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The second annual Distressed Investing Conference presented by The Deal LLC and Turnaround Management Association kicked off with a keynote speech from Harwinton Capital's CEO Jerry York who spoke about corporate turnarounds, value creation, the new found wealth of developing nations and even overpopulation.
Focusing on his work turning around Chrysler, IBM Corp., Apple Inc. and Tyco International Ltd., York said the treatment for the diseases of poor governance and inadequate management are:
Commenting on Tyco, York said the conglomerate was being run as an "acquisition machine" and that "if it wasn't successful in selling CIT in 2002, [CIT] it wouldn't be here today." And in the case of the recently divorced Daimler-Benz and Chrysler he commented that "Daimler totally screwed up that acquisition, there's no reason that couldn't have worked out beautifully." Furthermore Chrysler has never fully addressed "its competitive weaknesses versus its Asian competitors." "Up to now Detroit has been facing the Japanese and Koreans," he said later, "but within the next five years it'll also be the Chinese." When it comes to restructuring a company, York feels that the keys are: "turnarounds are crucial, but it can't be one-time event, it must be followed by continuous improvement." As success stories he pointed out how IBM has transformed itself into an information services company and how Steve Job turned Apple around by focusing on design and offering customers what they want, which helped it gain dominance of digital music sales. York said that "steady state is no longer the norm"; instead "nonsteady is the rule now," and those companies that can change and adjust will be the ones that succeed. York also spoke about the importance of the "tremendous wealth transfer now taking place, the economic center of gravity of the world is moving from North America to the less developed countries in Asia and Eastern Europe." Surprisingly York also touched on the subject of global warming, which he doubts some of the science around. Instead he is concerned about global overcrowding due to populations surges. "At some point, we're going to have to decide who gets what resources," he said. "This is already happening with petroleum, and there's talk about similar problems arising with water; it's going to be a very difficult for businesses that don't adjust early to the changing economic environment." - George White See Distressed Investing Conference agenda Categories Deal Video
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