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Lynn Tilton wants manufacturing to return to U. S.

December 14, 2011
MANCHESTER — Lynn Tilton, CEO and principal of Patriarch Partners, LLC — the private equity firm that has just purchased a brand-new 100-inch tissue machine designed to make Gorham Paper & Tissue (GPT) profitable — wowed a standing-room-only crowd of some 250 business leaders on Wednesday, Dec. 7, with her keynote speech on "How to Save American Manufacturing" at the ninth annual New Hampshire Advanced Manufacturing and High Technology Summit at the Center of New Hampshire Radisson Hotel.

Gov. John Lynch, who recalled the lesson he had learned in the early 1990s when he headed up Knoll Furniture, then a high-end manufacturing subsidiary of Westinghouse Electric, kicked off the daylong summit whose overall theme was "Growth Through Collaboration." Lynch led the turnaround that brought Knoll out of the red and into the black, he said, by understanding that to make money "costs have to be less than sales."

The governor praised Tilton for putting more than 160 people back to work in the North Country "on the way to 200 to 240."

Tilton, who earned her B. A. degree as a varsity tennis-playing American Studies major at Yale, traced the decline of the importance of manufacturing in North America. Manufacturing accounted for 27 percent of jobs in 1960 and only nine percent in 2009. "This country is broken," she said, noting that its remaining manufacturing base is either struggling or in the process of being liquidated. Tilton said that a segment filmed in central Florida on "60 Minutes," aired on Nov. 27, highlighted that one child in four in the U.S. is hungry and 16 million children are living in poverty. "I am deeply saddened," she said.

The availability of manufacturing jobs would restore dignity to those now unemployed and their families, Tilton said. Basic to success is to understand costs and to seek rationalization and innovation. These are the fundamental lessons that she said she has learned from now owning 76 companies and another 75 previously.

Other countries subsidize manufacturing, Tilton pointed out. China subsidizes the cost of raw materials, which, she said, is far more significant cost savings than its much-touted low labor costs. Innovation and creativity can allow American manufacturing to be successful either making unique products or those things not easily shipped here, Tilton said. U.S. industrial policy must include both infrastructure and education improvements.

"We must bring back our industrial base which includes respect and appreciation for those who make things with their hands," Tilton said, pointing out that that what builds wealth.

"Love of country and patriotism — putting America first" are essentials, said Tilton, adding "loyalty to country, community, company, church and family, taking responsibility for others with our first thought going to other than ourselves."

This great nation, she said, will collapse if it does not face the facts and the truth. The latest unemployment rate has not really dropped from nine percent to 8.6 percent; it only appears that way because 315,000 discouraged workers were dropped out of the denominator used in the calculation, Tilton said. Job creation is, in fact, not even keeping up with the birth rate, she said.

The various free trade agreements have only resulted in about one percent of companies exporting products to other countries, and very few companies make 10 percent of their revenues from exports. Free trade has not helped small- to medium-sized businesses, which are the country's backbone, Tilton asserted.

President Barrack Obama, she said, is receiving his economic advice from those "deeply embedded in Fortune 100 companies that have global footprints" and are not interested in moving manufacturing back to the U. S. Doing so would not be in the interest of their shareholders or constituents, Tilton stated.

"Do I think it can change?" she asked. "Absolutely, but it starts with the truth: we've lost our manufacturing; this economy is not really picking up; we're not looking at falling unemployment. Care enough to look at truth and then rebuild America!"

On hand for Tilton's speech were GPT mill manager Willis Blevins, AVRRDD executive director Sharon Gauthier of Berlin, DRED Commissioner George Bald, state industrial agent at-large Beno Lamontagne of Colebrook, GPT comptroller Ray Heath, GPT and Old Town Fiber and Fuel president Dick Arnold of Old Town, Me., Patriarch Partners managing director John Harrington of Needham, Mass., WMCC president Kathy Eneguess, DRED employees Carol Miller and Kathy Frenette, both of Berlin, and Tri-County CAP economic developer Max Makaitis.

The state Division of Economic Development of the Department of Resources and Economic Development (DRED), the Business and Industry Association (BIA) of New Hampshire, the N.H. Manufacturing Extension Partnership (MEP) and the N. H. High Technology Council presented the annual event.

Martin Lord Osman
Varney Smith
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