by Tom Blair
It was one of those California perfect days, a warm 75 degrees and a bright sun making life and future look secure. Alice and I were drifting down Rodeo Drive in Beverly Hills. I had been in California working on HPA for most of the winter; Alice had flown out to spend a three-day weekend with me. So there we were, strolling past Gucci, Ferragamo, and Zegna. We had just finished lunch at the Rodeo Café, spinach salad and a carafe of white wine. Didn’t want to chance offending the locals by ordering cheeseburgers.
All was well. Wait, what’s that on the left? A boutique auto sales showroom, Selection Export/Import. We’ll just go in and take a quick look. There it was, by the front window, bathed in golden California sunshine. Several middle-aged professionals in their pinstripes soaking in the image. Parked, with Targa Top removed, a polished red, newly arrived Ferrari 308. With tan leather interior and Quattrovalvole engine, sheer sheet-metal sensual.
The salesman, who I later learned was an out-of-work actor by the name of Gregg, shuffled over. “How much?” I asked. “If you buy it today, $49,500. We just had a deal fall through for it and we need the cash flow.” I knew $49,500 was $5,000 below the market. My mind cheerfully ran the calculations. I’ll buy this car and save $5,000. If I buy two hundred of them, I’ll save a million dollars. I quickly decided to save only $5,000. I called my friendly banker and wired the money. An hour after innocently entering the showroom Alice and I were back in our suite in the Century Plaza. Can this be? Did we just purchase a Ferrari? I quickly called my buddy Rigby. He thought it was great; but then he was on his third wife.
I had one bad night; the HPA West Coast pressure cooker got to me. After a 7:00 a.m. Monday meeting in San Francisco I scampered to the airport to grab a flight to LA for a noon meeting. Following several hours of legal Trivial Pursuit with some attorneys and investment bankers in LA, I rented a Hertz-mobile and drove the hundred miles up to Santa Barbara. There I had dinner with a fellow I was trying to recruit for HPA. For two hours I tried to speak eloquently and convincingly as to why he should join the great HPA venture. He wouldn’t commit. After dinner I headed to the Santa Barbara Airport to catch a flight back up to San Francisco so I could plop in my hotel bed and steal six hours of sleep before the next day’s imagined adventure. Damn! Coastal fog, all flights out of Santa Barbara were canceled.
I stood in the beige stucco terminal and stared at the cancellation notices. I had been in high gear since 6:00 a.m. In fact, I had been in high gear for the last six months, whipping between the East and the West Coast like a jai alai ball in a final match. Here I was, stranded 2,500 miles from family, with no way to convey my tired bones to San Francisco, where my hotel mattress longed for my warm body. The cancellations popped my emotional bubble. From a pay phone I called Alice and whimpered for ten minutes or so. She, like most clever wives, had learned long ago that husbands are merely tall children. Sweet Alice verbally patted me on the head and assured me everything would be fine; I should just find a hotel room in Santa Barbara and sleep the good sleep. Having gotten the needed sympathy vote, I hung up and hopped into another Hertz-mobile and averaged seventy miles an hour to the Los Angeles Airport. There I caught the last PSA flight to San Francisco. A little after 1:00 a.m. I was safely tucked in my bed in San Francisco.
That night on the flight from LA up to San Francisco, I stared out the window at the blackness. Every few minutes a cluster of lights from the towns far below drifted slowly by. An embarrassing guilt wrapped me. A few hours before I’d been on the phone to Alice, complaining that life was not fair because I was tired with no way to crawl to my hotel. In each town that slid under the PSA flight that night there were people with real problems: lost jobs, sick children, dying parents. In each pocket of humanity that I glided over many, if not most, would have thanked God to exchange their circumstances with me. In San Luis Obispo, the guy working seventy hours a week in the 7-Eleven, hoping not to be robbed and shot, would gladly assume my role in the play of life. The migrant worker parked on a rural roadside outside of Fresno, with his wife and two kids sleeping in the back of their rusted-out Chevy, would cry with happiness to be given my “problems.” I had fallen into the trap of self-pity. Before descending into San Francisco I put my forehead against the window of the plane, looked up to the stars, and promised I would never again forget my blessings. It was a promise I did not keep.
