1998 Volume 121 No 1–4 - Phi Delta Theta Scroll Archive

Gary WUson (left) and John Dasburg at
Northwests World Headquarters in St. Paul, MN.
role of "virtuoso dealmaker'
at Marriott, Disney and as a
principal INVESTOR
now at Northwest.
a very intelligent, clear thinker who will
hsten to all sides of every argument, and
generally makes the right decisions," said
Wilson.
Dasburg later became the president of
Marriott's Lodging Group and executive
vice president of Marriott Corp. In this
post, a $3.5 billion division with more
than 100,000 employees, he was responsible
for the full range of Marriott's lodging
products. The appreciation he gained
for the power of employees and customer
service would later prove crucial to the
success of Northwest Airlines.
"I've often heard that people describe
my work ethic and ability to focus as my
primary attributes. Neither of those
characteristics are particularly soft, but
PHOTO COURTESY OF NORTHWEST AIRLINES
they probably do describe me," says
Dasburg.
Only a year after his move to Northwest
in 1989, Dasburg became president
and CEO of the airline. The corporation's
top executives now began to focus on
their people: the employees, the pilots,
the flight attendants, the mechanics, and
the customers. They focused on everyone!
Insiders argue that this ability to
focus on the importance of people has
made Dasburg the most influential CEO
the airline industry has ever seen. Morale
at a struggling Northwest, which had
experienced continued downturns, began
to rise.
Northwest, which is now the world's
fourth largest airline, began service on
October 1,1926, flyingmail between
Minneapolis/St. Paul and Chicago. Passenger
service was initiated the following
year. In 1947, Northwest pioneered the
"Great Circle" route to Asia, flyingto Tokyo,
Seoul, Shanghai and ManUa. The
airline has operated across the Pacific for
more than 51 years, longer than any
other carrier, and continues to offer the
most service between the U.S. and Japan.
Its domestic prominence was strength-
ened with the acquisition of RepubUc
Akhnes in 1986. But in the early 1990s—
difficult times for airlines in general—
things got worse for Northwest in a big
way.
"We've had our ups and downs at
Northwest Airlines since our group acquired
the company. First we had the depression
in our industry in the early
1990s, which set Northwest and the
whole industry back," said Wilson.
"The key to improving any enterprise
is gettmg the best people to work together
toward a common goal. I think
the one thing that we've been successfiil
at doing is focusing on the company's
human and financial resources in improving
the airline. It's truly the people
that make this happen. And that's the
key to any enterprise's success."
Dasburg's and Wilson's efforts to get
the best people working toward
Northwest's goals were never more evident
than on July 6,1993. Hurt by the
recession and with a $1 bilhon debt payment
due. Northwest's attorneys were
down to the wire, wrapping up a Chapter
11 filingat four in the morning. They
couldn't find the money and had arranged
for an 8 a.m. appearance before
the judge.
But no bankruptcy papers were filed at
8 a.m. At the last moment. Northwest's
unions approved pay cuts, totaling $886
million, in exchange for 30% ownership
in the company. This gesture saved the
company. Lenders decided to push back
$1.7 bilhon in debt payments until 1997.
Wilson and Dasburg now had the time
needed to do what they do best. Dasburg
leading his management team—against
"conventional industry wisdom"—began
to trim the company. It is commonly held
that airlines need to be as large as possible
to diffuse cost. But Northwest,
minimizing activities where profits were
low or non-existent, refined itself to a
profitable core. Within a year. Northwest
emerged as the nation's most profitable
major carrier. Its unprecedented, and
now often copied, aUiance with KLM also
helped to efficiently expand service
across the Atiantic and into Europe. The
two airlines have had some difficulties,
but no one can deny that both are benefiting
from their relationship.
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