Chapter 21
Bill began 1988 with a wreath-laying, a prayer, and a sermon of hope in Atlanta. Since Dr. Martin Luther King Jr.’s assassination, Bill and the Marriott corporation had contributed significantly to the Southern Christian Leadership Conference and Coretta Scott King’s efforts to build the King Center for Nonviolent Social Change. “We had a huge African-American presence in our company,” Bill explained. “I felt one way we could support those good people was to support the King family’s work.”
For many years, the nation’s media have praised Marriott’s exceptional diversity initiatives, not only hiring and promoting women and minorities but also making sure a certain percentage of its subcontracting has gone to minority-owned business. A “Committee for Excellence” was created to regularly update the Marriott board as to the progress achieved regarding Marriott’s ambitious diversity goals. Also, although Bill always deferred using personal names for anything other than his father and others, he finally agreed in 2004 to an exception. Having created a singular companywide diversity award as part of its annual awards program, Bill was honored to have it called the “J. Willard Marriott, Jr., Diversity Excellence Award.”
That same commitment was evident over the years in his personal friendship and support of King family initiatives, particularly the foundation for a national King memorial in D.C., which involved more than two decades of planning, fund-raising, and construction. Bill was a major contributor and as such was an honored guest at the foundation’s programs, including the 2011 dedication. But few moments could emotionally top the occasion when Coretta King called Bill in January 1988 and invited him to deliver a short sermon in Atlanta at the twentieth annual ecumenical service since her husband’s assassination.
Bill joined the family for the wreath-laying at the gravesite a few yards from the Ebenezer Baptist Church where King, his father, and his grandfather had all been pastors. Then hundreds of friends and family members packed into the church for the program. “‘Only when it is dark enough can you see the stars,’” Bill began, quoting King from the sermon he gave in Memphis the day before his assassination. “Certainly, over the years, the Reverend King was well acquainted with the darkness of night. Yet no matter how dark it was, he taught people to bury their weapons in order to win their battles and to beat their swords into plowshares. He taught that the power of love could conquer oppression. That was the beauty of the man—his life was laced with confrontation, but his response was powered by love, not hatred. . . . It was a vision founded on faith and the belief that we should always remember what God has done.”
The church program was followed by lunch, after which Bill joined the group on that rainy afternoon to walk in a parade along downtown Atlanta’s Peachtree Street. Among the marchers were several presidential candidates, reminding Bill that the presidential campaign was already in full swing, which meant he was about to lose his reliable number two, Fred Malek, who was taking a leave of absence to chair the Republican National Convention.
This exacerbated a short but painful episode at Marriott that insiders called the “Twin Towers Situation” long before terrorists destroyed the real thing in New York City. The moniker referred to two top executives—Butch Cash and John Dasburg—whose ambitions and intense competition were unhealthy for the company and its CEO.
Francis W. “Butch” Cash joined Marriott as controller and chief accounting officer in 1973. Cash was not fond of his chosen profession. Instead, he saw himself as a leader with gifts beyond crunching numbers, and Bill agreed. In time, Cash was moved out of the finance department and appointed head of various departments in other areas.
After a decade with the company, Cash was promoted to executive vice president in charge of the Big Boy and Roy Rogers chains, the Host airport businesses, contracted food services, and the initial phase of the Courtyard development. In Bill’s view, Cash had earned those opportunities, but things began to go awry because of his expanding ambitions.
When Bill told In-Flite chief Dan Altobello that his division might be put under Cash, Altobello balked. “Because I had extraordinary respect for Bill, I told him I would tolerate Butch. But I also gave Bill a piece of my mind. ‘Every time Cash asks you for more power, you give it to him. And, trust me, what he wants is your job, and so you cannot satisfy him.’”
Cash became concerned in early 1987 when Bill indicated that it was probably time to get out of the Big Boy business, whose faulty franchise rules had thwarted every effort to expand it. Butch countered with a bold proposal: instead of dumping Big Boy, why not buy Denny’s and roll the Big Boys and maybe Roy Rogers into that chain? With 1,200 restaurants, Denny’s was the largest chain in the country; Marriott’s Big Boy system was second with 900. If a top executive came up with a reasonable idea, Bill’s management philosophy was to allow the person to proceed. So he gave Cash the green light.
Cash began negotiations with Denny’s by offering $880 million, the highest amount Bill had authorized. When the Marriott-Denny’s negotiations were announced, Marriott stock fell. Echoing Bill’s own private thoughts, securities analysts saw the drop as a backlash against more acquisitions after Marriott had already bought Saga, Host, and Howard Johnson’s. Moody’s Investor Service hinted that it might downgrade Marriott’s debt rating—restricting the company’s ability to borrow money at favorable rates.