With an absolute discipline on expenditures and by forcing the revenue engine into high gear, overlaid with more than our fair share of luck, we achieved our earnings target. Yearly profits bubbled up from $40 million to just over $50 million. Of course we weren’t allowed to grade our own papers. The AIG internal audit guys flew down from the Big Apple and scrubbed our numbers; they smiled and concurred. We hit our heroic target; somebody owed me a big bonus.
I didn’t know if I should call AIG and ask, “Where’s my money?” or just wait. I took the Des Moines polite, silent approach. Plus, I wouldn’t have had the nerve to ask if my $2 million bonus check was in the mail. It showed up. No questions, no hesitancy, a check arrived minus withholdings for federal and state taxes. Pride bubbled as I endorsed a seven-digit check and slipped it to the teller with a deposit slip, less $50 in cash.
PATRICK, 1860: It was at the end of my first week with the Mulcahys that I got paid. I was paid a quarter dollar and a half dime. It was the first money I ever had for myself. That night I sat on my cot and stared at the coins in the light of the lantern. I rubbed them together. I held them together. I held them apart. I wiped them clean with my shirtsleeve. The next day I walked through Boston with one hand in my pants pocket holding the quarter dollar and half dime. I walked in big steps with a smile.
We bought the house. After setting aside a little extra from the AIG bonus check for our contribution to Reagan’s national deficit, we gave Pat half a million as a 50% initial payment on my castle. While I had no hesitancy in writing a check for a mega amount, I didn’t have the guts to tell my parents how much we were spending … how much I was spending. Yes, it was my house, not Alice’s; Alice was enthusiastic, but her enthusiasm was for my happiness, not for seven bedrooms, eight full baths, and three half baths. And, let me quickly explain why seven bedrooms required eight full baths … a friend advised that once past the twentieth wedding anniversary there is nothing more conducive to a tranquil marriage than his and her bathrooms.
MILLY’S SISTER, 1903: The ship came to a big city. We walked far. We walked to a tall building. There were many rooms in the building. Our room was up many steps. There was one privy for everyone. It smelled bad.
It was right after Pat broke ground for my grand abode that the gods at 70 Pine Street embraced me. An early-morning call from one of Hank’s cadre of administrative assistants at AIG set the plot, my presence was required at a meeting in LA. The meeting was not of note; rather, the mode of transportation that chiseled the event. I was to rendezvous with Hank and the AIG comptroller, Howie, at the AIG corporate hangar. For five long hours I would be in an aluminum cocoon with Hank.
My initial enthusiasm for being Greenberg’s new travel companion soon morphed to fear. Even though I was a mature businessman with a couple of gray hairs, ran a company with close to a thousand employees, and negotiated hundred-million-dollar transactions, self-doubt first bubbled, then churned. What do I wear for the flight? Do I carry a briefcase? Should I be prepared to brief Hank on the performance of my company? If he drinks bourbon, should I drink bourbon? If he reclines his chair and dozes off, should I do the same, or perhaps should I stand at attention? Am I allowed to use the same restroom that he uses? Does a corporate jet even have a restroom? I felt like I was going on my first business trip years earlier at Bankers Life.
Not wishing to risk being late, I arrived at Teterboro two hours before the planned departure; I quickly located the AIG hangar and deposited myself in their lounge, where I was distressed not to see an AIG aircraft poised on the apron. After a few minutes of panic, one of the young female AIGers advised that the corpor
ate aircraft would be arriving with Hank at our scheduled departure time. Mr. Greenberg was in Hartford for the day, either spreading wisdom or plundering.
At 5:00 it was there. Bigger than anything else on the ramp. Later I learned it was a Gulfstream IV—referred to by those in the know as a G-IV. It was larger and flew further and faster than any of the competing corporate jets. Only the top of the Fortune 500 food chain savored their very own G-IVs. With whitewalls and undercoating, the plane had a sticker price of $20 million. In time I came to think this price was seductively reasonable. After passing the mirrored walls of the galley, one entered the first cabin; here four individual and fully articulated seats awaited Hank and his blessed. In the second cabin another four seats around a conference table, this evening covered with a fine linen tablecloth and set for dinner. In the next cabin a credenza on one side and a double bed on the other. Behind this cabin a lavatory. In the front of the aircraft another lavatory for those whose name was not Hank Greenberg.
