James J. Murren
Chairman and Chief Executive Officer, MGM Resorts International
Excerpt from remarks to Boston College’s Chief Executives’ Club of Boston
December 5, 2013
TAKEAWAY: Weathering the recession
But in every place that we call home—and what I’d like to touch upon today is that we are committed to a set of values that define who we are and what we do—diversity and inclusion, philanthropy and community involvement, environmental responsibility and sustainability. And it might seem odd to you that a company based in Las Vegas would feel that way, but we do. And I’d like to tell you why.
I did become the chairman and CEO back in 2008. And yes, we were a year away from completing CityCenter, but we were probably also a year away from going bankrupt. The financial markets were frozen, as you recall. Some of my best friends who live here, who I’ve known since the ’80s, that run mutual funds here were calling with nothing but empathy. I hope you’re OK, Jim. Doesn’t look so good out in Las Vegas.
I think that that time was the most searing time of my life. It was a time when we really had to take stock of what we were doing and many mistakes that we had made as a company and as an industry, the hubris of doing so well from the year 2000 and, well, 1998, when I joined, to 2007, our stock went from 10 to 100.
We could not do anything wrong, even though we were doing everything wrong. We did not have the kind of corporate culture we should have had. We were spending money in the wrong places, we were fat in many areas, we had destructive conflict within our organization, all of which was completely unknown to our investors because we were doing so well. But of course our day of reckoning came with the recession.
All of the advisers that I had, some of which are based here, when we hit the recession, said to me, you’ve got to shut down CityCenter. You’ve got to stop the bleeding. You cannot survive at MGM Resorts with this 50 percent unconsolidated joint venture that was bleeding cash trying to be built.
And had I taken that advice, CityCenter would be a rusting hulk of a construction project today, and MGM probably would have followed itself into Delaware and bankruptcy maybe six months after that point. But I had 10,000 construction workers working on that site, and I had 50,000 employees in Las Vegas working for me at that time. And I just didn’t think that that was an acceptable option. And so what we tried to do was just buy ourselves time. It’s a lesson of the recession. I didn’t know how it was going to end. It turned out to end well.
But I did know that relationships do matter. We had very strong bank relationships and the legacy of Mr. Kerkorian helped us quite a bit. I did know that we had a lot of courage displayed every day with our employees that were counting upon us so that they could make their car payments and house payments. They were worried about their jobs, but they were taking care of the customers because, let’s face it—no one has to go to Las Vegas. No one has to go to a luxury hotel. And if you have a bad experience, you might not tell me. You just won’t come back, and you’ll tell your friends never go. It’s all about the customer experience. And therefore it’s all about the employees that create the customer experience.
I think we’ve learned, most importantly, to be that kind of company that has had that kind of near-death experience and has tried to take stock of that with that new lease on life that we’ve been given. And I intend, for every day that I’m at the company, and I hope it’s for many years to come, to never forget where we were only four years ago. We are stronger. I think we’re more resilient. We were humbled greatly by the recession.