CI VIEW: GOP convention: Small and mid-market CEOs eye growth as big business retreats

By PK Semler

Special op-ed contributor

CLEVELAND, Ohio – Small and mid-market CEOs attending the Republican National Convention proved that American small business owners are made of stronger stuff than politics or big business.

[EY chairman and CEO Mark Weinberger at Bipartisan Policy Center event during Republican National Convention in Cleveland. July 20, 2016 (This and all following interviews were conducted using Google Glass.)]

At the RNC Convention in Cleveland that nominated controversial real estate mogul Donald J. Trump, CEOs and owners of small to medium-size companies turned out, while the CEOs of major corporations mostly took a pass, with the very notable exception of EY Chairman and CEO Mark Weinberger. Weinberger said he was in Cleveland to show his support not only for the city of Cleveland, but also for small and medium-size businesses across the U.S.

Weinberger said EY’s support is strategic for the international corporate and tax advisory firm, as smaller firms lead to lucrative transactions with Fortune 500 companies.

“Small to medium-size companies are our bread and butter in the Cleveland marketplace,” Weinberger said. “[SMBs] work with large companies, and it is not big versus small, [as] supply chains all come together.”

Weinberger, who received his JD and MBA from Cleveland’s Case Western University, does not exclude moving EY’s corporate headquarters back to Cleveland, where EY was originally founded.

Cleveland’s unique competitive advantages include having a low-cost base, dynamic cosmopolitan labor force. It’s also home to the headquarters of major international companies such as the Cleveland Clinic and Fortune 100 companies Progressive Corporation, Goodyear Tire & Rubber, First Energy Corporation and J.M. Smucker Company.

[Lewis Construction president Dennis Lewis at former presidential candidate John Kasich’s thank-you reception at Rock and Roll Hall of Fame Museum during Republican National Convention in Cleveland. July 19, 2016]

Another example of CEOs who participated at the Republican National Convention is Dennis Lewis, the president of his family-owned Lewis Construction based in Warren, OH.

Lewis said that the company, which has more than 15 employees and serves Northeastern Ohio and Western Pennsylvania, has been posting double-digit sales growth for the past few years and expects the same type of growth for the next two to three years.

He added that the family-owned business is looking past politicians to keep his company growing in the future.

The Republican National Convention, with more than 3,000 delegates and some 15,000 media representatives, also served as a dynamic stage for budding local entrepreneurs such as Darnell Ford, who has just founded and launched his mobile phone design accessory company selfie|z.

[selfie|z founder and CEO Darnell R. Ford at Urban League of Greater Cleveland tent at the Republican National Convention in Cleveland. July 20, 2016]

Ford said he decided to leave a six-figure IT developer position to launch selfie|z, which he hopes to sell to a global mobile phone accessory distribution company.

The Urban League of Greater Cleveland, part of the over 100-year old National Urban League, had hosted selfie|z owner Ford and another half-dozen African-American entrepreneurs in a tent within the Republican National Convention as part of the Urban League’s mission of economic empowerment, equal opportunity and access to capital.

Another example of how African-American business can flourish and how U.S. inner cities have become the most dynamic economic growth drivers in the world’s largest economy is the Evergreen Cooperative Laundry in Cleveland’s economically depressed Glenville neighborhood.

[Evergreen Cooperative Laundry tour by operations manager Claudia Oates, in the Glenville neighborhood of Cleveland during the Republican National Convention. July 21, 2016]

Set up in 2009 and 2010 with seed capital from the Cleveland Foundation and other local business groups, the Evergreen Cooperative Laundry has managed to achieve double-digit growth thanks to clients such as Starwood, Case Western Reserve University and Cleveland’s University Hospitals network, Evergreen Cooperative Laundry president Allen Grasa said.

Grasa said the co-op sales grew by 30 percent in 2015 and he forecasts sales to rise by to $2.3 million in 2016, from $1.7 million in 2015.

Evergreen Cooperative Laundry operations manager Claudia Oates said the most striking aspect of the success of Evergreen Cooperative Laundry is that almost all of the plant’s 50 employees are “returning citizens,” convicts recently released from nearby prisons.

Oates said the employees are hard-working, loyal and grateful for a chance to earn an honest living. Oates said she hopes Evergreen Cooperative Laundry can convince the new landlord of the plant’s building, local real estate developer and construction concern Geis Companies to give Evergreen the opportunity to double its existing plant to meet growing demand.

[Don King, along with Congressman Roger Williams (R-TX) at the Republican National Convention in Cleveland. July 19, 2016.]

While the disruptive and disturbing nature of Donald Trump’s nomination and the negative sentiments surrounding Hillary Clinton’s nomination have left many big business to distance themselves from the race, America’s small to medium-size businesses know they do not have the luxury of waiting on the sidelines.

 

 

[Skybridge Capital managing partner Anthony Scaramucci, following Bipartisan Policy Center event during the Republican National Convention in Cleveland. July 20, 2016]

The nomination of Donald Trump may lead the GOP to lose key Senate and House races. Many top Fortune 500 CEOs are looking to back a third-party candidate, Libertarian leader and former New Mexico Governor Gary Johnson “as a way to save the down ballot,” one major CEO said.

However, a major disruption in Washington, DC in November may have a silver lining for America’s small to medium-size businesses located in early-growth markets such as Cleveland, Baltimore and Washington, DC: A widely expected global recession will more than likely force the next president to propose an economic stimulus package similar to the one issued during the 2008 crisis.

In addition, the White House and Congress may have no choice but to legislate a tax reform bill allowing the repatriation of an estimated $2.1 trillion of U.S. corporate profits.

[US Senator David Perdue (R-GA) at Bipartisan Policy Center event at Republican National Convention in Cleveland. July 20, 2016]

In an interview during the Republican National Convention, U.S. Senator David Perdue (R-GA) said he will propose to allow U.S. companies to bring back their corporate profits at a zero-percent rate.

While U.S. corporate profit repatriation has always been blocked by partisans in Congress, the nascent alliance between Republicans and Congressional Black Caucus members on issues of economic opportunity could well pave a way to partnerships such as the one between Governor John Kasich and Cleveland Mayor Frank Jackson.

[Donald Trump with family and U.S. House Financial Services Committee Chairman Jeb Hensarling (R-TX) at Republican National Convention in Cleveland. July 20, 2016]

This article was produced in cooperation with Black Business News (BBN), a news service of Capitol Intelligence Group. PK Semler is chief executive editor and owner of Capitol Intelligence Group.