“Second, we will offer our services without fee, but with two conditions. We must be given complete control of the organization for a minimum of one year. If the organization achieves agreed upon levels of performance under our control, we will be given enough voting stock to control the board of directors, plus be reimbursed for all travel and related business expenses. We want to achieve the maximum amount of control without being constrained by the amount of capital we have.
“Why do this? The goal is to achieve control over employment and investment decisions which have kept minorities out of the corporate power structure. To protect our position, the boards we control will adopt poison pills. For instance, the chairman’s approval or an eighty percent majority will be required to change board members involuntarily. Directors will be allowed to purchase stock at half the market price. The whole idea is to make it so difficult and costly for an outsider to gain control that a hostile takeover becomes prohibitively expensive. Our goal is control, not return on investment, although all of us will probably grow incredibly wealthy as a result of this venture.
“Third, we’ll follow a strategic plan of specific companies in specific industries around the globe. This will require us to operate within a very disciplined framework. We may have to pass up some personally appealing opportunities if they do not get us closer to our goal. The ultimate objective will be to gain control of a large enough slice of the economic pie to assure every non-heterosexual, non-Christian, non-white, non-male in the world will have the opportunity to work for an organization which treats them as equals.
“There is an element of risk in a plan this far-reaching and aggressive. There’s the risk no business will accept our service on the terms I’ve outlined. There’s the risk it’ll take longer than our lifetimes to achieve such aggressive goals, although my timetable calls for twenty years. There’s the risk national leaders will feel threatened, and move against us while we’re still vulnerable.
“I’m willing to accept these risks because I know tens of millions of people live quietly desperate lives all over the world. Many gays still lead double lives, hiding their sexual preference from co-workers, family, and spouses. Far too many of us are so damaged by the time we become adults we struggle with drugs and other compulsions the rest of our lives. Saddest of all are the children. The U.S. government estimates nearly one million teens live on the streets of major American cities. They’re runaways and throwaways, and nearly half are gay, lesbian, bisexual, or transgender. Most are emotionally and physically abused at home or school. On the street, they turn to drugs, theft, and prostitution to survive. A shocking number don’t live to celebrate their 21st birthdays, mostly dying from drug overdoses or disease. Can you imagine how bad life at home must be to prefer living in abandoned buildings and eating from dumpsters? No one even keeps score in third-world countries, where being gay can be a death sentence. I have firsthand knowledge of this, and can tell you stories that’ll bring tears to your eyes.
“We’ve come a long way in the United States since the first gay man died of AIDS. Society can no longer ignore our existence, but that doesn’t mean they like us any better. It’s shameful that our own citizens need to march with signs reminding society that black, Muslim, and LGBT lives matter. Even more shameful are politicians screaming at the top of their lungs that U.S. entry should be based on a person’s skin color, religious beliefs, sexual preference, or gender identity.
“I have given money to shelters for homeless gay youth. I have contributed clothing, furniture, and food to battered women’s shelters. I have taken recovering alcoholics and addicts into my home to start new lives as sober members of the community. Most of you have done all these things and more. The good news is that thousands of people across the country are doing the same. The bad news is it’s not enough. Gays, lesbians, and transsexuals in Asia, Africa, Latin America, and the Middle East live in medieval conditions. They’re still being killed, beaten, ostracized, or jailed when their sexual preference is discovered. There are more fanatics with assault rifles waiting for their chance to beat the body count in Dallas. They’re in Austin and Houston and Atlanta and hundreds of cities biding their time, waiting to strike. I’m not willing to wait for the next tragedy, then light a candle to remember our dear departed. I want to do something and I want to start now.
“I believe what I’m proposing today is our best hope. Politicians shamelessly steal our votes with empty promises. Religious leaders hope to save our poor damned souls with prayer. The only avenue which holds any promise of closing the gap between haves and have-nots is economic power.
“I can offer you this much of a hedge against the risk of losing everything. If you’ll join me in my commitment to devote the next five years to this project, I’ll guarantee that if we fail, I’ll use my position at Foresight International to provide each of you with a job and salary equivalent to what you’re leaving behind. I’ll also pledge my entire net worth to this group. If we fail, you can split my assets among yourselves. That’s the level of commitment I’m willing to make. We are the lucky few. Together we have a golden opportunity to make a difference in millions of lives. I believe we not only have the opportunity, but the obligation to do this.”
Eric paused for breath before continuing. His voice had risen steadily as he spoke. The words were pouring out of him in a machine-gun-like rhythm…..quick, clear, short bursts. His audience waited attentively for him to continue.
In a calmer, softer voice, Eric said, “This is something I know I must do. If I die today, people might say I died rich and powerful. That’s nice, but it’s not the legacy I want to leave. I’d rather have people say I made a difference, but I don’t believe I’ve earned the right to those words yet.