A great trip. A magnificent trip. A life-changing trip. Hank, Howie, and I in three of the four overstuffed seats in front, rotated so that we faced each other. An extremely attractive young woman served drinks: “What brand of vodka would you prefer?” After our second drink she offered a choice of three entrées. I ordered whatever Hank and Howie didn’t take. I wanted to make certain they could have seconds, shouldn’t have worried. Once we were comfortably ensconced around the table expansive platters of food appeared, enough to provide sustenance to an African village.
At forty thousand feet, while chasing the sunset, with a bottle of red more empty than full, I heard Hank speak for the first time about things other than AIG business. He talked about the country and how screwed up things were. Everybody else worried about Japan overtaking the United States; Hank said China was a sleeping bear, not Russia or Japan. Hank should know. Other than our ambassador to China, he had spent more time there than any other U.S. businessman or politico.
By the last pour of wine Hank was reminiscing about his youth. As a kid he’d hated the name Maurice Greenberg and stole the name Hank from a famous ball player, “Hammerin’” Hank Greenberg. By the age of eighteen Hank was in the army killing Krauts while they were trying to kill him. Told us it was what made him what he was. Said that liberating Dachau, stepping over women and kids begging for a scrap of food, hardened him up for kicking ass in business.
When we landed Howie and I sped off to the Century Plaza in a limo; I think Hank spent the night in the plane. That night I lay in bed and replayed the flight and pondered the airplane. I used material goals as motivators. That was how I got my Ferrari and the brick monument to my ego. This night I coveted a G-IV. That’s not quite right; I wanted what went with the G-IV. The absolute ability to travel in comfort and efficiency, that’s what I wanted. No connecting through Atlanta or Dallas praying that the inattentive mother with two squirming kids didn’t have the seat next to me.
Howie and I spent two intense days in our LA attorneys’ office negotiating a merger deal. We finished up early the afternoon of the third day, and Howie had the limo driver cruise through Bel Air. Made me recalibrate my opinion of the homes in Potomac. After the tour we swung past LAX and Howie jumped on a shuttle to San Francisco and I darted back to the Century Plaza to have drinks with a potential client. Then I soloed over to the Polo Lounge, where I enjoyed a bold red and an impressive braised lamb while reflecting on my first trip to LA years before, driving around in a Budget rental car. The next morning limo’ed back to the Burbank FBO for a flight home in Hank’s G-IV.
Let me tell you about an FBO. It is one of those codes for people in the know—something like S&C, the Skull & Crossbones of Yale. FBO stands for Fixed Base Operator, this being a small but well-appointed terminal at selected airports. The FBO serves only private jets. No cab lines, no crying babies, no ticket lines, no canceled flights. Only pilots, flight attendants, and aircraft poised at the ready.
On the flight back Hank spent two or three hours with a fellow I had never seen before. A lot of the talk concerning aircraft leasing. I sat dutifully in the back so not to infringe. An hour before descending into Teterboro this fellow told me that Hank wanted to speak with me. It was a good conversation. It was a scary conversation. After fifteen seconds of pleasantries Hank commented that I had hit my numbers. Didn’t say “great job,” didn’t say “good job,” just said that he saw that I hit my numbers. Told me he would expect a $20 million increase the next year. Asked if I could do it. Given that I was in the womb of corporate opulence, sipping a fine wine, negative thoughts didn’t seem appropriate. Appropriateness probably had nothing to do with it, I was just a wimp. But Hank didn’t stop with the earnings target. He told me that AIG had been kicking ass in Asia but was spinning its wheels in England and Spain. Wanted me to take responsibility for developing the health-care portion of AIG’s business in those two countries. Wanted me to have a profitable operation of health-care business in both countries within two years. After the challenges, he served up the carrots. He offered me stock options. He’d grant me 100,000 options if I hit my annual earnings target and another 250,000 options if I got things cooking in Europe.
