Wilbur Ross
Wilbur Louis Ross Jr. is an American businessman who served as the 39th United States secretary of commerce from 2017 to 2021. A member of the Republican Party, Ross was previously chairman and chief executive officer of WL Ross & Co from 2000 to 2017.
Ross ran the bankruptcy restructuring practice at N M Rothschild & Sons in New York beginning in the late 1970s. In the 1990s, Ross was an adviser to New York City mayor Rudy Giuliani on privatization, and was appointed by U.S. president Bill Clinton to the board of the U.S. Russia Investment Fund. In 2000, he left Rothschild to found WL Ross & Co. Ross was a banker known for acquiring and restructuring failed companies in industries such as steel, coal, telecommunications and textiles, later selling them for a profit after operations improved, a record that had earned him the moniker "King of Bankruptcy". Ross has been chairman or lead director of more than 100 companies operating in more than 20 countries. In 2017, Ross became commerce secretary in the Donald Trump administration; at age 79, Ross was the oldest first-time Cabinet appointee in U.S. history.
Early life and education
Ross was born on November 28, 1937, in Weehawken, New Jersey, and grew up in nearby North Bergen, New Jersey. His father, Wilbur Louis Ross, was a lawyer who later became a judge, and his mother, Agnes, of Irish descent, was valedictorian at Sacred Heart Academy in Hoboken and taught third grade in North Bergen for 40 years.Ross attended Xavier High School, a Catholic school, and college-preparatory school in Manhattan. He ran track and was captain of the rifle team. He graduated in 1955. In 1959, he received a bachelor's degree from Yale College, his father's alma mater. At Yale, Ross edited one of the literary magazines and worked at the radio station. His dream was to be a writer. He enrolled in an English course that required writing a thousand words by 10 a.m. every day; after two weeks, he ran out of things to write about and dropped the course. His faculty adviser at Yale helped him get his first summer job on Wall Street. In 1961, he received a Master of Business Administration degree at Harvard Business School.
Business career
Early career
In 1963, he joined what became Wood, Struthers & Winthrop. There, he liquidated the portfolio of its venture capital affiliate.He then worked for Faulkner, Dawkins & Sullivan, an institutional securities research company, where he rose to become president of its investment banking operation. The firm was sold to what became Shearson Lehman.
Rothschild Investments
In 1976, Ross began his 24-year employment with the New York City office of Rothschild & Co, where he ran the bankruptcy restructuring advisory practice. By 1998, Ross was involved in eight of the 25 biggest bankruptcies to date, including Drexel Burnham Lambert, Texaco, Public Service of New Hampshire, and Eastern Air Lines.In the 1980s, Donald Trump's three casinos in Atlantic City were under threat of foreclosure from lenders. Ross, who was then the senior managing director of Rothschild & Co, represented investors in the casino. Along with Carl Icahn, Ross convinced bondholders to strike a deal that allowed Trump to keep control of the casinos.
WL Ross & Co.
In November 1997, under Rothschild & Co, Ross started a $200 million fund to invest in distressed securities. In its first year, it earned a 15.2% return. In April 2000, just before the dot-com bubble burst, Ross founded WL Ross & Co and raised $450 million to buy the fund from Rothschild and make additional investments. By 2003, the fund had averaged a 30% return.In 2006, Ross sold WL Ross & Co to Amvescap.
International Steel Group (ISG)
In February 2002, WL Ross & Co founded International Steel Group. He first agreed to buy the assets of bankrupt Ling-Temco-Vought for $325 million, paying $11 per ton of capacity when other firms were trading for $200 per ton of capacity. A few weeks later, George W. Bush slapped a 30% tariff on many types of imported steel. A year later, WL Ross & Co acquired the assets of bankrupt Bethlehem Steel. As part of the bankruptcy reorganizations, these companies shifted their huge pension liabilities to the government-backed Pension Benefit Guaranty Corporation.Ross had support from the United Steelworkers, negotiating a deal to save some jobs.
In April 2005, WL Ross & Co sold International Steel Group to Mittal Steel Company for $4.5 billion, half in cash and half in stock, and made 12.5 times its original investment. Ross personally made a $260 million profit on his $3 million investment and gained a seat on the board of directors of Mittal Steel.
International Textile Group (ITG)
After outbidding Warren Buffett, who offered $579 million, WL Ross & Co acquired Burlington Industries for $620 million and combined it with Cone Mills in 2004 to form International Textile Group.In 2005, Ross acquired 77.3% of Safety Components International for $51.2 million.
In October 2006, Ross had International Textile Group acquire Safety Components International. Ross controlled both companies and in February 2014, Ross paid $81 million to settle a lawsuit brought by shareholders that Ross breached his fiduciary duty when structuring the merger. International Textile Group was acquired by private equity firm Platinum Equity in 2016.
