How Private Equity Goddess Lynn Tilton Would Fix The Economy

At first you might want to listen to Lynn Tilton’s ideas about boosting U.S. manufacturing just because she’s wearing 5-inch stiletto heels, a tight bodysuit, and her long blond hair is grazing a 8-carat diamond necklace.

Or because she just fired off a comeback like this, from the WSJ’s profile of her:

[When] asked if she was like other private-equity chiefs that “strip and flip” their companies[, she said,]

“You must be mistaken.”

“It’s only men that I strip and flip. My companies I hold long and close to my heart.”

But give her a minute. She’s got some pretty great ideas about how to fix the U.S. economy, and they start with manufacturing, which she calls the foundation of every great empire.

We know it's hard but, take your mind off the whips in her office and the tight leather suit she's wearing

'I am all woman.'

'Sometimes it makes men uncomfortable, sure. But in business and in life, I have to remain faithful to my inner truth. In the end, I'd hope people judge me on my accomplishments and intelligence.'

Source: Wall Street Journal

She commutes most mornings by helicopter from her New Jersey home to Manhattan because 1) she's the CEO of MD Helicopters, one of the 74 companies she owns in full or in part.

And 2) she's a dynamo like that. She wears leather jumpsuits, 5-inch stilettos, and an 8-carat diamond in the office, and when her friends send her whips and handcuffs, she frames them and hangs them on her office wall.

Source: Wall Street Journal

The U.S. needs jobs or there will be social unrest, says Lynne

'If we don't become a country that makes things again, we won't have enough jobs for our people,' she said. 'Without jobs, we could have social unrest. And that's not science fiction.'

She is doing her own part by preserving jobs at her own firms as best she can, she says.

Source: Wall Street Journal

To find them, Tilton recommends the U.S. boost manufacturing

'The key to America's future is manufacturing,' she told the Wall Street Journal.

'We simply have to become a country that can make things again.'

Over the past decade, the U.S. has lost 6.4 million manufacturing jobs, which means the loss of technology, knowledge and the impossible task of restarting production, according to Tilton.

Source: Financial Times

Manufacturing is the key because the U.S. cannot thrive as a service-based economy

'The reality is, in recent times, every great empire has been built on a manufacturing economy,' notes Tilton. 'The fall of every empire has been the failure to remember that one fundamental fact.'

Tilton's point is simple: the country cannot thrive as simply a service-based economy.

Source: Business Insider

For example, look at Brazil and China, two erupting economies with great industrial bases

Tilton points to Brazil and China, which are based on a solid industrial base, when she explains why manufacturing is the way out of the recession in the U.S.

Source: Financial Times

This is because some people aren't a good fit for services businesses, they need to make stuff

There are some people who will never be good fits for services businesses, who need to make stuff, says Tilton.

And if we want a strong U.S. economy, we need to have balance in the types of work we make available to our citizens.

Source: Business Insider

The first step to boosting manufacturing is a govt policy that provides more loans to manufacturers

Tilton is pushing the U.S. to adopt a more coordinated government policy that better supports the country's manufacturers.

She's critical of the Obama administration's bailing out banks while seeming to ignore lending to small and mid-sized companies.

Source: Wall Street Journal and the Financial Times

Tilton proposes that the Treasury allocate unused TARP funds to small companies

Right now, Tilton is trying to push through a program, The Rescue Loans Program (RLP) that would offer loans to small and mid-sized companies using unused TARP funds.

She details the program on her site:

The RLP will exploit unused TARP funding intended for the Public Private Investment Partnership (PPIP) to incentivise qualified private investors to provide rescue financing to companies unable to access the bank loan or credit markets, temporarily filling the lending/financing void left by banks, hedge funds and CDOs. The Rescue Loans Program is not a bailout; it is a direct investment in American jobs.

Other keys are antidumping rules and keeping manufacturing in the U.S.

She also is pressing Washington to better enforce antidumping* rules and to require companies that sell in the U.S. to manufacture in the U.S.

*Not that kind <-- of dumping of course. This kind.

Source: Wall Street Journal

Tilton is an expert because she has taken tons of manufacturing companies on the brink of bankruptcy...

Tilton bought all or part of the following companies in distress:

Ansaldo Sistemi Industriali, Oasis, Old Town Fuel and fibre, Vulcan Engineering, Intrepid USA, REMCO Maintenance, Snelling Staffing, Transcare, Stila Cosmetics, Rand McNally, Natura Water, Jane Cosmetics, Hartwell Apparel, Glenoit/Ex-Cell Home Fashions, Fetco Home Decor, Croscill... and many more.

And turned them into money-making businesses

Tilton has turned almost all of the companies she owns profitable.

For example, she bought MD Helicopters in 2005.

In 2008, the company delivered 53 aircrafts, up from zero in 2005. Revenues are up $200 million since.

Source: Financial Times

How does she do it?

She sleeps only a few hours a night and sips a homemade concoction of clay, salt and chlorophyll.

Whatever works!

Source: Wall Street Journal

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