behind this.

P: Plus, that gives you a much broader route system.

D: Yes, that is the point. From a customer's perspective, we are as big as they are.
Whether you are a Continental customer flying into our market or a Northwest
customer flying into a Continental market, if you see us as the same, if our
frequent traveler programs are the same, if all of the paperwork is the same, if
the computer reservation systems all work seamlessly, and you see us as one
system. Then all of a sudden, we are twice as big as we would have been
independently, to our customer. The only reason you would form an alliance is
from a customer's standpoint. You do not do it from an internal point of view.

P: Is there a lot of cost savings?

D: No. There are not much cost savings in alliances. You get some economies of
scale. I mean, if you decide that you are going to serve the same wine or if you
decide you are going to use the same napkins, you get cost savings. You get
economies of scale, but we are all big enough that you do not get any more
economies of scale on things like fuel. If we could ever get around to making our
fleets common, you probably could get a cost savings in air frames and engines,
but we are decades and decades away from uniformly acquiring the same
aircraft. Maybe, within the next ten years, we will pick one that we could all buy,
but we are a ways away from beginning to develop a common fleet. If you could

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ever get to the point where you had a common fleet, it would be fantastic.

P: Why would Delta close down their Gainesville operation? They were making a
profit, and pulled out. What is going to happen at these mid-range airports?

D: If you can make a profit, you will not pull out. When you say they are making a
profit, I would have to know what that means.

P: They said they were making a profit but they could make more money putting
their planes elsewhere.

D: If they were making a profit and they were short of aircraft, so they move the
aircraft to somewhere where they could make more profit, in business, you are
not going to leave profit on the table. So, that means it is just a matter of time
until they have the aircraft to put back in the market. By definition, if it was
profitable, there is only one reason why they would have pulled out of the
Gainesville market and put their aircraft in a different market. That is because
they do not have another aircraft, but aircraft can be acquired. So, if they can
buy an aircraft and run it profitably in Gainesville, they should do that unless
there is a misunderstanding of what profit means.

P: So, what is going to happen is that the major airlines are going to fly hubs and,
then, the smaller airports are going to be feeder airlines.

D: Yes. Regional carriers, and that is what we have done. The regional carriers,
incidentally, are all going to fly jets. Our regional carrier up here, Masaba, is
going to end up, in twenty-four months, with thirty-six jets.

P: Do you own that company?

D: We own a big piece of it.

P: So, they fly according to your schedule? They connect to make the flights to
Detroit or wherever?

D: Right.

P: What about airline food? What is the future of airline food?

D: Well, people do not make a decision to fly or not fly based on food. Therefore, it
will always be, more or less, a commodity. In international flying, the study of the
customer indicates that it matters. So, in international flying, you have a
tendency to invest in it. In domestic flying, nobody is going to make a decision of
which airline to fly over what food they serve.

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P: People want lower prices.

D: As opposed to food.

P: And smaller seats and less leg room?

D: Well, what they want is lower prices. If you did a conjoint study, you would find
out that they would sacrifice almost anything for price. Therefore, you end up
with smaller seats and less food in exchange for lower prices.

P: Is the service on airlines deteriorating?

D: It is not deteriorating from what it was in the 1980s. It is much less than it was
when it was regulated because when it was regulated, you had an
institutionalized profit. On the other hand, when it was regulated, while the levels
of service were higher in terms of onboard service, the levels of service to
markets were lower. Probably, half the markets that are served today were not
served when the industry was regulated.

P: Now, you have more options.

D: Oh, infinitely more.

P: One thing that really intrigued me as I was doing research for this interview is the
extraordinary amount of time and money you devote to humanitarian causes--
Habitat for Humanity and that sort of thing. Would you comment on that a little

D: Yes. There is a debate that has been raging for decades regarding the
stakeholder issue. That is, is it the responsibility of management to satisfy one
stakeholder, namely, the equity stakeholder, or is the responsibility of
management to balance stakeholders, that is, to take into consideration
employees, community, equity, or whatever you view the stakeholding group to
be. We, at Northwest, have concluded, notwithstanding the literature on the
subject that would argue for the shareholder group, that it is important to balance
stakeholders. Therefore, you have to play an active role in your community, and
we try to do that. That is the precise rationale about that, and it has a tendency
to be, probably, CEO-specific. If a CEO believes in balancing stakeholder
interests, they get balanced. If a CEO does not, they will not. If you study
finance, there are a number of books written by some very, very smart people
with lots of correlations in them that indicate that the enterprises that satisfy
shareholders first and almost exclusively, if not exclusively, are the most
successful. I know the people who have written some of those books. I know

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Peter Kantas well, who wrote a book on shareholder value. My view is that the
evidence is not compelling that a single focus on one stakeholder group, namely
shareholders, is the most successful way to run an enterprise. Of course, you
could stipulate out the problem by saying that what they really mean is that you
have to serve all stakeholders and if you serve them all right and if you make all
the value-maximizing decisions, you end up maximizing shareholder value. That
is kind of an end run against the real question. The real question is do you or do
you not really balance stakeholders? My answer, for me, is that you do. Since I
am the CEO, we do.

P: How do you pick the charities?

D: We have processes for doing that. It is run by a senior executive who reports in
to me. I delegate it to him. My overarching instruction to him is that I want to be
a good citizen and to make sure that we put something back into the community.

P: In the long run, does that not help your corporate image? I noticed you have
gotten quite a few awards. I am sorry, I do not mean to make this appear to be a
business question.

D: I would guess that it would help our image. There is a question of whether it
helps our image more than the money you invest. That gets back to my
stakeholder point. I think it does. There are others who think it does not. Clearly,
being a good citizen has to have some balance to it. If you are a good citizen,
you would expect that people would appreciate your enterprise. That is a
positive for the enterprise. As individuals in our communities, I believe that I
ought to invest in my own community. I do that because I think it is my best
interests that the community functions properly. Hence, you vote. Hence, you
invest, whether it is in your church or synagogue or wherever. You invest in your
civic groups. If the high school is short of uniforms, you help pay for their
uniforms. You do those kind of things because of the quality of life in your own
community. I think businesses have a role in that. If we want our employees to
be comfortable living in their community, then we have to help that community.
That, in my way of thinking, has more to do with why you are active in your
community and why you are active in civic affairs and why the enterprise is active
in civic affairs than it does to help your brand image. I think it is more important
to your people, to your employees, that you are a good citizen where they live
and how they live and what their value is, than that you get something for your
brand out.

P: Is the airline industry moving towards an oligopoly?

D: I would say the airline industry is an oligopoly.

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P: Therefore, should the government reassert some regulation?

D: Almost every industry is an oligopoly. Almost all industries resolve themselves
in oligopolies. New industries are not, but old industries almost always are. Over
time, the strong survive, and the weak disappear and get gobbled up. You end
up with an oligopoly. If there is a problem with oligopolies, then they ought to
regulate the automotive industry.

P: Also, I noticed you said that one of your biggest costs was government, the
federal taxes.

D: Yes. Well, our biggest cost is government. Taxes are our biggest costs.

P: When you finish your business career, what would you like to be remembered

D: For being a good person, a thoughtful person, somebody that people can say,
you know, he was a good human being. He actually cared about people. If the
people say that about me, I will be totally content.

P: Thank you very much.

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