International Automotive Components Group (IAC)
International Automotive Components Group was formed in 2006 by WL Ross & Co and investment funds managed by Franklin Templeton Investments. In 2006, the company acquired the European operations of Lear Corporation and in 2007, it acquired Lear's North American interiors operations. In 2005–2007, IAC purchased several divisions of Collins & Aikman. In September 2005, investors led by Ross invested $100 million in Oxford Automotive for 25% of the company. In 2006, Oxford merged with Wagon Automotive.International Coal Group (ICG)
WL Ross & Co founded International Coal Group in 2004 after acquiring the assets of several bankrupt coal companies. The United Mine Workers of America protested the reorganization as it led to changes in health care and pensions for the existing employees.In 2006, the Sago Mine disaster, an explosion in a coal mine indirectly owned by International Coal Group, likely caused by a lightning strike, led to the deaths of 12 miners. The mine had 12 roof collapses in 2005, and U.S. Department of Labor data showed 208 citations for safety violations in that same period, including 21 times for build-up of toxic gases. Miners and their families accused Ross of ignoring safety violations. Ross defended his company's management of the mine.
In 2011, Arch Coal acquired International Coal Group for $3.4 billion.
Navigator Gas
By January 2016, WL Ross & Co was the "biggest investor" in Navigator Gas, a liquefied gas shipping company.Overstating of net worth
In February 2017, Forbes reported that Ross has a net worth of $2.5 billion. Financial disclosure forms filed by Ross after his nomination as Commerce Secretary showed less than $700 million in assets, and Forbes later revised his net worth to $600 million.Grift allegations
In August 2018, Forbes reported that Ross's business partners and workers accused Ross of illicitly siphoning or stealing a total of $120 million.In December 2017, a report by two Irish financial analysts, commissioned by Luke Ming Flanagan, an Irish member of the European Parliament, accused Ross of insider trading as part of a 2014 sale of shares in the Bank of Ireland by WL Ross & Co.
Overcharging of fees
In August 2016, Ross agreed to reimburse investors $11.8 million and pay a fine of $2.3 million to settle a U.S. Securities and Exchange Commission probe into the overcharging of fees by WL Ross & Co. The company had self-reported the issue and did not admit any liability.On August 7, 2018, five former WL Ross & Co. employees and investors claimed the firm was charging its investors fees on money it had lost, including allegedly charging fees on one investment that was essentially worthless.
Secretary of Commerce (2017–2021)
Nomination and confirmation
On November 30, 2016, then-President-elect Donald Trump announced that he would nominate Ross for Secretary of Commerce. On February 27, 2017, the Senate confirmed Ross in a 72–27 vote. Ross was sworn into office on February 28, 2017.Ross took office at the age of 79, making him the oldest first-time Cabinet appointee in U.S. history. The previous record-holder was another Secretary of Commerce, Philip Klutznick, who took office in 1980 at the age of 72.
Trade issues
UK trade post-Brexit
In December 2016, after being designated by Trump as his nominee to lead the Commerce Department, Ross said in a speech to Cypriot financiers that Brexit was a "God-given opportunity" for other countries, such as Ireland and Germany, to draw business away from the United Kingdom's financial services industry. In 2017, Ross said that a trade deal with the UK was a low priority for the Trump administration; however, he outlined possible terms. No U.S. trade deal with the UK was concluded, although Ross and Treasury Secretary Steve Mnuchin stated in January 2020 that they hoped to have an "easy" agreement with the UK that year.Tariffs and trade wars
In September 2017, Ross traveled to Beijing as part of efforts to de-escalate the U.S.–China trade war. In February 2018, the Commerce Department recommended an increase of tariffs in aluminum and steel imports. On March 1, 2018, Trump implemented a 25% tariff on steel and a 10% tariff on aluminum imports. In September 2018, Ross said that the tariffs are meant to "modify China's behavior".In 2018, under Trump and Ross, the U.S. imposed tariffs on the import of steel and aluminum from the European Union, Canada, and Mexico. Ross dismissed concerns that the tariffs would increase costs to U.S. consumers, harm the U.S. economy, and damage relations with U.S. allies, saying that tariffs were "blips on the radar screen" and that the EU "will get over this in due course." He also dismissed concerns over EU retaliatory tariffs. In November 2019, Ross indicated that the Trump administration might now also impose tariffs on imports of automobiles from the EU; in January 2020, however, Ross said that the Trump administration might still impose tariffs on European cars despite ongoing trade talks. Also in January 2020, Ross threatened retaliation if the EU adopted a proposed carbon tax, comparing it to a proposed EU digital services tax, to which the administration has also threatened tariffs in response.