Marriott financial experts took a closer look at Denny’s books and realized that the company was not worth $880 million. The board told Cash to drop the offer to $854 million. Denny’s responded by calling off the deal; it later sold to another buyer for $843 million. “What went right, what went wrong and why?” asked Nation’s Restaurant News, after editor Charles Bernstein conducted an investigation into the strange outcome. Bernstein concluded that Cash was “highly respected” and had Bill’s total confidence, but that the merger had failed because Bill himself didn’t do the deal. A high-level Denny’s source was quoted in the article: “Chief executives only deal with other chief executives in this business.”1
The prospect of a Denny’s merger had filled Bill with a growing unease over the acquisition and over Cash’s ability to handle a new restaurant chain. “I never wanted Denny’s,” Bill recalled. “Butch wanted Denny’s, which would make him the King of Restaurants at Marriott. It seemed to me to be a power move.”
The other half of the Twin Towers, John Dasburg, was hired in 1980 to be Marriott’s tax expert. He was a brilliant rising star, eccentric and a loner. When Gary Wilson left to become Disney’s CFO, Dasburg was promoted to replace him as CFO. In that post, he played a major role in the acquisitions of Howard Johnson’s, Saga, and Residence Inn. Cash and Dasburg were collegial associates, if not friends, who had worked well together on the Saga acquisition and other projects, but that didn’t last.
Fred Malek’s impending departure would leave a big hole in the company’s leadership. Bill took it as an opportunity to reorganize the company into two operating units—a service group and a lodging group headed, respectively, by Butch Cash and John Dasburg. Cash continued his responsibility for all the food-service groups and added airline catering to his duties. Dasburg was put in charge of all lodging except Courtyard, which Cash retained. In essence, Bill would now have two number twos.
Each man had been given stewardship over half the company. The Washington Post opined that it might be a sign Cash or Dasburg, both younger than Bill, would succeed him as president one day.2 It was as if the two thoroughbreds were waiting at the starting line for a race that must be won at any cost, even if it meant trampling Marriott’s convivial corporate culture and Bill’s peace of mind.
Cash was the first of the two to miscalculate. Two months after the failed Denny’s negotiations, Bill sat down with Cash and concluded that the Big Boy operation was not going to work out. The board soon transferred the franchise rights for the whole Big Boy Family Restaurant system to one of its bigger franchisees. Then Marriott became a franchisee itself with the 208 company-operated Big Boys. Cash had an idea to use those units to develop a new national chain of Marriott family restaurants. Appreciating Cash’s enthusiasm and commitment, Bill agreed.
Cash put the new concept on a fast track, shortening the study phase to a few months. Playing on Bill’s love for his mother, Cash named the new restaurant “Allie’s.” San Diego became the test market, with fifteen Big Boys converted to Allie’s restaurants at a cost of $320,000 apiece. The first two opened in June 1988, and customer counts and sales were substantially higher than they had been at the Big Boys. Two months later, Cash pushed for the $85-million acquisition of two more restaurant chains—Bickford’s and Wag’s—to convert them to Allie’s. Marriott executive Jim Sullivan said the hoopla and energy Cash put into his new venture was out of proportion to Marriott’s overall profile. And there was a problem hidden in the hype. “Butch’s plan was to get as many customers as possible through the doors to get used to the new restaurant,” explained Sullivan. “So he practically gave the food away. He got huge volumes of sales, the highest in the industry on the West Coast, but we made no money on it. At the time he began increasing the price to make profits, diners were bound to go elsewhere.”
On the lodging side, John Dasburg was on the same fast track, overextending the company to the point that it ultimately threatened Marriott’s continued existence. CFO Bill Shaw tried to raise red flags on a few of Dasburg’s hotel development plans, but Dasburg rolled over him. “John really believed strongly that we should go ahead with this aggressive building,” Shaw said. “I’m sure the idea of outshining Butch had something to do with it.”
At the end of 1986, Bill knew that the hotel industry would soon reach a supply-and-demand imbalance. In 1981, Marriott had shown the way to finance a hotel through tax-sheltered limited partnerships, and the rest of the top lodging firms had jumped on the train, making an oversupply of rooms in many American cities inevitable. The 1986 Tax Reform Act, which ended investment real estate tax benefits, should have prevented the coming lodging crisis, but it didn’t.
