32 Slices
Medium 9781576754139

6. Kick the Tires, Light the Fires

Frock, Roger Berrett-Koehler Publishers ePub

31

Fred was never one to wait around for things to happen. Near the end of the consulting study, Fred began searching for an agency to develop a professional corporate image and logo. At his request, I made several calls to New York firms, but the best price I could get was over $100,000, and that was just too expensive. The company was still months away from startup, and Fred decided to defer development of the corporate image while he attended to other more pressing matters.

Then fate stepped in. Rick Runyon, a young designer from Los Angeles, flew his own airplane, a Cessna 310 to Little Rock on a mission to convince Fred that he was the one to create our corporate image. Rick had his own West Coast graphics company and was responsible for the branding for Getty Oil. He now wanted to do the same for a new airline in need of a dramatic, eye-catching image. Fred was somewhat skeptical, but Rick offered to do the whole thing at his own risk and charge a fee of $25,000 only if Federal Express used his design. It was a generous offer, and one that Fred was pleased to accept.

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21. A General in the Guerrilla Camp

Frock, Roger Berrett-Koehler Publishers ePub

127

Fred decided to take a vacation, his first since the founding of the company. Federal Express was recovering from its past turmoil, but Fred’s problems seemed to be growing. He was feeling the frustration of the past few months; he was unquestionably exhausted from his continual efforts to keep the company afloat and concerned about the embarrassing events of the past few weeks.

Meanwhile, the search for a new board chairman was bearing fruit. While Fred was on his mid-May vacation, the investor selection committee decided they had found their candidate. When Fred got back from his trip, he was informed that the new chairman had already been hired. Fred was angry that the investors hired the candidate without seeking his opinion, yet he accepted the situation as inevitable.

The candidate was 59-year-old Howell M. Estes, Jr., who had been the youngest four-star general in the air force and had run the Military Airlift Command. Following his retirement from the military, he assumed the presidency of World Airways, a charter airline based in Oakland, California. Estes met the general criteria established by the banks: he was a “candidate older than Fred with broad management experience and a background in aviation.”

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13. More Obstacles

Frock, Roger Berrett-Koehler Publishers ePub

71

The commitment to take the remaining Falcons from Pan Am was just two weeks away, but Federal Express was running out of funds and facing a financial crisis. We had fallen behind on the payments to Little Rock Airmotive for the earlier conversions, and the modification center was holding back on the parts stored for the conversion of the remaining planes. Two important suppliers were threatening to close the door on the company, and numerous others were sending menacing messages about past-due bills.

We’d underestimated the capital required for the launch, thanks to the following surprises:

Fred had come up with the initial startup funds. He had done a remarkable job in Washington, convincing the regulators to modify the outdated air taxi restrictions. His charisma and enthusiasm had inspired nearly a hundred associates to pursue his dream. The company would be ready to begin small-package operations in just a few weeks. This was not the time to fold the cards and leave the table. This was the time to ignore the problems and charge ahead!

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25. Three Division Offices

Frock, Roger Berrett-Koehler Publishers ePub

155

My term as general manager of operations ended as the management group agreed to the structure proposed by the board’s executive committee. I was nearing the completion of my three-year employment contract anyway and was relieved that Art would be the one to take over my position. I was confident he would do a good job. Perhaps this was a propitious time for me to move on, but on the other hand, Federal Express was still an exciting company with an improving financial condition. It would be interesting to see what we could do when the company became profitable. It was time to have a serious talk with Fred.

I was astonished when Fred did not even mention the strange events of the preceding days. Estes suddenly no longer existed; gone were his Mercedes, his private parking spot, his papers, and his persona, all without a single comment from Fred. In fact, our meeting progressed as if the resignation threat and the board’s attempt at ousting our founder had never occurred. As far as I know, he never even acknowledged the stand that the management group had taken. I was seeing another side of our leader—an emerging attitude of executive infallibility and a certain aloofness in his personality that left no room for personal gratitude.

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22. Fund-Raising—Round Three

Frock, Roger Berrett-Koehler Publishers ePub

135

It was time to begin planning for a third round of financing. Charlie and Rick Stowe began visiting other venture capital groups in the hope of attracting new investors by midsummer, but they found no takers. Charlie explained, “It was a tough time generally in the financial community. This was 1974 and the capital markets were in the tank.” Charlie realized he needed another source of funds for the third financing.

At his urging, we sent our best, most eloquent and personable ambassador to Paris for a face-to-face meeting with the Rothschild family. Art had a natural ability to charm our harshest critics. Over lunch with Baron Guy de Rothschild, his son David, and nephew Nathaniel at their Paris office, Art explained the mechanics supporting the optimistic growth projections for the company: each new city opening created shipping opportunities from and to every city already in operation. It was a straight numbers game at this point. The baron was impressed with Art’s elegant presentation and decided that the bank would participate if his son and nephew invested their own money, as well. To our relief, they agreed.

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