The Adversaries : Trump: The investor is driven to hunt game in the corporate jungle.
“What’ll he call it? Isn’t Trump Airlines already taken?”
Those words by a bemused New Yorker symbolized Thursday’s speculation on whether Donald J. Trump--super landlord, sometime slumlord, real estate magnate, casino mogul, occasional yachtsman and all-around deal maker--may next plaster his name on the rudder fins of American Airlines’ vast fleet of airliners.
Since Trump took over Eastern Airlines’ Northeast shuttle last spring and changed its name to Trump Shuttle--the 43-year-old avatar of 1980s excess, New York style, has seemed determined to make his mark in a larger arena. As long ago as last fall, when the Eastern deal was being negotiated, he was hinting at even bigger game--”something very big in the corporate area,” he told one interviewer then.
If his bold bid Thursday for AMR Corp., American Airlines’ parent, succeeds, it would mark Trump’s emergence as a major player in the arena of American capitalism in the 1990s. If he fails, Trump would remain an unusual success story of the glitzy 1980s, thanks in part to a booming stock and real estate market, a fair amount of luck, a lot of nerve and a flair for self-promotion that has, up to now, been unrestrained.
“A little more moderation would be good,” Trump said of himself in his ghost-written, best-selling autobiography, “Trump: The Art of the Deal.” “Of course, my life hasn’t exactly been one of moderation.” Successfully running a major operation such as AMR Corp. would be a major test of whether Trump has learned that lesson, whether or not American Airlines gets the apparently unavoidable new name.
“I put my name on something when I really feel that it is going to be right,” Trump told reporters soon after he acquired New York’s fabled Plaza Hotel, a gem of Beaux Arts architecture and a well-loved echo of a long-past epoch in this city’s history. There are plans to make a few unobtrusive architectural changes, but it is still called the Plaza Hotel.
Many Other Trumps
But there is already a Trump Plaza in Atlantic City, N.J., where the Trump Organization nets millions from gambling casinos. There is also a Trump Castle there. In New York, there is Trump Tower, a glitzy office, condo and shopping complex that brought an indoor waterfall and a suburban shopping mall to a site next door to Tiffany’s.
There is Trump Parc, another condo. There is Trump Air, which flies customers to the casinos. There is the Trump Shuttle. There are a board game and a television quiz game. There is an as-yet-stillborn plan to erect Manhattan’s tallest tower on a disused West Side rail yard--most likely to be named Trump City.
Nor does the glitz stop there. The apartment that Trump, his wife Ivana and their three children inhabit on three upper floors of Trump Tower, an extravaganza of mirrors and onyx inlay, is said in part to have been patterned on a similarly extravagant pad belonging to the Saudi Arabian ex-tycoon Adnan Kashoggi.
Kashoggi, a glitz champion of the 1970s whose fortunes have since declined, sold Trump his 286-foot yacht (now named the Trump Princess) that sails grandly along the Hudson and nearby waters--and, on occasion, floats somewhat less grandly though the panels of the Doonesbury comic strip.
Trump is not exactly a self-made man. His father, Fred C. Trump, now 82, had assembled a $20-million real estate empire in Brooklyn and Queens by the early 1970s, and Donald started out in the family business of running rent control apartment units in those “outer boroughs” of New York.
First Big Venture
But the younger Trump, himself a native of Queens, made his move into the big time during the New York financial crisis of 1975-76 with a boldness that later became his trademark.
Barely 30, Trump persuaded a consortium of banks to lend him the money to buy the decrepit Commodore Hotel from the bankrupt Penn Central railroad and renovate it. He won a multimillion-dollar tax abatement on the property and set about redeveloping it into a glass and chrome extravaganza, the Grand Hyatt Hotel.
Combined with a turnaround in New York’s fortunes and the real estate and stock market boom of the 1980s, that move became the source and model of Trump’s success as a developer.
But Trump has also left a fair amount of wreckage behind him in his climb. In the 1970s and early ‘80s, there were several messy conflicts with lower- and middle-income tenants, many of them members of ethnic and racial minorities, in several of the apartment complexes he owned.
Trump’s efforts to force out rent-control tenants through strong-arm management companies (lobby furniture carted off, broken elevators unrepaired, cars in parking garages vandalized, hallways littered) led to bitter litigation and a good deal of bad press. “Unconscionable,” declared one judge in an adverse ruling. The monthly humor magazine Spy still makes Trump and his wife the frequent targets of its mock-gossip column.
In the early 1980s, there was the ill-starred and quickly forgotten U.S. Football League that ended in red ink and a paper victory in an antitrust suit against the dominant National Football League. The court awarded Trump the symbolic rebuke of a $3 cash award.
In recent years, he has acquired stock--or said he planned to buy stakes--in a number of companies, including Pan Am Corp., Golden Nugget, Allegis Corp. and Federated Department Stores. It was widely speculated that he might try takeovers, but--other than a takeover of Resorts International in 1988--he has not done so, often selling his stock at a profit.
Motives for Deal
Through much of this period there has been his grandiose plan to develop a 76-acre Trump City in the West Side rail yard, a project that has been tied up for years in recrimination, litigation and community protest. Planners, architects and most inhabitants of the West Side shudder at the prospect of the 150-story tower Trump once said he wanted to build. So far, the $5-billion project exists only on paper.
Now, Trump has announced an even-bigger $7-billion project, his run at AMR. What are his motives? Here are two hints:
First, a maxim from the great deal maker, as recorded in his autobiography: “I like thinking big. If you’re going to be thinking anyway, you might as well think big.”
Second, an example from his recent life. Trump Tower is 58 stories tall, yet Trump’s onyx-inlaid triplex, which crowns the building, is designated floors 66 through 68 on the building’s high-speed elevators.
How can that be? Trump, thinking big, ordered that some floors be renumbered higher, so that the building would seem grander to some of its tenants.
ON-TIME FLIGHTS
Domestic airlines reported that 74.6% of their flights were on time in August, a slight decline from July’s 76.9%. The statistics do not include flights delayed because of mechanical problems. On-time flights are those arriving within 15 minutes of schedule.
AMR AT A GLANCE
Destinations served
American Airlines 157
American Eagle* 101
Aircraft (Oct., ‘89)
American Airlines 482
American Eagle* 201
Flights per day
American Airlines 2,335
American Eagle* 1,413
American Airlines
Passengers (‘88) 64 million
Hubs: Dallas/Ft. Worth, Chicago, Nashville, Raleigh/Durham, San Jose, San Juan, Miami
AMR Corp.
Operating revenue
1988 $8.8 billion
First half ’89 $5.2 billion
Net income
1988 $476.8 million
First half ’89 $278.9 million
Assets (‘88) $9.72 billion
Employees (‘88) 77,100
*There are six American Eagle commuter airlines that coordinate their schedules with American’s. Five are owned by AMR Corp.; the sixth, Metro, which serves Texas, is independently owned.
Source: AMR Corp.
Rank August (July) Carrier August July 1 (1) America West 87% 89.4% 2 (2) Eastern 86.9 86.0 3 (3) Southwest 84.6 85.4 4 (4) American 83.6 83.8 5 (6) Continental 79.3 80.0 6 (8) Delta 79.0 79.1 7 (7) TWA 78.3 79.8 8 (10) Pan American 75.9 73.9 9 (5) Alaska 75.8 82.5 10 (9) Northwest 74.6 77.6 11 (12) Piedmont 65.7 67.6 12 (11) USAir 62.6 72.2 13 (13) United 60.3 62.3
Source: Department of Transportation
