President-elect Donald Trump has picked billionaire investor and turnaround expert Wilbur Ross to serve as commerce secretary, according to the New York Times. It’s an interesting choice. Ross spent years buying companies in long-suffering industries such as steel, textiles and coal.
In the early 2000s, I did a profile of Ross for Bloomberg Markets magazine. There’s no link available, but Ross had just bought the old LTV steel plants in Cleveland out of bankruptcy and restarted them — albeit with far fewer employees and much less management. It’s a tough business, wringing decades of inefficiency out of these Rust Belt manufacturing companies. As I wrote in my Chronicle column in 2005, it often involves breaking promises to workers that companies made decades ago. And while it may save some jobs in the U.S., it doesn’t mean the companies remain U.S.-based. In the case of steel, for example, Ross ultimately sold to foreign owners.
I’ve interviewed Ross dozens of times since the 1980s, when he was known as “The King of Bankruptcy” for his investments in failed companies. In 1990, he was hired by the bondholders of a failing Atlantic City casino, the Trump Taj Mahal. Ross objected to Trump’s proposed debt restructuring, which would have left Trump holding all the equity. After hearing Trump’s proposal, Ross joked: “It’s a little too early for Christmas.” Outraged, Trump demanded that the bondholders fire Ross. They refused and threatened to throw the casino into bankruptcy. Trump agreed to give up half the equity.
Apparently, all is forgiven. Ross’s contrarian views, his extensive international business experience and his background in turning around struggling companies make him an interesting choice to run the Commerce Department. I haven’t been impressed with many of Trump’s Cabinet-level picks. Ross is the most intriguing choice so far.