On Wednesday, Jan. 18th, Wilbur Ross, a billionaire investor worth $2.5 billion, will be testifying at a Senate confirmation hearing vetting him as the next U.S. Secretary of Commerce. But what lies in Mr. Ross’ background that makes him a good henchman for Pres.-Elect Trump?
First, he is a “distressed asset investor,” which is just a nice way of saying Mr. Ross is a “vulture investor.” He buys up distressed companies who are on the downturn, makes steep cuts (including ones to employee benefits) and flips it to the tune of large profits. Like his future boss, he specializes in bankruptcies.
Second, Mr. Ross has specialized in distressed coal and steel companies in Appalachia and the Rust-Belt making investors and himself very wealthy with his financial dealings. But on the other hand, their have been great tragedies laid in Mr. Ross’ la. In what is now called the Sago Disaster, 12 miners perished in 2006 after a large explosion inside a West Virginia coal mine. A following investigation determined the tragedy was preventable.
Also, Ross was involved with a water polluting disaster in the Ohio Valley which his company, International Coal Group (ICG), had to pay $575,000 in fines.
Third, during the Great Recession, his new WL Ross & Co. business group began flipping financial institutions, like failing banks, for huge profits. But in Aug. 2016, they paid the SEC $2.3 million dollars in fines for violations in that industry.
Here’s a telling quote from a Forbes’ bio piece on Mr. Ross,
His turnaround tactics have been controversial at times. While some view him as a savior, risking millions to revive firms that might otherwise go out of business, others have called him a “vulture investor” for preying on weak companies, sometimes slashing jobs and pensions to turn a profit.
You decide...