“It wouldn’t be fair to press for your decision today. The folder in front of you contains a detailed proposal of the plan I have just spoken about. It can all be digested in several hours. I invite you to review this material, discuss it among yourselves, and then meet here at nine a.m. two days from now. You’re free to leave at any time, however, I must ask that the material I’ve given you be returned due to its sensitive nature. I’ll be available to answer any of your questions during the next two days. Or you may voice any of your concerns at our next meeting. At that time, I’ll ask you to make a commitment to join me, or to decline. It’s my sincere hope all of you will accept my offer. Are there any questions before we adjourn?”
Melanie Eiverson hesitated, then felt the whole group might benefit if she asked her question. “Eric, how will your proposal prevent another incident like the Dallas massacre?”
“I intend to allocate ten percent of pre-tax earnings to support political candidates who embrace our vision,” Eric replied. “We’ll lobby for stricter gun control, better education, and more protection of basic civil liberties for non-white, non-Christian, LGBT communities. Through economic and political power, we can protect the lives, property, careers, and freedom of those who are being ignored or abused.”
“Thanks to your influence with investment bankers,” Melanie continued, “my family’s company survived a very difficult financial crisis. I’m deeply indebted to you, as I assume most of the people in this room are. Just to be clear, are you asking us to leave our current positions and dedicate the next five years full-time to this project, or can we do both? If some of us leave what we’re doing now, there may be nothing left to return to in five years.”
Eric answered Melanie’s question quietly and deliberately. “It may seem like a lot, but yes, I am asking you for a five-year commitment to work exclusively on this project. I can’t guarantee our success. None of us got where we are without taking risks. We’re all talented and most of us thrive on overcoming obstacles. Look at it this way. I’m not offering you jobs. I’m offering you a chance to change history for tens of millions of people. We will create a legacy greater than any of us could achieve alone. At least, that’s what I believe.”
Graham Arends asked t
he most obvious question. “Eric, we all know there’s been a rapid concentration of economic power. Yet, even with all the mergers, there still seem to be so many different players involved. Can we really hope to control a large enough slice of the economic pie to make a difference?”
“You’ve just voiced the most critical concern, Graham,” Eric complimented his former college professor. “I believe we have better than a fifty percent chance of pulling this off. I’ve done some research to find out exactly how big the challenge is. The arithmetic is in the material you’ve been given. I urge you to review it carefully for yourselves later on, but for now, just listen as I talk you through my analysis.
“There are four distinct economic groups on this planet. First, there are the developed nations which include North America, the EU, UK, Oceania, Japan, Korea, and Singapore. They all have freely elected governments, and a long tradition of respecting individual property rights. They also have highly developed infrastructures. With about a billion people, this group represents 15% of total world population, 40% of annual GDP, but controls more than 60% of global wealth. The second group is called BRIC which stands for Brazil, Russia, India, and China. These four huge, developing nations represent half the world’s population, and may well be the next superpowers, but right now they’re all struggling with pollution, overcrowding, corruption, and inadequate infrastructure. The third group is OPEC, the oil exporting nations of the world. They generate a trillion dollars of oil revenue each year, but represents less than 1% of the global economy. These countries are marked by relatively small populations, corruption, and autocratic rule. With the use of fossil fuels likely to decline due to climate concerns and the rise of alternative energy sources, this group will have decreasing importance. The fourth group is all other nations, mostly underdeveloped, corrupt, politically and economically unstable. For now, we’ll ignore the developing nations, OPEC, and BRIC. Most are closed societies, so gaining control would be difficult anyway. Real power is in the free market economies of North America, Europe, and the Pacific Rim. They’re the ones which matter most today.
“In the U.S., there are millions of businesses, yet most of the financial power is concentrated in a couple hundred large corporations. Today, the five hundred largest corporations control eighty percent of all the financial assets in the U.S. In the EU and Pacific Rim, there are another five hundred companies representing a similar degree of concentration. These thousand companies are controlled by boards of directors with an average of ten members each. I compiled all the names of these directors and eliminated any name which appeared more than once. I was astonished to see my list shrink from ten thousand names to two thousand. The decisions this group makes regarding the use of capital and labor influence the decisions of other people in powerful positions, who in turn influence the decisions of the rest of the global economy. Control this group, or control what they control, and everything else falls into place.
“To carry my analysis a step further, the top thousand key decision-makers in the U.S. economy are concentrated in only a dozen industries, each dominated by about six companies. We need to capture control of seventy-two companies for this plan to succeed. If we capture control of only twenty-six of these targets, we will have amassed an amount of economic power greater than any single country except the United States. I have already identified the companies we should target, and the sequence to target them. I’ve also included a one-page assessment of the first twenty-six companies, along with some ideas about how we might achieve our objective. Each is vulnerable. They can all be had.”
“Eric, where will the working capital come from to launch this venture?” Melanie asked. “Will each of us need to bring capital to the table?”
“No, that’s all arranged,” Eric assured the group. “We must be prepared to operate two years without generating any cash, so Foresight International will supply a revolving credit line of five hundred million dollars. I will personally guarantee the loan, therefore I will own sixty percent of the new company. As an inducement for you to join me, I will give each of you stock options to buy two percent of the new company. These options will vest over five years. If we create a company worth a billion dollars, you each walk away with twenty million dollars five years from now.”
