While Delta Air Lines was tailspinning deeper and deeper into a financial crisis in 2004, no one would have blamed Gerald Grinstein for turning a blind eye. He had already put in his time at Delta, having been appointed — as CEO of Western Airlines — to Delta’s board of directors in 1987, when the two airlines merged.

At 71, he was finally enjoying a well-earned retirement. However, “the thought of Delta disappearing was just unacceptable to me,” he said. Perhaps it was his long history with the airline that compelled him to lead the $38 billion company out of bankruptcy.

Or it could have been his “genetic flaw,” as he jokingly calls it. “I’m the patron saint of lost causes. It’s St. Jude, isn’t it? I always thought St. Jude had converted to St. Jerry.”

Whatever the reason, his carefree days of retirement were quickly replaced with executive meetings, spreadsheets, many tough decisions — and managing 47,000 employees.

“A friend told me that leading a company is a lot like being the groundkeeper at a cemetery. There are a lot of people under you but no one is listening,” he said with his trademark wit. This time around, though, he needed everyone sitting up and paying attention.

He promised open and honest communication and made himself visible. One of his first acts, as CEO, was to go where few Delta executives had ventured: the employee cafeteria. Grinstein was on a “campaign of sorts” to eliminate the “us and them” mentality that existed.

“I had to go out and let people ask me questions. I had to show them that I was truly concerned,” explained Grinstein. “It’s important to meet with your people on a regular basis. You must put yourself on the line.”

Leaders, Grinstein says, come in all shapes, sizes, and temperament. Some are “take charge” and are always walking around while others are quiet and desk bound. “I don’t think there is any set leadership style except that you really have to be yourself. Realize that those under you are watching everything you do and can spot a phony a mile away.”

Whether it’s good news or bad, he said it’s important to let people know what is happening in the company — as far in advance as possible. “Schedule as many face-to-face meetings with your team as you possibly can. Although you may not be able to sit down with every single employee, there is a tom-tom effect, and word travels.”

Morale at the airlines was at an all-time low, due in part to the controversy that erupted over the excessive retirement plan and cash bonus given to Leo F. Mullin when he stepped down as CEO. “I was truly coming into a toxic situation,” said Grinstein.

Authentic Leader
He thought he had a unique advantage. Many of the employees who had previously been with Western now worked for Delta. They knew Grinstein was a straight shooter. “One central ingredient you have to have in order to be successful is trust between management and those delivering services. I knew I had to earn it but I thought I had a good chance because I thought Western people would say good things about me. I thought trust could be re-established.”

Grinstein’s authenticity has always served him well. It’s what propelled him to the position of president at Western Airlines in the 1980s. According to airline policy, as a member of the Western Airlines board of directors, he always flew first class. One particular flight was oversold and he volunteered to gave up his first-class seat for another passenger and sit in the back of the plane. Larry Lee, who was being courted to return to the airline, happened to be on the same flight and witnessed Grinstein’s offer firsthand. Taken by his down-to-earth attitude, Lee agreed to become CEO with the proviso that Grinstein would become president.

Getting Delta back on course during its bleakest time could conceivably have been the biggest challenge he ever faced, but Grinstein says every job comes with its own set of challenges. Before running Delta, Grinstein was chairman and CEO of railroad giant Burlington Northern.

“Each challenge is unique and emotionally draining and comes with a huge commitment to the people you are working with. Delta is such a prominent company and is composed of such wonderful people — there was passion involved. It certainly was the most intriguing business problem I’ve ever seen. The company needed a huge transformation.”

He granted himself an annual salary of $450,000 with no bonuses or stock options of any kind, well below the multimillion-dollar compensation packages Mullin and his top executives accepted at the same time Delta was hemorrhaging billions of dollars.

Postponing the Inevitable
Grinstein embarked on a number of aggressive cost-cutting measures, including a major out-of-court restructuring of the company’s long-term debt and outsourcing of some heavy aircraft maintenance and ramp handling operations. He successfully negotiated with ALPA, the Delta pilots’ union, for deep concessions in order to help the company stave off bankruptcy.

Although these initiatives were largely successful, upward pressure on fuel prices and fierce competition from low-cost carriers continued to keep Delta perilously close to bankruptcy. Hurricane Katrina caused a dramatic spike in jet fuel prices in Atlanta, which houses Delta’s largest hub operation. Delta, which had previously sold its fuel hedges in a move to raise cash, was forced into an untenable cash position. On September 14, 2005, Delta and its subsidiaries filed a petition for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. At the time of the bankruptcy filing, Delta’s total debt was approximately $23.8 billion.

During Delta’s bankruptcy, Grinstein and his management team accelerated the restructuring process that they had started in 2004. He successfully negotiated a second concessionary agreement from ALPA, imposed a second round of pay cuts on nonunion employees, and froze the nonunion employee pension plan. He reduced his own pay by 25 percent, to approximately $325,000 per year.

