When I was younger, I heard an album by Von meter in which he would Humphrey was reputed to have said I'm pleased as punch to be here. Now. I always wondered where was Hubert and why was he so pleased to be there? And now I know he was in, Minnesota. I just got to tell you how much this means to my wife Cathy and me. This is the most beautiful place that we've ever been. I had the opportunity to fly up to Brainerd yesterday Cathy and I just bought a house on Lake Harriet. What do we do we drove around the house the the lake about four times. We got to go down to the Walker and this is just one extraordinary community. And another thing about it is the warmth and Hospitality of its people where else does a complete stranger come to town open his Sunday newspaper and see a banner headline that says check he takes off. Now, I know that half the people looked at that and said what is the checky and why is it taking off? The other thing is that as you know, I'm a businessman and it's just great to be in a strong business Community. Minnesota is you know has more Fortune 500 companies than any state its size great names General Mills 3M Land O'Lakes Honeywell, and yes a well-known Airline. And at the base of this and why is this state been so successful? I think we got a glimmer of that today is your commitment to education and clearly you people here by honoring people with the Excellence in education awards show that you understand. What is the lifeblood of a business community? Now for me, this is the kind of homecoming. I began my business career in the midwest. I was 26 years old. It was the height of a recession and for somehow I found myself responsible for the largest real estate project in the United States and fortunately I had some good Midwestern people take me under their wing God knows what would have happened to me if I'd been in New York. But I'm back and I intend to remain and I want you to know that I look at Northwest Airlines is absolutely the culminating challenge of my business career now as a newcomer to your state. I feel it's incumbent upon me to introduce myself. Now. I'm going to get very personal tonight. And there's a reason for that. I've been entrusted with what I consider to be one of the most important private institutions of your state and I think you're all entitled to have some better understanding of what I'm all about and where I've been. Occasionally seen myself described in the press as a Los Angeles investor, and I've got to tell you I don't see myself. That way is some factor of production. And I don't think any of you would either I'm first and foremost a father and a husband everything that I do emanates from my sense of family second. I like to think of myself as a good friend everything I have been able to accomplish has been done with the help of a lot of people and I think you people reciprocate you are a good friend and they're good friends to you. How could a relative unknown like me muster the resources to acquire a company like Northwest Airlines I submit to you I had a lot of Help from My Friends. Lastly I see myself as an American citizen and by this I do not mean a flag waver or anything like this is simply see that everything I do is done in a context of a society that's been very good to me and very good to my family. Let me explain that a little bit more fully. I had four grandparents who got off the boat from Italy. None of them spoke English and none of them even went to high school. In the Next Generation my mother got to go to high school and my father got to go to college as a as a result of their labors. I went to the very best of schools and the doors of opportunity were open to me. And now I try to do for my son as my father did for me and his father before him and this is not just my personal story. I'm sure sure that throughout this room tonight. There are people with a similar story and it's not my story. It's a story of this country. A My Chosen career is business. Now by ordinary measures I suppose that I've been successful but once you know, I don't measure this success in numbers, but by what I've learned at places like Marriott Corporation Bass Brothers and Disney I learned a few things that I like to share with you First of all, I learned that an individual can make a difference even in a large company in a large bureaucracy. You can be an agent of change and you don't have to accept the status quo. Second I learned the people want leadership at an early rage. I read a book by Erich Fromm called escape from freedom in this book from postulated that man has a fundamental fear of isolation. I think this is true. What from was saying is that people bind together for Mutual protection? They trade some of their individuality in order to belong to something larger than themselves a family a neighborhood a corporation a country and I think a good manager recognizes the needs and the fears of people and he protects them. Third I learned that success most often comes through simplicity. Business like most Endeavors is basically Common Sense. There's no great magic to what we do and we shouldn't take ourselves too. Seriously. Fourth people quite simply are our most important assets and as you know that which separates the average of the poor companies from the great ones not Financial Resources. It's not physical assets. It's the quality of the people and great companies create great environments for their people. lastly I've learned that people respond better to inspiration and encouragement than fear trust breeds. Trust loyalty bleep breeds loyalty tell people they're great and they'll become so we have a four-year-old daughter. We were walking down the street where they stop and they said she really is cute. They people stopped us and they said God she's so cute and she looked at him and she said well and I'm smart, too. In addition to these things. They're a couple principles that I learned to. And basically the most important one is that essentially all people are the same whether in the private sector the public sector Labor Management or whatever now most of us Pilots excluded. Spend nearly 50 percent of their waking hours on the