At the time, few in the press, the industry, or on Wall Street questioned Marriott’s unusually aggressive hotel building, even in that constricting environment. Since Marriott was considered the gold standard, the company was able to continue selling restructured limited partnerships (LPs) until 1990. Without the tax benefit, Marriott had to guarantee investors a cash return. New hotels take several years to turn a good profit, so Marriott offered to forego some of its management fees and even to loan investors (as a second mortgage) enough to service mortgage debt if the hotel profits lagged. With the new LP structuring, Marriott sold a phenomenal $1.4 billion of its hotel properties in the first eighteen months after the tax law changed.
Around the same time, new light emerged from the Land of the Rising Sun. Japan was in the middle of a financial boom that had its bankers looking for American real estate and companies to buy. Between 1985 and 1990, Japanese companies raised $638 billion in new capital through the stock market alone. The boom precipitated Japan’s biggest spending spree since 1945, and Marriott was a beneficiary.
Nikko Hotels, a subsidiary of Japan Airlines, was the first big buyer from the Far East. It made an unsolicited $175-million offer for Marriott’s prestigious Essex House on Central Park, which Bill accepted, mainly because at the time the New York Marriott Marquis just blocks from the Essex was nearly finished. As Marriott had acquired the Essex years before for $28.6 million, this represented a stunning $146-million profit. Not long after the Essex sale, three major Japanese banks invested more than $300 million for a refinance of the new Marriott Marquis.
Dasburg suggested that it would be a good idea to list Marriott on the Tokyo Stock Exchange as a way to cement growing relationships, which the board approved in 1987. Several deals followed with Japanese investors, including the purchase of the JW Marriott at Century City for $83.5 million and the ownership syndication of twenty-three Residence Inn hotels for $131.5 million.
Those financing deals buttressed Dasburg’s belief that if Marriott built it, investors would come. As with the Allie’s restaurants, though, there was a fly in the ointment. The development and sales of hotels were based on Dasburg’s inflated projections of future returns. But Dasburg’s manipulations became a costly blind spot for Bill, which he admitted in his 1997 book, The Spirit to Serve. Dasburg’s “reassuring eloquence overcame my gut feeling that the company ought to have exercised more caution. His arguments for continuing to build hotels in spite of [an oversupply and] signs of recession were so smooth, so reasonable, so apparently logical that I let myself believe everything would be fine. What I learned, of course, was that just because someone is a polished speaker or presenter doesn’t mean that his or her ideas are always right.”3
Ex-Marriott treasurer Steve Bollenbach suspected Dasburg was leading Bill down the garden path when he heard Dasburg speak at a lodging industry conference. Bollenbach had left the company when Dasburg was made CFO instead of him. Almost immediately, Bollenbach had been offered the CFO post at Holiday Inn. Bollenbach recalled that at the conference all the buzz was about overbuilding, “and somebody asked John, ‘Is Marriott going to overbuild?’ He said, ‘Marriott is so powerful we can build through any cycle.’ I was sitting there thinking, ‘Is this the most arrogant statement I’ve ever heard? Probably.’ Now, did John believe what he was saying? I have no idea.”
The Twin Towers rivalry between Cash and Dasburg was the backdrop for key corporate missteps during this time. Bill would go home after work and share his frustrations with Donna. “Bill doesn’t like friction,” she said. “He wants to keep communication open, but that wasn’t happening. Butch and John were doing things to try to undermine each other.” Increasingly Bill could see that neither man was suited to be president of Marriott.
As the rivalry escalated at the end of 1988, tragedy struck. Dasburg’s six-year-old daughter was killed in a school-bus accident. In the wake of that tragedy, Dasburg sought solace by immersing himself even more in his job, including redoubling his rivalry with Cash, which did not bode well for the company in the critical year of 1989.
The Marriott family began the year with a celebration of the election of President George H.W. Bush. Having been both financial and ideological backers of Bush, they watched the inaugural parade from the JW Marriott on Pennsylvania Avenue and attended one of the inaugural balls. A month later, Bill traveled to Hong Kong to open Marriott’s first hotel in the Far East.
This “first” was not without its hiccups. The New York Times reported that Marriott’s decision to put employees on a five-day work week had angered the competition in a city where most people were expected to work six days.4 The company was ostracized from the Hong Kong Hotels Association, and the general manager was banned from talking to employees of local restaurants (for fear of “poaching”) and was shunned at business gatherings, where most lodging executives refused to even shake hands with him.
Marriott’s first hotel in Asia.
