In the late 1970s, Alfred A. Checchi, then treasurer of Marriott Corp., unsuccessfully urged the hotel chain's chairman to buy an airline.
On Monday, Checchi followed his own advice, outbidding several well-financed competitors to become the new owner of Northwest Airlines.
The deal is the first major acquisition for Checchi, 41, a one-time strategist for the wealthy Bass family of Ft. Worth, Tex., who organized an investment firm in Los Angeles a year ago. By forging an alliance with two former Marriott colleagues, an Australian conglomerate and a Dutch airline, Checchi outmaneuvered such takeover veterans as billionaire oilman Marvin Davis and Minneapolis financier Irwin Jacobs.
It was a difficult contest that Checchi likened to "giving birth to an elephant." But as he takes control of the nation's fourth-largest airline, he won't necessarily find smooth sailing ahead.
For one thing, it's not likely that Northwest's unions will embrace Checchi's financing plans, which call for borrowing $3.35 billion. The pilots expressed displeasure Monday and vowed to strike if it turns out that Northwest's financial health is at risk. Though less militant, the International Assn. of Machinists is likely to be upset that its bid for the airline was rejected.
And airline industry analysts were skeptical that Checchi can keep NWA intact. Most analysts assumed Checchi would sell NWA's Japanese real estate, valued at $300 million to $500 million, and would possibly refinance the airline's fleet of 313 planes.
For Checchi, the acquisition of Northwest caps a career that began in 1976, when he joined Marriott after graduation from Harvard Business School. He rose quickly through the corporate ranks. As treasurer, he came up with a new way to finance Marriott's growth. By selling hotels to investors but continuing to manage them under contract, Marriott kept construction debt off its books. Working at a hectic pace with then-President Frederic Malek and then-Chief Financial Officer Gary Wilson--both investors with him in the NWA deal--Checchi helped fuel a 20-fold increase in Marriott's market value.
While at Marriott, Checchi encouraged Chairman J. W. Marriott Jr. to buy an airline. As one of the largest airline caterers, Marriott could supply the airline with food, as well as offer travel packages. Marriott rejected the idea, deciding instead to focus on restaurants and lodging.
Nonetheless, Marriott was impressed with Checchi. In a 1987 interview with the Los Angeles Times Magazine, he called Checchi "a brilliant guy . . . one of the four or five smartest people I ever met."
In 1982, after his wife lost a baby in childbirth, Checchi decided to slow down and accepted an offer to join the wealthy Bass brothers as a financial adviser. Soon, he became an integral part of an investment trio that included top Bass advisor Richard E. Rainwater and billionaire Sidney Bass. Working closely with Rainwater, Checchi involved the Basses in lucrative deals with Texaco Inc., Arvida Corp., and Walt Disney Co.
Intense and serious, Checchi meshed well with Rainwater, whose style was more relaxed. "They worked as a team," said Stanley Gold, a lawyer for Roy E. Disney, who engineered a 1984 coup at Disney with help from the Bass brothers.
Checchi's specialty was raising money for unusual deals. While with the Basses, he raised more than $1 billion for an investment fund that put its money in high-yield, high-risk "junk" bonds. That fund, known as the Airlie Group, played a role in the Northwest takeover drama by backing Pan Am's bid for the airline.
A perfectionist outside the office, Checchi once spent five hours honing his golf swing before a tournament five years ago. He approached the guitar with the same determination, toting the instrument to his office in Ft. Worth, where he took private lessons. An avid jogger, he ran with Rainwater in the 1982 New York Marathon.
Checchi was well rewarded for his work on behalf of the Basses, earning, by some accounts, as much as $50 million. Eager to accomplish something on his own, Checchi left the Basses in 1986 and came to Los Angeles. He took up residence in Beverly Hills in a $3-million home across the street from Wilson, who is also chief financial officer of Walt Disney Co.
When he first came to town, Checchi considered a political career. He discussed his aspirations with a number of prominent Democrats, including former national committee Chairman Robert Strauss, and California Assembly Speaker Willie Brown, but was unable to find a niche in government. Checchi gravitated back to financial dealmaking.
With a Harvard classmate, Checchi formed a company that develops subsidized housing. The company, the Bedford Group, is developing 10 residential projects under contract with various government agencies, according to Checchi's partner, Charles O. Quarles.
Quarles said Checchi got involved in public housing because "it tapped into his social conscience."