job. If we're going to spend half our lives doing something. And life is too short, then we ought to enjoy it. We want that for ourselves and I assure you. We want that we should want that for employees. Second is all of us have responsibilities that extend beyond ourselves. Two spouses two children to extended family and at a minimum and the workplace we seek financial securities for our families people are entitled to that. Third once people have taken care of their responsibilities to others. They got some basic responsibilities to themselves. An individual needs and requires a sense of personal dignity. They ought to be able to find that on the job also. I further believe that everybody has something unique something special to offer and everybody seeks in the workplace if they can find it an opportunity for self-expression and creativity as I approach something like Northwest. I can't help but think of what kind of place it could be if we could tap the Creative Energy and the excitement of forty thousand Souls. I think it's an awesome Prospect. lastly everyone I submit has a desire to leave something behind. Make a contribution to something larger than themselves. Now a manager has to create an environment for people to do all these things but it doesn't stop there. He has to do even more he has to balance often competing interests. You got the interest of the employees on the one hand their desire for the kinds of things that we just discussed. Then you get the interest of the Enterprise. You got to keep the place financially viable and you got to keep it flexible in order to meet competition got employees on the one hand. This is a tough job this managing and you got the Enterprise on the other and it doesn't stop there. Unfortunately because I didn't even mention the most important thing which is the customer. Who's the one we all work for. indeed in other than making other than making Northwest a great place to be for our employees. I see our Central challenge of becoming number one in customer preference the airline that most people want to fly. We are not that now and I think you know that yet recent surveys show and I think anyone who saw the Wall Street Journal last week. Show that no Airlines doing a particularly good job. In fact, the airline industry is the industry in which the consumer has the least confidence of any industry in the United States. Becoming number one is a great Challenge and requires the total commitment from all of us yet. By my way of thinking is the only way to compete in this business. I mean think about it. Everybody is flying the same planes. They all go from point A to point B, it takes them all the same amount of time and confusing as it is that ultimately turns out they all charge you the same. So really providing Superior Service is the only way to differentiate yourself now when I was at Marriott, and we started out. We were fourth in custom preference and there were not as many Hotel companies as there are Airline so we were really low down on the totem pole. We set as our objective to become number one, it took four and a half years and in four and a half years. We became the number one hotel company for customer preference and I submit to you the Northwest can and will do the same. Let me just say just a few words on Northwest. A lot of people have sort of said to me. Well, you know, what? Did you see? Why did you do it? It was real simple. Remember I said business is common sense. And I looked at this this this company and I said, you know, it has the largest market share in the fastest growing Market in the world, which is the Pacific. I said I think this company is going to grow. Second it was extremely well positioned. All of our Union employees are under long-term contract. This is a rare state of stability for anybody in the airline industry. Then in completing the pilots agreement, we put the last piece in place of this Northwest Republic merger. Now. I am very glad that I was not here three years ago when we merge those two companies, you know, they say the timing is everything. I mean, we inconvenienced ourselves. We had Red Tails vs Green tails and whatever but we are finally in a position to realize the synergies that had been anticipated in that merger. So Northwest is going to grow dramatically in the Pacific and it's now positioned to be very efficient and grow dramatically domestically. I thought gee this is great. The only problem is this is an industry that is capacity constrained. There aren't enough airplanes. Well happily Northwest was in the position where it had a backlog of something like a hundred and twenty five of the latest state-of-the-art aircraft purchased at wonderful prices and indeed one of the Hidden assets of Northwest is that it has a billion and a half dollars of equity value and its aircraft. So here we were in this great position. We are in markets that are going to grow and we have got the product to supply the markets doesn't take a genius to figure out this is an opportunity. Moreover and I really mean this because I do have a background in service businesses Mary. It is a great service company Disney is a great service company and I really do believe that people are the most important assets and here was a company headquartered and had its principal employment base in Minnesota in the midwest where I think we were I think the people have an incredible work ethic. So all the assets were in place for Success here. Now, you read a lot particularly recently about lbos and how dangerous they are and things of this nature and and I must tell you that I have been preaching about lbos and about the dangers of the junk market for several years now and you should understand that in putting together this acquisition. We didn't use any junk bonds or any of this nonsense and we did the most conservative fashion possible. We just use senior Bank debt and the cost of that. That way to cost of that debt is less than 10% And this is substantially lower than most people had anticipated and I really feel we did our homework. We assumed a massive recession for 1990. I hope it doesn't happen. But I think we would be remiss