Bill was furious, but he stuck to his standard employee practice. “I am quite surprised by the reaction,” he observed to a South China Morning Post reporter. “Hong Kong is a bastion of free enterprise and to me free enterprise means free to compete, free to make your own decisions, free to make mistakes. We are coming into an extremely tight labor market situation here, and not going to change our way of doing business.”5 Employees from other hotels flooded Marriott with applications. Bill found that the hardworking Chinese weren’t attracted by having an extra day off; they saw it as an opportunity to find better part-time work with the paired two days.
When Bill returned from Hong Kong, Cash reported on his profitable food-service operations in airports and on toll roads. One of his newest departments was showing promise as well. Marriott partnered with Nashville-based Corporate Child Care, Inc., to develop and manage day-care facilities at work sites. Six centers had been established, and there were 100 prospects on the horizon among FSM’s corporate and health-care clients. Another new operation, facilities management, was also going gangbusters. Marriott had fallen into this line of work when the Saga acquisition included a 20 percent share in a small firm specializing in housekeeping, industrial plant operations, and maintenance for hospitals and schools. Sensing a new market, Bill also bought a major provider of housekeeping, maintenance, and laundry services with more than 600 contracts.
On the good news-bad news front, Marriott’s senior-living facility offerings were popular, but the tremendous demand on the company’s capital was a drag on profits. In the early 1980s, Bill recalled, “I told our people, ‘We’ve got to get into the health-care business. This is going to be a big, big business, and we’ve got skills to apply.’” His parents were in their eighties, and he became interested in the plight of the aging population and how they could experience good care while retaining their independence and dignity.
Traditional nursing homes had a terrible reputation. Bill thought Marriott could build first-class facilities and make a profit. The first two projects for the new Marriott division, Senior Living Services (SLS), were “endowment” concepts, meaning that residents paid a large dollar amount up front to be taken care of until death. Retired army officers joined with Marriott to build “The Fairfax” in Fort Belvoir, Virginia. Haverford College near Philadelphia partnered with the company to develop “The Quadrangle” for its retired alumni and faculty. Both opened in mid-1989. Marriott also acquired the Villa Valencia retirement complex in Laguna Hills, California, and Basic American Retirement Communities, which had management contracts for eight communities. SLS was moving ahead with three more communities: “The Colonnades” in Charlottesville, Virginia; “The Jefferson” in Arlington, Virginia; and “Bedford Court” in Silver Spring, Maryland. The last was named after the English county that Bill’s ancestor Elizabeth Stewart Marriott came from. Additionally, a new line of “Brighton Gardens,” which had both independent and assisted-living housing, was planned for older Americans of modest means.
As positive as all this sounded when Cash was reporting to Bill in early 1989, SLS was still unprofitable and was going to eat up $110 million in capital that year alone.
Cash’s new Allie’s restaurant chain was also struggling, which put two of Marriott’s biggest enterprises, Big Boy and Roy Rogers, in doubt. The previous November, Bill had initiated “Project Sparrow,” an internal confidential review of all Marriott operations. Early word was that the analysis would recommend disposing of the restaurant chains and airline catering. They were profitable, but their growth was too slow to fit the Marriott paradigm. In the midst of such uncertainty, Cash ramped up his rivalry with Dasburg to prove to Bill that it was Cash who deserved to be the next president of Marriott.
Neither of the Twin Towers seemed to realize that their internal warfare was stressing Bill to a breaking point. Dasburg recalled that his disagreements with Cash had their core in the men’s competing views of where Marriott should go. “He ran half the company and I ran half the company,” Dasburg said, “and the two of us had a vastly different view of what the future of Marriott ought to look like. I wanted to split Marriott into two companies.” Cash disagreed. Bill recalled that he talked with Dasburg about separating the company but never seriously considered it.
As an active Latter-day Saint, Cash might have thought that gave him an edge over Dasburg. Although Bill appreciated Cash’s faithful Church service, it was Cash’s ability to sell himself to the CEO that mattered. “He was always working on convincing me that he was doing a good job. He sold me, and I missed it. I had blinders because I liked him personally, and I thought he was pretty sharp. But after he was promoted to run half the company, he got carried away with himself and started making some bad decisions. He became very difficult. Even when he was talking with me, he would say, ‘My company’—‘In my company, we do it this way.’ That was not the attitude of a team player. He was always pushing me for more money and responsibility. He wanted to be CEO.”
The competition was a strain on morale at corporate headquarters. “Both of these men were bright, capable, hands-on managers, but instead of taking care of each other and those who worked for and with them—a key tenet of our teamwork-based culture—they let personal priorities get the upper hand,” Bill reflected. “In the process, they destroyed a great deal of goodwill, wasted energy, and upset a lot of people, including me.”
