Carlson CEO Trudy Rautio retires; new management team named

Trudy Rautio, an International Falls native who steered Carlson out of a recession and into smoother economic waters, will retire as CEO of the travel and hospitality giant.

Rautio was only the fifth CEO in Carlson's 77-year history and only the second nonfamily member to run the company.

"As I prepare to leave this organization that has been both work and family to me for nearly 18 years, I am convinced that it is poised for growth and is staffed with great leaders around the globe," Rautio on Thursday told employees gathered in the rotunda of Carlson headquarters in Minnetonka.

With Rautio's departure, the Carlson board also announced the creation of a new management structure featuring separate CEOs for the company's hospitality and travel divisions.

On Rautio's watch, Carlson launched two new hotel brands, sold its TGI Fridays chain of restaurants and took 100 percent control of Carlson Wagonlit Travel, a leading international travel management company.

Rautio, who is 63, did not discuss her plans for retirement, although she intends to remain board chairwoman of Carlson's hotel partner, the Rezidor Hotel Group.

"She definitely left the company in better shape and added some stability and certainty that it needed," said industry analyst Kirby Payne, president of HVS Hotel Management. "She was close to the family and knew what made the company work for the family."

David Berg, Carlson's chief operating officer, will become chief executive of the hotel group, to be called Carlson Hospitality, with responsibilities as well for the Carlson corporate center. Doug Anderson will continue to head the Carlson Wagonlit operation at its Paris headquarters, as he has done since 2008. Both executives will report directly to the board. The management changes are effective May 1.

"Today we are a more focused organization, and our two major business platforms are largely self-sufficient with greater predictability in results and, therefore, more sustainable over the long term," Rautio said in her remarks to employees.

Carlson board Chairwoman Diana Nelson, the granddaughter of founder Curt Carlson, praised Rautio as a mentor and a visionary.

"No one has been a more impassioned advocate than Trudy for my grandfather's dream to sustain and grow Carlson over multiple generations of family ownership," Nelson told employees.

Rautio was named CEO in August 2012, replacing Hubert Joly when he became CEO of Best Buy Co. Inc. Rautio had been chief financial officer for the closely held, family-owned company.

At the time, the travel and hospitality industry was still suffering from a recession in the U.S., a debt crisis in Europe and political hot spots in various corners of the world.

But during Rautio's tenure, the hospitality unit unveiled the Radisson Red brand of hotels aimed at a millennial demographic and the Quorvus Collection of upscale international hotel properties. The company also buffed up the battered reputation of the core Radisson brand, oversaw the international and domestic expansion of the Radisson Blu model — including two in the Twin Cities — and helped launched a more modern version of Country Inns & Suites.

In 2014, Carlson acquired 100 percent ownership of Carlson Wagonlit Travel when it acquired the 45 percent equity stake owned by JPMorgan Chase & Co. The Wagonlit acquisition was financed with proceeds from the sale of Fridays.

Payne, of HVS Hotel Management, said it makes sense from run the hospitality group and the travel group as separate operations that report directly to the board. "That brings more focus on what needs to get done," he said.

In the hotel division, which also includes the Park Plaza and Park Inn brands, revenue rose 4 percent last year to $7.8 billion. CWT has yet to report its 2014 numbers, but in 2013 its sales totaled $26.9 billion.

The company said the revised management structure had been under discussion since the sale of Friday's last May and included Rautio's input.

"The results Trudy and her team delivered for 2014 were outstanding, beating plan and confirming the exciting path ahead for Carlson as we complete our new configuration," Nelson said.

David Phelps • 612-673-7269