SMITH-TRG

Time to Re-Invent America, Create Jobs
Follow-up to Plan to Create 2 Million New U.S. Jobs

SUNNY: Good afternoon Richard. Welcome to our show and good to have you back. Richard, what makes this 'Wealth Creation' plan of yours so important?.

RICHARD: The consequences without it. The impact. America needs a plan to re-invent our enterprises. We need to build job creation machines. Near term impact, which we see evidence of everyday, -- growing unemployment across all age groups, deferred prosperity for the masses, and lost American dreams for millions. 

SUNNY: Richard, with a new President-Elect, Barack Obama, and the economic indicators becoming increasingly bleak -- is your 'Wealth Creation' plan still viable?

RICHARD: Without question, Yes! The numbers clearly demonstrate the need. Over 240,000 employees lost their jobs in October. National unemployment is at 6.5% and increasing. October retail sector results are simply awful -- same store sales declined by 0.9 percent. High-end retailers biggest percentage declines. Detroit's big 3 auto makers saw their vehicle sales plummet when compared to October of 2007. Specifically, GM down 45.4%, Ford down 29.2% and Chrysler down 34.9%. Toyota also say a drastic decline of 23%. No hot auto segments or really hot products. Manufacturing sector is operating at a 26 year low...exports markets drying up as global economies wrestle with same issues -- recession. 

SUNNY: So what is the lynch pin to all this grim data that continues to pile up?

RICHARD: Access to capital. I keep looking for serious lending action by financial institutions but can't find it. What I do see are reports of cash hoarding and tightened business and consumer credit requirements.

SUNNY: Richard, how can your re-invent America 'Wealth Creation' plan have any impact if you or others can't gain access to capital?

RICHARD: If President Bush, President-Elect Barack Obama and other Congressional and state leaders reach consensus -- the nation's primary mission now is to build an environment conducive to job creation. This non-partisan consensus needs to be communicated to Wall Street and Main Street. Sunny, don't misunderstand me -- I'm in no way suggesting that is not already their focus or concern. I am saying they should take the view that re-inventing key segments of the private sector is the primary path to sustainable economic recovery. As the American economy goes, so goes other economies world-wide.

SUNNY: Is what the government has been doing helpful to your cause?

RICHARD: Most defiantly. Their work with the Fed and Detroit auto makers is good work. However, a more nationalistic view to a solution is in order. Our 'Wealth Creation' plan is a logical extension of their work and a vehicle to start driving job creation. As I've said before, the sooner we have more people working, taking care of their own needs while paying reasonable taxes, the sooner the entire economy recovers -- we leave the recession behind.

SUNNY: Can your plan do the job?

RICHARD: Our original plan, limited in size and geographic scope, would not be a 'silver bullet' solution for the nation. However, a much larger and broader plan that addresses the job growth needs of every state...would be more appropriate.

SUNNY: Are you saying the government needs to intervene? Create some massive program?

RICHARD: Somewhere in the plans mix the government needs to play a role. And not necessarily one that says -- do another economic stimulus package for $150 or $175 billion dollars. Avoid $500 or $1000 dollars in tax rebate checks to individuals. Instead, provide $50 billion in loans and/or direct investments in non-FORTUNE 500 enterprises with specific plans to re-invent companies within various sectors and segments. 

SUNNY: And these companies would have to be focused on becoming market leaders and job growth machines?
 
RICHARD: Correct. No money should flow to the likes of private equity firms. Best known examples... Blackstone, Carlyle Group or others. They demonstrate a penchant for job reductions and foreign outsourcing. Perhaps a separate fund of $75 billion could make money available to strategic industries like the domestic auto.

SUNNY: Net net...if I understand this correctly, you're proposing a nation-wide version of your 'Create Wealth' plan business model. Re-inventing America programs would take place in each state.

RICHARD: Yes. At the state level, we or others like us would work collaboratively with Economic Development departments to identify,target and help high-probability candidates for re-invention success.

SUNNY: If recent experience is an indicator, any strategic government involvement -- funding or economic development -- would by its nature invite lobbyists who will inject themselves. The issues of politics...which party do you belong to...will come into play.

RICHARD: With President-Elect Barack Obama, perhaps we can get beyond that, put America's welfare first. Will need to eliminate or minimize the 'time-to-market' impact these potential territorial conflicts could cause.

SUNNY: Are you optimistic about Obama?

RICHARD: Yes, I'm very encouraged. President-Elect Obama has stated his support of $50 billion for U.S. auto to re-do factories to produce industry leading fuel efficient vehicles. He's also said he wants to sit down with auto CEO's and union leaders to hear they're plan for solving the problem. His approach could be simple, yet quite effective, no agreed to plan...no money. In many respects, the 'Wealth Creation' plan has the same underlying approach to economic resurrection -- re-invent, succeed, grow or die. You die...no money!

SUNNY: What do you consider the fastest way to drive job growth?

RICHARD: Parallel approach. Help a few select large companies and a much larger number of smaller companies. Small companies would be ones with 50 or more employees.

SUNNY: Is all this going to be simple?

RICHARD: Not at all. Now, the biggest challenge is getting our message out. Next challenge -- getting the right support, leadership and management. Securing a collective commitment that this 'Wealth Creation' plan is a viable option.

SUNNY: For the last twelve months the business community has advocated their own remedies to the exonomic environment. They included: one, a stimulus package -- in varous shapes and forms; two, national energy independence programs; three, lower taxes; four, a more competitive trade environment; five, lower health care costs. Do these needs somehow conflict with or diminish your plan?

RICHARD: They are all related to the sames cause --improve the business climate to motivate companies to hire people. Our core issue is the need to re-invent the way companies do business going forward into the future. Generally speaking, because there are so many exceptions, the way U.S. businesses have operated in the past minimizes their sustainability. Many companies need to change the way they do business -- they need to be transformed.

SUNNY: Are you suggesting these companies have incompetent leadership?

RICHARD: Not at all. What I believe -- and I think the data reflects this -- many companies across industries have gone out of business because of the way they were structured or conducted business was ineffective. They lost their end-user consumer focus, delivered little or no value, and had a tendency to compete solely on price. Consequently, I believe they exited their business prematurely. Though I must admit, market trends that began three plus years ago created an exceptionally challenging business environment.

SUNNY: Why then, given all the bad news we're seeing and reading, is now the time to re-invent?

RICHARD: During the next few years countries in the EU, Middle-East, Asia and else-where will address their wounds. To get their financial legs back they will focus on selling goods and services first within their boarders. Once stronger, they pose a competitve market threat. To minimize this jobs destructive threat, America today needs to build competitive companies for tomorrow.

SUNNY: Richard, once again it is time to bring our session to a close. On behalf of The Sunny Idiot Show, thank you for agreeing to do this five interview series on the creation of 2 Million net new U.S. jobs and Wealth Creation for the nation. Viewers -- If you are interested in helping Richard, I encourage you to e-mail him at RDSmith@SMITH-TRG.com.

RICHARD: Thank you for having me. I've had a wonderful time. And, I do look forward to fielding e-mail questions about the 'Wealth Creation Plan'.

SUNNY: Good-bye and best of luck. Viewers...Give it up for Richard D. Smith, SMITH-TRG founder and business performance consultant. Happy trails, Richard!