October 28, 2008
Interview with Richard D. Smith
(Third in Series of 5 Interviews)
Smith's U.S. 'Wealth Creation' Plan
Follow-up to Plan to Create 2 Million New U.S. Jobs
SUNNY: Good afternoon Richard. Once again, we are pleased that you could join us. Richard, last time I checked, the DOW had lost 38 percent year to-date and also dropped below 8,000. Given all the market turmoil we've been witnessing, does your U.S. 'Wealth Creation' Plan still have a chance?
RICHARD: Yes...it does. For two reasons. First, a recession...like the one we're at the front end of... will continue to influence behavioral change. In doing so, today's economic situation creates a greater national willingness to embrace new ideas -- solutions. Secondly, current government 'restore the economy' thinking is top-down -- help the big guys first -- focused. Big guy fixes don't positively impact -- in a sustainable way -- large swaths of increasingly stressed-out Main Street. Our plan is bottom-up focused. Our plan is to resurrect long suffering sectors of the economy, build highly competitive and sustainable businesses operating across the nation, and in the process create 2 million jobs -- resulting in a prolonged cycle of U. S. 'Wealth Creation'.
SUNNY: Give us examples of potential initiative within your Wealth Creation plan. There are multiple initiatives...large and small...correct? And tell us about how this all gets funded.
RICHARD: Actually, small, medium and large initiatives. Let me first point out -- we believe America has the potential to regain its world-class leadership role in various industries and market segments. With that said, to be successful, America needs to re-invent and/or accelerate the transformation of various U. S. industry sectors and companies serving those sectors. Once done, we will have created the basis -- successful business models -- for sustainable business growth, creation of career employment opportunities and, by default, a robust wealth creation machine others business leaders and entrepreneurs can emulate.
SUNNY: Basically, the game plan is to restore and make globally competitive various labor intensive U.S. based industries and businesses.
RICHARD: Exactly. Now, to go back to your funding question -- we view this as a private equity play. We can't buy businesses, hire employees or fix anything until initial funds are secured...available to invest. Available money options include: tapping into billionaires funds, as I described last week; Wall Street firms, who paid over $40 billion in commissions and bonuses in 07...
SUNNY: Wait... Richard...you're talking about the bailed out Wall Street firms?
RICHARD: Yes, the ones who recently budgeted approximately $25 billion for 08 year-end bonuses.
SUNNY: They're getting paid for performance! For tanking the economy! Inciting a global meltdown...
RICHARD: Like it or not...Yes. From our perspective, these Wall Street firms could also directly invest 50 percent of their bonus money into our national Wealth Creation plan -- in exchange for an equity stake. We could do a 'Blank Check' private or public securities offering where we'd have greater freedom to invest as we see fit to meet our strategic objectives. And several others...
SUNNY: I like the idea of Wall Street taking an equity stake. Very interesting...
RICHARD: To your question about examples of target investments. We'd stay away from Energy -- Pickens Plan has that covered. Infrastructure projects -- expect the Federal government to make a $200 billion commitment there. And we're not into seasonal workers...farming, etc... We have, for example only, looked at commercial bus manufacturers and the Automotive sector. Viper and Hummer business units are for sale. GM looks to be pushing for the elimination of Pontiac. Currently, there is considerable speculation that Chrysler will merge or die. Should Chrysler go Chapter 11, buying assets and facilities could be bottom-feeder cheap. Laid off skilled workers would be available as would affiliated automotive suppliers who have closed or face closure. Keep in mind...we believe in innovation, creating and delivering best-in-class high-value to end user customers. We also believe, once the infrastructure is in place the company or brand can be eliminated and a new identity can be born.
SUNNY: You're looking hard at automotive?
RICHARD: No...just an example. The point here -- there is nothing to say we could not create a new brand...much like Toyota's Lexus launch in the 80's. We also have some very creative plans for eliminating vehicle inventories and modifying dealer networks. And we have not forgotten automotive suppliers. We believe several of those are ripe for innovation and restoration too.
SUNNY: What are some other examples.
RICHARD: E-Waste Recycling. That's recycling of technology products from TV's to VCR's, computers, cell phones, etc... Today, this industry is unregulated and generating $3 billion a year via 1.200...plus or minus...mom and pop or small businesses. The industry, by most accounts is not environmentally friendly while exporting much of the collected junk to China -- in violation of the law. Could create a FedEx quality and 'Ultra-Green' version of e-waste recycling. Small feeder operations nation-wide. Objective here, solve a business problem, create green value, hire entrepreneurial employees, and grow business value with a sustainable business model. Other opportunities exist in the wireless, digital-media, technology, and other more futuristic segments.
SUNNY: What are the most critical short term issues you face?
RICHARD: Money and direct dialogue with state governors -- members of their staff -- about opportunities within their states.
SUNNY: Are you getting positive feedback from any Governors.
RICHARD: All are interested in new ways to develop and grow their respective economies. All are dealing with budget cut issues. And, unfortunately, all seem to be focused on the current election cycle. You know...are they in or out.
SUNNY: Richard...thank you so much. It's exciting to listen to you. Your passion for the Wealth Creation plan and moving the country forward economically is amazing. Anyone -- prospective investors, governors, economic development officials, mayors, entrepreneurs, executives, and professionals -- who want to help Richard should visit his Web site www.SMITH-TRG.com or E-mail him at RDSmith@SMITH-TRG.com
RICHARD: Sunny, the pleasure has been all mine.
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