In-Flite Services chief Dan Altobello was above the fray because he was on his way out to become CEO of the split-off CaterAir. He said, “Dasburg and Cash got into this company warfare and other idiots in the company took sides. I did not, but I did go to see Bill at his home and suggest: ‘Why don’t you just fire both of them? You are working too damn hard! It will be easier for you if you just throw them out.’” Altobello thought the rivalry was a contributor to Bill’s first heart attack on October 2, 1989.
Bill was on his way to New York for his first full meeting of his newest obligation—the General Motors Corp. board of directors. Rather than flying, he decided to take the train and catch up on his reading during the three-hour trip. The night before had been an uneasy one. He awoke at three a.m. with chest pains, took some aspirin, and knew he wouldn’t get back to sleep. The pain subsided, “So I went down and rode my stationary bicycle for ten minutes and nothing happened. The pain didn’t come back and I was fine,” he recalled. He arrived at the office at six a.m. and worked until after nine a.m. Then he left for Union Station to catch the ten a.m. Amtrak Metroliner to Manhattan. Delayed by traffic, when he reached the station he asked his driver, Bracey Bullock, to stick around for ten minutes in case he missed the train.
Bill’s chest was burning as he settled into his seat. Then he heard a voice tell him, “Get off the train.” It was the same voice that had told him four years earlier, when he was literally on fire, to “Get off the boat.” For the second time, Bill obeyed.
Bracey, who was still outside with the car, raced his boss to Georgetown University Hospital, where tests showed Bill had experienced a heart attack. A cardiologist performed a balloon angioplasty. Bill was fifty-seven, a decade younger than J.W. had been when he’d had his first heart attack. Family and friends had little doubt that the Twin Towers feud was in part to blame, but Bill was reluctant to agree. “I had been the walking stereotype of the workaholic executive—too little exercise and rest, too much work, and too many heavy dinners too late at night,” he said. “Obviously, the infighting at the office was stressful—very stressful. I agree that the Twin Towers, so to speak, had something to do with it.”
After a week in the hospital, Bill was on a therapeutic treadmill when he suffered his second heart attack. Doctors performed a second angioplasty, and Bill was released after two weeks in the hospital. He had been home less than a day when his world was rocked once again with unsettling news from the opening day of his much-awaited San Francisco Marriott hotel.
The morning and afternoon festivities and ribbon cutting went off without a hitch. Then, at 5:04 p.m., the hotel began to move. It was October 17, 1989, the day of San Francisco’s worst earthquake since 1906. During the temblor’s fifteen seconds, terror filled the city. Homes and buildings in the Marina District collapsed, as did sections of the two-level Interstate 880 in west Oakland, and the San Francisco–Oakland Bay Bridge.
At the new Marriott hotel, the glass crystals in the chandeliers of the ballroom fell like a hailstorm. The glassware above the bar of the thirty-ninth-floor View Lounge crashed to the floor. (The lone glass that survived was later displayed in the lobby under a plaque stating: “Shaken and Stirred.”) Guests rushed down the stairwell to the lobby, expecting to find it in ruins. But because the hotel had been built to meet modern earthquake standards, it fared better than many buildings in the city. The staff shepherded the guests into the Golden Gate Ballroom, where they would spend the night on makeshift bedding. Many San Franciscans who could not make it home found refuge in the hotel.6
Bill was relieved that the hotel had escaped significant damage, but he knew that a tremendous amount of money would be lost from cancellations of conventioneers who had booked the hotel in its first weeks. He also remained concerned that Dasburg had been unable to sell the $300-million hotel before it opened. That was too much debt for the company to carry for a single project. In less than a year, when the company was in the midst of an unthinkable crisis, the Washington Post would refer to that day in San Francisco as “a bad omen” for Marriott.7
Out of the hospital, Bill began an exercise regimen that included walks and supervised workouts on a treadmill and a bicycle. He knew he had to travel less on business. Dick came out of his semi-retirement to fill in. “The most important thing is that somebody with the Marriott name is out there,” Dick said at the time. “You won’t find a better friend or a more loyal brother than Dick,” Bill said.
In a tribute to Dick a couple of years later, which was both rollicking and touching, Bill tied a number of Dick’s attributes to his middle initial, “E”—such as Eating. “‘Let’s eat’ has been a clarion call of Dick’s for as long as I can remember,” Bill said. “A few years ago he invited me to shop a few competitive fast-food units in Phoenix. After the twelfth restaurant and twenty-fifth meal, I was searching in vain for the Rolaids and Dick was pressing on for the next twelve joints. Last week he stopped by to visit my mother and, after his second Reuben sandwich, he ate a whole rice pudding. Mother complained that she was only able to get two mouthfuls before the entire bowl had disappeared.”