In November 2006, US Airways launched an unsolicited hostile takeover bid for Delta, which Grinstein and his rank and file employees successfully fended off.

When Delta successfully emerged from bankruptcy last April, it was both financially sound and well-poised for the future. Analysts applauded its rapid transformation into a modern, competitive carrier. Unlike other companies in bankruptcy, Delta managed to restructure its operations while avoiding prolonged battles with unions and other creditors.

Compensation of a Different Kind
When an airlines emerges from bankruptcy, management traditionally receives a handsome financial reward. But Grinstein would have none of that. With the approximately $10 million he could have expected to net for himself over approximately three years, he set up two funds; one for scholarships for the children of Delta employees to go to schools they might not be able to otherwise afford, and the other for emergency hardship assistance for employees and retirees.

“Like a salmon that returns every four years,” Grinstein left Atlanta, where Delta is based, and retired back to his home in Seattle, with nothing but the grateful appreciation of millions. “I’m not driven my monetary gains or at my age by career validation. My life is not measured by how many clubs I can belong to, or by how many houses or boats I can own. My goal is to leave things better than I found them.”

These days, he spends his mornings walking his Black Lab and brown and white Springer in his neighborhood of Bellevue, east of Seattle. “I went from running a $17 billion company with more than 50,000 employees to walking two dogs in the morning and picking up their poop … although I’m not sure if that’s truly any different from running a company.”

Did he aspire to become a CEO? “Not really,” he said. “I started as a lawyer on Capitol Hill. That expression ‘Life is what happens when you are planning something else’ has certainly been true in my life.” After graduating from Harvard law school, Grinstein ended up working for Washington’s legendary and powerful Senator Warren Magnusson. Although he enjoyed law, he became fascinated with the transportation industry.

Not on the Radar
Today, he is disheartened that the presidential candidates have not made the current state of the airline industry a pressing issue. Thanks to Wilbur and Orville Wright and their adventures on the Outer Banks, North Carolina is known as “first in flight.” Warren Buffett has pointed out that the airline business in the United States has made no money and that if there was a capitalist on the Outer Banks that day, he would have shot down Wilbur.

Grinstein agrees. “Like Buffett said, Wilbur should have been shot down.” But on a less sarcastic note, he said it’s going to take a lot of work to stop the bleeding in the airline industry. The present-day air traffic control system is archaic and needs a complete overhaul.

He feels that Congress should create a committee dedicated to improving all aspects of the airline industry. “Congress has looked at safety, which is important, at delays, and at the amount of time people spend on runways. They need to look at this entire industry that has not performed well in the past … to put measures into place to ensure that it performs well in the future. Plus, there are many obstacles ahead. Fuel is going to rise to $100 a barrel. Open skies are coming and there will be much more competition from the international market.” He conceded that perhaps consolidation is the right step.

When asked if he would ever consider taking the plunge into politics, with a focus on straightening out the airline industry, his self-deprecating sense of humor kicks in. “No. I’m 75. Plus there is not much demand for somebody who looks like a Q-tip.”

In his immediate future is a trip to Argentina to “chase trout. It’s catch and release, similar to me in the airlines industry,” he said with a laugh. When asked what he would like his legacy to be, he quoted Warren Buffett again. “I want my tombstone to read, ‘Here lies a very, very old man.’”

Grinstein's Take on Today's Meetings and Conferences

"In this era where things are changing at such a rapid rate, meetings can't be complacent," Grinstein said. "The old saying goes, 'If it ain't broke, don't fix it,' but that's not the right way to think about business anymore. Things are broke even when they don't seem to be. "People want to be stimulated and challenged. Things are happening so quickly. Who the hell would have thought there would be such a demand to have 10,000 songs in your pocket? Today's meetings must challenge people to think. Themes like, 'We're on the Road to Success,' aren't going to cut it anymore."

Grinstein Honored by PCMA

In recognition of his "exemplary work and selfless dedication," PCMA selected Grinstein to receive its 2007 Chairman's Award. He was honored in person at PCMA's 2008 Annual Meeting, on Jan. 16 in Seattle. "At a time when the airline industry continues to be pressured on all sides by fuel costs, labor disputes, customer satisfaction and security concerns, Mr. Grinstein has set an example above and beyond his peers," said Sharon DelaBarre, CMP, 2007 PCMA chairman of the board and owner of DelaBarre & Associates. "He could have ignored the problems within the industry and Delta specifically, but instead rolled up his sleeves and went to work. I can't say enough about the strength of his leadership, not to mention the positive example it has set for the rest of the airline industry."

Andrea Doyle is Convene's senior writer. The Leading by Example series is sponsored by the Canadian Tourism Commission. Visit its Web site at www.meetings.canada.travel.