Carlson Cos.' 77-year-old CEO has mellowed with age, but is still a tough boss

April 05, 1992|By Edwin McDowell | Edwin McDowell,New York Times News Service

MINNETONKA, Minn. -- When Marilyn Nelson describes her father, Curtis L. Carlson, 77, the founder and sole stockholder of the Carlson Cos., she says this: "If Curt were riding a bicycle, he'd pedal downhill."

The remark helps explain why Mr. Carlson, who started at the height of the Depression what would grow into a hotel, travel and marketing company, became impatient last year when the recession seemed to be taking its toll.

Profits fell substantially. But Mr. Carlson wanted more from his company, even though the war in the Persian Gulf and the recession had sent the travel industry reeling.

"We had too much gloom and doom around here," Mr. Carlson explained in a recent interview in his office in this Minneapolis suburb. "People were waiting too long for things to turn around."

Mr. Carlson didn't say it, but it was clear that what he meant by "people" was largely Edwin C. "Skip" Gage, his son-in-law, who in 1989 became Carlson's chief executive and heir apparent.

So, with the suddenness of a South American coup, Mr. Gage was out last November. Mr. Gage says he quit, but the shift has all the earmarks of an ouster. And Mr. Carlson, who just 10 months before had quadruple coronary bypass surgery, was back running things day to day.

He now seems to be grooming his elder daughter, Marilyn, 52, for the top job. Mrs. Nelson, who is married to a surgeon, and her sister Barbara, 49, who is married to Mr. Gage, are in line to inherit the company.

Weathering the recession

Curtis Carlson's gloom and doom could easily be considered joyous boom times at many other companies. Systemwide revenues, including sales at Carlson's extensive franchise operations, rose nearly 15 percent last year, to $9.3 billion, from $8.1 billion in 1990.

And Carlson properties have continued to multiply at a breakneck pace. The company is adding almost 30 travel agencies a month to the 2,100 it already has. It is adding one hotel every six days to the 315 it operates under the Radisson and Colony names. And by 1996, it expects to more than double its chain of 200 TGI Friday's restaurants.

Indeed, despite all the bumps of the past year, Carlson still seems to be on a roll, cushioned from any really painful shocks by its global operations, its minimal debt load and Mr. Carlson's hold-their-feet-to-the-fire management style.

"With their global view and the way they have diversified, they are already major players, and well positioned for the future," said Paul E. Wise, director of the hotel and restaurant management program at the University of Delaware.

Carlson's hotel operation, added Edward Watkins, editor of Lodging Hospitality magazine, "kept its head on straight in the '80s, when everybody else was going overboard."

Many experts now think Carlson is well on its way to becoming the undisputed giant of the travel industry. With a network of 75 companies in 38 countries, Carlson has its hand in virtually every part of the business, posing a vigorous challenge to better-known competitors such as American Express and Thomas Cook.

Travelers need never leave the Carlson fold. They can book plane tickets through a Carlson travel agency, stay at a Radisson hotel, eat at any of several kinds of Carlson restaurants and pay for everything with Carlson traveler's checks or a Carlson credit card.

Beginning May 7, they will be able to book passage on the Radisson Diamond, a cruise ship.

To be sure, the lingering effects of the recession probably are still pinching profits, although the company will not disclose exact figures. The precise financial condition of Carlson is said to be known only to Carlson and a few close associates.

And then there is the matter of who will succeed Mr. Carlson. Though his daughters are in line to inherit the company when he dies, it's not clear whether he will turn over the reins before then.

Mrs. Nelson is vice chairman of Carlson Holdings Inc., parent of the Carlson Companies and the family's investment and real estate arms.

If Mr. Carlson should again have second thoughts about a successor, he could turn to either of his two chief operating lieutenants: Juergen Bartels, 51, the president of the hospitality group, who has been with the company since 1983, and Charles Schmid, 49, president of the marketing and travel groups.

Mr. Schmid, a former senior executive with the Miller Brewing Co., was brought in last summer to prevent any further erosion of profits.

For now, Mr. Carlson is being cagey. "I'm going to stay on for an indefinite period," he said. "I don't want to retire. My daughter is busy learning the business, and she has tremendous capacity. But time will tell where we are."

Taking the long view

Mr. Carlson has been taking the long view almost from the beginning. At the same time, Mr. Carlson, born in Minneapolis with what he describes as "restless Swedish genes," has never been one to wait for things to happen.

"Even now, the idea of coasting just hasn't occurred to him," Mrs. Nelson said about her father.

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