His younger brother was also notably Efficient. “Dick is one of the most efficient time managers I have ever seen. He knows how to get things done and do them fast. His fine performance these past years is a result of his ability to make decisions and take fast action. He is super fast in everything he does. He has a natural ability to build and fix broken things and does not waste time doing it.”
Dick was singularly Economic in his personal expenditures, as their parents had been. “Dick has the bucks because he doesn’t spend them,” Bill remarked. “If there is a less expensive way to do it, Dick can find it. He’s an outstanding businessman and really knows how to save his money. A few years ago, I complimented him on his new suit—it was beautiful. He informed me that it just came in from Uniforms for You, the company’s uniform supplier, and was really not very expensive since it was made from the same material as our waiters’ jackets in the Sirloin & Saddle restaurant.”
He was also the epitome of Endophasia, Bill added, which “is a medical term meaning internal speech with no audio vocalization. My dad often called Dick the ‘silent one.’ After I returned from a two-week business trip with him where Dick and I went all the way around the world together, Donna asked what we had discussed. I said we talked about the business a little—and, oh yes, Dick looked at Hong Kong harbor from the hotel room and said, ‘Look at all those boats.’ I was at a loss to find out what else he had said during the two weeks since Dick doesn’t like to talk a lot!”
Finally, Bill said, Dick was an example of Empathy, Effort, and Elocution. “During my health problems, Dick has been empathetic with frequent hospital visits, home visits, and phone calls. Always concerned, always caring—as I’ve canceled trips and he has put forth the effort to make them for me. As I’ve canceled speeches he has energized his great elocution skills and made over a dozen speeches that I’ve had to cancel.”
In short, Bill concluded, “my brother’s personal pursuit of excellence in everything he does is amazing. Because of this, he has enhanced and enriched our lives by his loyalty, his love for this business, and his love and concern for all of us (in the family).”8
While Dick was out on the lecture circuit covering for his ailing brother in the fall of 1989, the difficult Twin Towers episode ended when one of the two men, John Dasburg, resigned.
In the months before Bill’s heart attacks, Dasburg had been pushing hard for permission to build more Courtyards, Fairfields, and Residence Inns. Bill was uncomfortable with the debt that would entail. When Bill found out that Dasburg had forged ahead with several hotel projects that Bill hadn’t fully approved, he was ready to grant Cash’s request to be made chief operating officer, a new position at the company. A few days after that, Dasburg stormed into his office and said, “I’ll never work for Butch!”
Then Dasburg went to Cliff Ehrlich, senior vice president for human relations, and announced, “I can’t work for the same company as Butch Cash so I’m quitting.” Ehrlich immediately called Bill at home and asked, “What do you want me to do?” Bill’s answer was firm: “Accept it.”
The next morning, Dasburg called Bill and said he had had a change of heart, and could he come back? “No, you quit,” Bill said. And that was it, the end of the Twin Towers, after nineteen months of turmoil at the top of the company.
The hardest work Bill Marriott put into his recovery from the heart attacks was to not work. What unsettled him the most during that time was a persistent sense that a storm was coming for the company. “It was not easy to face the fact that three decades of sixteen-hour days on the job had put me in the very position I most wanted to avoid: not being at the helm if we hit rough seas.”
Bill finally returned to work in mid-November, six weeks after the first heart attack. During that recovery period, Marriott’s board of directors expressed deep concern that Bill had not yet chosen a successor. One board member asked Bill at a meeting, “All right, Mr. Marriott, on the way back from the cemetery after burying you, what do you want us to do?” Bill’s three sons were too young and inexperienced to replace him; Dick was not interested. So the board settled on Chief Financial Officer Bill Shaw as the best possible successor.
In the meantime, Bill Marriott needed to build up his strength by staying at home as much as possible. Thus, he missed the grand opening of the five-hundredth Marriott hotel, this one in Warsaw, Poland.
The company had identified Poland and Hungary as the two most likely places for Marriott to crack as the Soviet Union was crumbling. Five thousand Poles flooded Marriott’s Warsaw recruitment office to apply for jobs, lured by the higher pay and the opportunity to learn Western business and service practices. General Manager Haile Aguilar decided to “grow his own staff” from applicants untainted by prior hotel experience. He turned down all but three applicants with hotel résumés, believing “that the lack of a profit motive and more than 40 years of state control had deadened the notion of service in most Warsaw hotels.”9
Instead, he said, “We looked for young people with big smiles who spoke English and were willing to work. The ones who held the most intelligent conversations in interviews were made managers.” Twenty of those hires were sent to Boston for Western hospitality training, and they assisted in hiring the rest of the staff. So, a former teacher was soon carrying bags, a plumber became a kitchen steward, a computer technician patrolled the halls as a security officer, a dental technician carried trays in the coffee shop, and so on. Transforming Eastern Bloc workers into Western service personnel was daunting. In the first week, five employees were fired for drinking on the job and two for theft. Many had to be coached about their personal hygiene.
