In the summer of 2012 Bank of Ireland chief executive Richie Boucher was explaining changes he planned for the bank's branches to shareholder and board member Wilbur Ross.
The ever curious Ross raised some pertinent questions. Boucher suggested that the US businessman might like to visit a few branches on his way to the airport to see for himself what he had in mind.
They stopped by the Camden Street, Ranelagh and DCU Glasnevin branches. The New York-based billionaire chatted with customers and mingled with staff, asking questions such as how the branch’s technology worked and complimenting Boucher for the bank’s progressiveness in appointing female managers.
The exercise was typical of Ross. Known as the “King of Bankruptcy” for making his fortune turning around struggling businesses, the businessman always looked beyond his areas of expertise – the bank’s bad loans and restructuring efforts – to better understand the challenges facing his investment.
“He is just a kind of normal chap, extremely smart and very focused,” Boucher recalled of his one-time investor.
A collector of paintings by the Belgian surrealist artist Magritte, Ross often takes an oblique view on his investments. Around the time he was pumping money into Bank of Ireland, he once inquired of an Irish official whether Irish people would be more inclined to repay their mortgages because they were Catholic.
Tripled his money
The investment paid off. In four years, Ross more than tripled his money in the only Irish bank that avoided outright nationalisation during the 2008 banking crash, earning himself and his investors hundreds of millions of dollars.
He later followed his money investing in struggling UK, Greek and Cypriot banks.
The Irish investment may have been more valuable to Bank of Ireland and the country given how Ireland’s international reputation was on the floor in 2011.
“If we hadn’t had got that private capital, we would have been nationalised,” said Boucher. “That was the first bright spot in the Irish recovery, the first real hard cash coming into the country. It was absolutely pivotal for our recovery and a lot of people said it was pivotal for the country.”
US president-elect Donald Trump’s nomination of Ross as his commerce secretary on Wednesday puts a man with a deep understanding of Ireland and the Irish economy at the heart of next US administration.
He will be instrumental in directing Trump’s plans to reduce the corporate tax rate to 15 per cent, within two and a half points of the Irish rate and the Republican’s economic policies aimed at repatriating manufacturing jobs from overseas to restore the fortunes of a depressed rust belt region that sealed his election victory.
Struggling steel and coal businesses
It is an region that Ross (79), a former banker, knows well. He made his name and much of his fortune – estimated by Forbes at $2.9 billion (€3.1 billion) – in turning around struggling steel and coal businesses in West Virginia, Ohio and Pennsylvania.
These are industrial areas that Trump has promised to rebuild by renegotiating international trade that he says robbed the region of jobs. Ross, like Trump, has blamed the North America Free Trade Agreement with Canada and Mexico and China's entry into the World Trade Organisation, for many US factory closures. Trump's appointment of Ross, an early supporter and economic adviser to the Republican, is in lockstep with his plans.
Those who know Ross see little threat to Ireland’s multinational sector from Trump. They view greater risk to worker-heavy manufacturing countries such as India and China, and regard his policies for a repatriation tax on overseas US corporate profits hoarded in Ireland as a raid of balance sheets, not Irish workforces.
Dublin businessman Nick Corcoran, who has invested with Ross in Irish property assets through their WLR Cardinal Mezzanine Fund, envisages a “US-centric” rather than protectionist Trump administration.
“I envy his energy and his insights,” he said of his friend, Ross. “Sometimes you can make presumptions about people of age but certainly Wilbur has never shown anything but the sharpest instinct when it comes to spotting opportunities and understanding the dynamic of markets.
“That’s why I think he would make an excellent commerce secretary.”