After we landed in Teterboro I pushed a cab driver to break his record to La Guardia; needed to hop a shuttle down to Washington. Like a cold bucket of water on my face, I sat in the U.S. Air shuttle lounge with a few hundred people, staring at monitors as flights were delayed because of thunderstorms. Took me five hours from LA to New York, took another five hours from New York to Washington.
Sitting in the terminal I had time to dissect and evaluate both my life and my conversation with Hank. From the sale of my company I had a substantial block of AIG stock. It was the kids’ college money and retirement money for Alice and me, with enough left to take care of us for the next twenty years or so if I decided to throw away my briefcase and become a professional badminton player. By hitting my bonus the previous year I got an extra million dollars after-tax. Remnants of it were resting in our savings account until we settled on the house Pat was building. But I had plenty of net worth, even after the mega-house purchase, enough not to worry. Still, I kept thinking. I’d purchased the house. I’d never actually dreamed I could own a mini-estate. Why not the plane? Why not a G-IV for Alice and me? With the stock options Hank was offering, in three or four years I could cash them in for more than the price of a G-IV. Sitting in the U.S. Air terminal with a few hundred of the unclean distorted my logic. I needed a G-IV, a G-IV was in my crosshairs.
One of the problems with business is that while you’re struggling mightily to entice new business in the front door, the competition lures your hard-won customers out the back door. If I was going to burn brain cells on developing Europe for AIG, I needed to station sentries to protect our domestic business. I spent the first month of the new year beefing up our resources on the homefront. HPA was such a critical client—close to a million dollars a month in profits—that I didn’t delegate management responsibility, I kept it; requiring my span of oversight to arch from California to Europe. A lot of frequent flyer miles.
In developing England and Spain, I decided to divide and conquer. Initially I would only go after one. Since my Spanish was limited to no comprendo, I figured it best to target my British cousins first. With only two years to earn my stock options by generating meaningful business in Europe, scooping revenue minnows in Great Britain wouldn’t do. I needed to harpoon a whale.
I spent over a month in England learning the principles of their health-care system. It was different, real different from the United States. No matter how a Brit might try to explain it, their health care was socialized medicine. If a Brit got sick, they went to a government-paid doctor. Everybody got care; that was the good news. The problem was that some of the waiting lines for care were long. By the time some poor sick Limeys got to the front of the line they were dead. It was Britain’s way of rationing health care without ever using the term rationing.
In t
ime my whale broached. It was BUPA, British United Provident Association, based in London. BUPA was the only private health insurance company operating in the U.K. It served the upper crust. People with a grand salary, or a title, could purchase private health insurance and move to the front of the socialized medicine line. A contract with BUPA could be both the foundation for building a British-based health-care business and my down payment on a G-IV.
Quickly I came to like the British. They were polite, educated, and worldly. The latter the result of their owning half the world a hundred years before. Owning being a euphemism for occupying. While the average Brit was a delight, quick witted and uncomplaining with an affinity toward Yanks, at the higher levels of management working with them was frustrating for anyone who had spent a few years in the quick-draw Manhattan corporate world of “What’s the deal,” “Screw you,” and “I’ll wire the money.”
My first meeting with the BUPA president and his senior staff consisted of fifteen minutes of productivity jammed into three hours. One hour was consumed with pleasantries, and the second two hours with a leisurely corporate lunch served on a white tablecloth, with sterling silver and fine china. Only a few oblique references to business, and these were in the stratosphere: “So, what do you Americans think of Mitterrand’s socialist pump-priming programs?” I wanted to counter by asking whether they thought Tom Landry and the Dallas Cowboys were being left behind by the new West Coast offense. But I didn’t; I politely persisted. The upside of the slow pace was that over several months I got to know England and came not only to like its people, but to admire them. After a few unproductive meetings, there was some movement. I felt I could close them.
As BUPA’s management began to thaw, more and more trips to London. My standard conveyance became the Concorde. Of course the Brits never said “the Concorde,” they left out the “the.” So my trips were on Concorde, five scheduled flights a week out of JFK and three out of Dulles. If London beckoned me on a day that there were no flights from Dulles, I would take a helicopter up to JFK.