Still, Marriott’s high standards were evident from the first day the hotel opened in Warsaw to great fanfare. Hotels magazine called it “The Miracle on Chalubinskiego Street.”10 Dick flew to Warsaw to represent the Marriott family at the opening. When Bill Tiefel initially saw the 1,000-person list of other invitees, he protested to GM Aguilar. “I said, ‘It’s too many people. It’s going to be a mob scene!’ His reply was, ‘I invited everybody who was in (Communist) power when we started to make our deal here. I invited everybody in power (in the Solidarity government) today. And I also invited everybody that I think is going to be in power next week. So I have three times as many politicians as I need.’ You know what? He was right.”
Exactly two weeks later, the Berlin Wall fell. It was an unforgettable symbol of the end of the Cold War and an opening of the Eastern Bloc to the West. “We just opened a hotel in Warsaw,” CFO Shaw noted at a press conference. “Some say that was the most planned stroke of genius in history, but we’ve been working on that for five years. Neither Mr. Marriott nor the rest of us had any idea that Poland was going to turn its back on Communism so totally as it has, but that hotel has positioned us well with other East European countries, whose representatives attended that opening and were tremendously impressed. They want Marriotts in their cities because they do not have good hotel accommodations, and because they must have foreign capital now.”Hotels magazine called it “The Miracle on Chalubinskiego Street.”11
The future was bright for Marriott in what had been so recently known as the Warsaw Pact countries. Meanwhile, in Western Europe, Marriott was also expanding with Courtyards in the United Kingdom and hotels in West Germany.
The day in November that Bill returned to work after his heart attack marked the twenty-fifth anniversary of his promotion to president of what was then called Marriott-Hot Shoppes Inc. Over those twenty-five years, he had racked up an extraordinary annual compound growth rate of approximately 20 percent each year in sales, net income, earnings per share, and stock price. Annual sales had gone from $84 million to nearly $8 billion.
Marriott had also become the tenth-largest employer in the United States, with 230,000 employees—compared to 9,600 in Bill’s first year as president. Aside from bringing Marriott to the number-one spot in terminal, turnpike, airline catering, and contracted food-service businesses, Bill had multiplied the number of hotels the company managed from four in 1964 to 534 at the end of 1989.
Having been raised by his father to believe that “success is never final,” Bill felt a big change was needed. At a New York City securities analyst meeting on December 18, 1989, he announced a “major restructuring of Marriott corporation.” The spin-off of the airline catering division had been finalized, and Marriott would be selling its fast-food restaurant chains. “Our family’s name is over the doors, so deciding to exit our two oldest businesses—restaurants and airline catering—has been a difficult and an emotional choice,” Bill said.
Only the twelve Hot Shoppes in the D.C. area, the last of the company’s original 1927 product, would be retained. Marriott would still keep its foot in the door of food service with more than 4,000 restaurants in its hotels, at fifty-one airport terminals, along fourteen interstate highways, and in institutional feeding operations.
“As we move into the 1990s, we want to sharpen Marriott’s focus on mega-markets in lodging and contract services,” Bill said. “We plan to double our number of hotels to 1,000 properties by the mid-1990s, and one-third of these new hotels are already in our pipeline.”
Two days after the big announcement, Bill woke up to a 3:30 a.m. phone call. American troops had invaded Panama, and the Marriott Caesar Park hotel was surrounded by hostile forces that had raided the hotel and taken away hostages to an unknown fate. Under the code name “Operation Just Cause,” President Bush had ordered 27,000 American troops to launch an attack at midnight aimed at unseating and capturing General Manuel Antonio Noriega. Resident manager Daniel Sarria was in charge of the skeleton hotel staff.