if we didn't provide for the downside and even with that we pay off all of the acquisition debt of Northwestern between five and six years. Now however, bright our immediate future is in the long-term. Our success is going to depend on our ability to adapt to a world that is rapidly changing and anyone in business knows that we are no longer a self-contained economy. I think the special relationship that we've structured with with KLM Royal Dutch Airlines puts us in a position to be responsive to the changes in the world. We do not know what is going to happen in Europe in 1992. When that consolidation occurs in our particular interest industry. Everyone's talking about Global Systems. I'm not sure how they're going to develop and I think we're going to be ready. A very shortly I embarked on a worldwide tour of Northwest employees. I won't be spending that much time in Minnesota over the next year. And I've already met over 4,000 of our employees, but I want to meet all the ones who work for us. And I want you to know the message that I've been sharing with them as I've toured the country first that I seek a relationship that is based on mutual respect and Trust. That our people do deserve Financial Security and empowerment. They ought to be able to take more responsibility for their own actions in the workplace. But if they do and they get this Authority, they've got to accept the responsibility and if you're going to be a manager and I want to see all of our people manage than fine. You take care of your employees. You got to take care of the customer and you got to take care of the Enterprise and every decision that you make you balance those three. Thirdly, I want our employees to have the same sense of satisfaction from their work that I've had for mine over the last 15 years. That's a satisfaction. Not only measured in dollars. But one that came from the opportunities that were given me for self-expression and creativity in the turn-of-the-century New York when stonemasons built buildings, they often wood chisel their names in a piece of granite or piece of marble. Now, why did they do that? Because in later years, they brought their children back and they would point out their name and they point out there building and they say I helped build that And I'd like the employees of Northwest Airlines to have that same sense of Pride the same sense of proprietorship as they help to build Northwest over the coming decades. I want them to be able to bring their children and say I helped build that Airline. I talked a lot about relationships. And I recognize that my wife says to me that I am a professional friend. I hope I am but I recognize there going to be a lot of new relationships here. Certainly, I want to build one with their customers. This is not the airline business is not as some would have us believe a commodity business. This is a service business will succeed by meeting the needs of our customers and treating people like honored guests. Now there's another relationship almost unique to the airline industry. And that's the responsibility that we have to the cities and the communities that we serve. Now, this was driven home to me by the probably 400 Community leaders and elected officials who immediately descended on me after we sign this merger. And they wanted reassurance and I did reassure them. We short reassure them as I do you now. We are really grateful for the past support that you've given Northwest and we will work hard to earn your support in the future. I also recognize the importance of our relationship with the federal government. Everybody's Got to Now, I spent considerable time with leaders of the Congress. And of course the d-o-t Sam Center Skinner and I are really becoming great friends. And it has been an interesting relationship and it's been an Illuminating one for me. And it basically confirms. What I do believe is that people really are the same. Both, mr. Skinner and myself and the people I've met in government. We share a lot in common one is a common concern for the well-being of the public. Second is we both want a safe and efficiently run air transportation system. Third. We want to provide Broad and frequent service and lastly we want to be able to compete on a Level Playing Field with European carriers. Now, I'm confident that if we do our job and look at Washington not as an adversary, but as a partner, it's precisely that we will succeed and this is not only critical to our industry. It's critical to all Industries. We've got to start doing what the Japanese are doing. Don't they gang up on us don't you have a public-private partnership and a mutual reinforcing of each other? And I think that's what we need in this country. Not to me business is an honorable profession. It's a vocation those of us who manage businesses share a very sacred Trust. We are participants in the larger community in which we live and I would submit to you that properly understood. There is no difference between the public interest and the private interest. a Calvin Coolidge a Republican Once said that the business of America is business and I'd like to amend that statement. I think the business of business is America. We have to be profitable but to be profitable we have to be useful. Now I've worked with many men of uncommon ability and Enterprise. I found that all of them even the most successful and Powerful. Want to make a difference just like the stone masons in New York. They want to leave their Mark. They want to feel that their efforts have helped to enrich the society. They want to make money sure, but they want to make a difference. Now if we can learn to bring out the best in our people then we will succeed financially and serve our customers well. But we will also have a chance to affect our industry and indeed all of the industry in this way. We will make our mark. Now Northwest is my personal chance to share in this labor. It's my chance to do for my children what my father did for me to serve our employees. To serve our customers to serve the people of Minnesota and the serve our nation. That's why I'm here and that's why I'm going to stay Thank you very much.