“Who will own the rest of the company?” Joseph asked.
“The remaining twelve percent will be held in trust for employees and others.”
When the meeting adjourned, people broke into smaller groups. Eric mingled continuously among his guests. He was warm, witty, and charming, melting their concerns away. Inside, he was a bundle of nerves. If he failed to convince this group to join him, Eric knew his plan had little chance for success.
At nine a.m. on the second day after the initial meeting, all fourteen guests returned to their seats around the oval table. Eric opened the meeting by asking if there were any questions.
Joseph Bramston stood. “Eric, what will you call this new organization?”
Eric blushed slightly. “I was afraid someone would ask. It depends on the number of people who join me in this enterprise, so I was hoping to save that for the grand finale. I plan to use the word Tuteur followed by the number of people involved in this enterprise when we launch. Tuteur is a French word meaning guardian. I would have used the English word, but another company is already using it. Anyway, I’m hoping I won’t have to call the new enterprise Tuteur1!”
“That being the case,” Joseph smiled, “the group has authorized me to speak on its behalf. We would all like to accept your generous and exciting offer, Eric. I guess that makes us all members of the new Tuteur15 Corporation.”
A look of profound joy covered Eric’s face. He could not remember the last time he had felt such a rush of gratitude. As Eric stumbled to find the words to express his thanks, Joseph began clapping. He was immediately joined by all thirteen of his colleagues, who stood and faced their new CEO and chairman. Eric rose from his seat and circled the table, hugging each of the men and women who had agreed to join his new enterprise.
Joseph thumped Eric on the back as he shook his hand. “I’d lead us in a chorus of the company song if I knew the words!”
“We don’t have a company song, uniforms, or flag!” Eric laughed. “Well, not yet,” he murmured.
CHAPTER 23
Tuteur15’s first target was one of America’s largest communication conglomerates. It was exactly what Eric had in mind when he launched Tuteur15. Managing a confused maze of mismatched businesses, its executives waded through each workday, buying and selling companies, closing and opening plants, hiring and firing employees in what could only be described as bursts of schizophrenic energy. It was not so much a case of the left hand not knowing what the right was doing as it was an octopus that had lost control of its tentacles. Nearing collapse, the board of directors cautiously accepted Tuteur15’s proposal for assistance. Exactly ten months later, the board grudgingly acknowledged Tuteur15’s success, delivering enough voting stock to control the company.
Meanwhile, Melanie and Joseph were busy managing projects in the healthcare and financial service industries. Graham Arends had his hands full with projects in the energy and electronics sectors. Everyone at Tuteur15 was busy. More importantly, they were all enjoying unqualified success.
Next, Eric turned to the aerospace field. All the giants were in trouble. Excessive government regulation and bloated bureaucracies led to gross inefficiency throughout the industry. Federal government low-cost loans, tax credits, and preferential contract-letting practices kept these dinosaurs alive. Their boards and shareholders realized depending upon a fickle giant like the U.S. government was dangerous. Despite repeated demands from outsiders, no major American aerospace company was able to reduce its dependence on the U.S. government. Quite the opposite, the six largest aerospace companies in the U.S. depended upon federal government contracts for more than eighty percent of their total revenue.
The situation called for massive
restructuring, so Eric moved quickly. He sent proposals to the boards of the six largest aerospace companies which read: “Tuteur15 will manage your operations and generate a return on equity of 25% within twelve months. If this target is met, an amount of voting stock large enough to assure continuing control of the board of directors will be transferred to Tuteur15. If the target is not met, there will be no fee. Please reply within seventy-two hours.”
Three of the six companies accepted the Tuteur15 proposal immediately. No American aerospace company had shown anything approaching a 25% return on equity since the 1960s, so there seemed little risk of losing control. The Tuteur15 name was becoming synonymous with financial success, so each company believed that at the end of a year, it would regain control of much improved operations. One of the boards even discussed paying Tuteur15 a bonus for its hard work when it failed.
Eric promptly assigned his best people to the aerospace project. Balance sheets were restructured with below market funding from financial institutions affiliated with Tuteur15. Waste and inefficiency were ferreted out ruthlessly in a crash effort to make the project successful. Unrelated operations were sliced off and sold to the highest bidder in a flurry of divestiture activity. Executive dining rooms were closed. Corporate jets were liquidated. Company headquarters were sold and leased back. Administrative staffs were consolidated and streamlined. No stone was left unturned in the search for greater profitability. Everyone at Tuteur15 knew success in the aerospace industry was extremely urgent.
One Wall Street, New York
JP was impressed by Eric’s style. Alone in the elevator, JP slid the handwritten note out of his pocket one last time. “Please meet my office, June 10, nine a.m. Courier will deliver confidential documents for your eyes only. Read carefully. Looking forward to our meeting. Eric.”
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