A half hour after the invasion began, a dozen of Noriega’s paramilitary battalions raced through the front and back doors of the hotel armed with rocket launchers, Uzis, AK-47s, and M-16 rifles. They fired a few shots for effect as they herded eighty guests into the lobby and ordered them to lie facedown on the floor and put their hands behind their heads. “We’re being invaded, so we’re taking hostages,” said the man who appeared to be their leader. After the soldiers checked passports, twelve foreigners, including three journalists and four other Americans, were taken away.12
Soldiers surrounded Sarria when they learned he was the manager and demanded the keys to the rooms of all the American guests. When he refused, he and two American journalists were tossed into the back of a pickup truck and driven away. Sarria was released after a couple of hours, and he walked through the dangerous streets back to the hotel, where he continued to take care of the guests. He had some of the Americans don employee uniforms and hid others in laundry hampers and industrial washing machines.13
American troops had higher military priorities than the hotel, but, by evening, the pleas of Bill and American broadcast news officials finally had an effect. Secretary of Defense Dick Cheney and Secretary of State James Baker knew that Bill was a political supporter and friend of the president, so his problem carried extra weight. After most of the military targets had been secured, ninety U.S. paratroopers braved three hours of firefights to cover the two-mile distance to the hotel. They secured the hotel at midnight, ending a day of terror. The following morning, “the paratroopers piled 110 guests and hotel workers into two Marriott airport food service trucks and we barreled down the road under fire,” recounted a rescued Associated Press reporter.14
All the hostages were eventually released unharmed. With a .30-caliber machine gun set up facing the main entry, American soldiers occupied the hotel for fifteen days, enjoying accommodations in the most luxurious suites on the fifteenth floor. They were welcome to that and more, as far as Bill was concerned.
• • •
For many years, it had been the Marriott family’s tradition to fly to Acapulco the day after Christmas and stay in the vacation home Bill and Donna owned. “We were supposed to go to Acapulco, but we decided to scrub that plan,” Bill recalled. Donna insisted: “You’ve got this heart problem. We’re not going to Mexico. We’re going to Florida.” So they flew to Fort Lauderdale and checked into the Marriott Harbor Beach Resort hotel, which had opened five years earlier.
Although he occasionally experienced chest pains, the morning of the second day at Harbor Beach, Bill was exercising on the stationary bike when the pain became severe enough to warrant a trip to the hospital. “They couldn’t find anything wrong with me and sent me back to the hotel,” he said. In the evening, Bill and Donna went to a movie.
While they were away, a regional Marriott executive slipped a note under the couple’s hotel suite door. It said: “If you have any heart problems, call this cardiologist. He’s a good friend of mine.”
Less than half an hour after returning from the movie, Bill was nearly bowled over with extreme chest pains. Gasping, he called the cardiologist and left a brief message: “It’s Bill Marriott. I think I’m having a heart attack. Call me back.” The doctor called within ten seconds and instructed Bill to meet him at the Florida Medical Center. Bill had only one blocked artery, but it was the left anterior descending (LAD), a condition doctors call “the widowmaker” because it’s the one that causes the biggest heart attacks. Bill needed a bypass and he couldn’t be moved.
“I will never forget that lonely, sleepless night,” Bill told a church audience the following spring. “It has been said the Lord will indeed accompany us to the hospital room and we must have total faith in Him to do what He knows is best. I thought a lot about my past deeds—some were good and some fell short. . . . I wondered whether or not I would truly qualify to enter the presence of our Lord. Would I pass the judgment bar, or fail?”15
After a relatively sleepless night, his spirits were lifted at 5:30 a.m. when two nineteen-year-old Latter-day Saint missionaries whom he didn’t know entered the room. One of the hotel’s executives had thoughtfully contacted the mission president to request a visit by the elders, who gave Bill a priesthood blessing. “That blessing helped give me the faith, courage, and strength I needed. I felt their humble, strong spirit as they uttered the simple blessing.”
He was then operated on by a surgeon he did not meet until ten days later. When Bill woke up, “the nurse said, ‘Well, Mr. Cash, how are you feeling?’ I couldn’t talk because I had a respirator down my throat, but I thought, ‘Have I died and gone someplace else?’” For privacy and security reasons, Donna had provided the hospital with an alias—Ronald Cash—for her husband.
A few days into Bill’s hospitalization, close friend Ralph Hardy flew to Florida for a visit. He teased Bill about going ahead with the bypass at the unfamiliar hospital. When Hardy had faced open-heart surgery in Salt Lake City, Bill had said, “I’ll set it all up at Mayo or Mass General. Those are the only places you should go.” Ralph had declined the offer, and the surgery had gone just fine. Now, Hardy said, “You’re in an even smaller hospital than I was, which none of us has ever heard of. And you didn’t even know the doctor who did your open-heart surgery!”
After two weeks in the Florida hospital, Bill returned home. Little did he know, as he was wrapping up this difficult year, what challenges were awaiting just around the corner.