Just Say Yes: What I've learned About Life, Luck, and the Pursuit of Opportunity

Just Say Yes: What I've learned About Life, Luck, and the Pursuit of Opportunity

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by Bernard L Schwartz

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Whether he’s leading a company or leading the call for a better nation, storied New York businessman and philanthropist Bernard Schwartz believes in the power of optimism.

Bernard Schwartz has dined with world leaders, cut a multi billion-dollar deal on the back of a napkin, and led a Fortune 200 corporation. From humble beginnings that saw his family


Whether he’s leading a company or leading the call for a better nation, storied New York businessman and philanthropist Bernard Schwartz believes in the power of optimism.

Bernard Schwartz has dined with world leaders, cut a multi billion-dollar deal on the back of a napkin, and led a Fortune 200 corporation. From humble beginnings that saw his family moving regularly from apartment to apartment to take advantage of new lease discounts to his dramatic rise to CEO of a major aerospace innovator, the author’s story is a narrative on the importance of character, intelligence, and a lot of good luck. In a time when stories about corrupt CEOs and unethical banking practices flood the news, Schwartz offers the notion that doing the right thing is a more rewarding road to accomplishment, and that when applied for immoral purposes even the sharpest skills will likely lead to a fall.

As Americans today await the return of economic stability and politicians wage battle over the future of government programs, opportunity seems out of reach. But Schwartz, who grew up in Depression-era Brooklyn, believes that there are steps we can take as a nation to bring about a recovery and even growth. As a child, he watched men dress for work each day whether they held a job or not. He remembers the widespread deprivation that filled everyday scenes and the streets with breadlines. But he also recalls a hopeful people; a citizenry united in the pursuit of education, homeownership, proprietorship, and community improvement. Today, he champions investments in job creation, infrastructure, technology, and innovation as the means to get us back on track. With measured insight on the role the federal government can play in creating pathways to prosperity, the author discusses how the United States can again be a land of opportunity for all.

In this inspiring example of a life well lived, Bernard Schwartz invites readers to look at their own opportunities, their own ideas, and even their fellow Americans and Just Say Yes.

Editorial Reviews

Library Journal
Written in an engaging and conversational style, this memoir outlines the details of a full and successful business career. In many ways, Schwartz's life story reads as a portrayal of an archetypal example of a member of the "Greatest Generation," albeit an extraordinarily successful one. Born in the 1920s in Bensonhurst, Brooklyn, the author served in World War II and attended college on the GI Bill. He started on the corporate ladder as an accountant and became known for his skill in taking companies public. Schwartz went on to head several major businesses, most notably Loral Corporation, a defense contractor, which he later transformed into Loral Space & Communications. Schwartz is a lifelong Democrat and member of the Democratic Leadership Council, and his ongoing association with Bill and Hillary Clinton is mentioned throughout the book, as are his ties to other prominent businesspeople and politicians with whom he has worked and socialized. The author remains strongly engaged in philanthropy and policy through his Schwartz Center for Economic Policy in New York City. Family photographs and personal details add a human touch to a captain of industry. VERDICT This combination corporate success story and autobiography is a solid purchase for libraries where such titles are of interest.—Susan Hurst, Miami Univ. Libs., Oxford, OH

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Greenleaf Book Group Press
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Greenleaf Book Group Press

Copyright © 2014 Bernard Schwartz
All rights reserved.
ISBN: 978-1-62634-074-9


The $13-Billion Lunch

To make the deal of a lifetime, you don't always need the meal of a lifetime.

On the day I'm talking about, lunch came to something like $20; my friend and I were seated in a run-of-the-mill diner in Virginia. Norman Augustine—the head of Lockheed Martin, the world's largest defense contractor—and I had met to discuss a deal in which Lockheed could acquire the greater part of my company, Loral. In the pages ahead, I'll relate the full story of exactly how I wound up at that diner with Norman. But what we did together that day over the course of two hours or so might be called the ultimate no-frills negotiation.

I wasn't desperate to sell and hadn't shopped the company around. I just felt it was time, for the sake of the shareholders, to monetize the success of Loral. I also believed that Lockheed, under a visionary person like Norm, was the kind of place that understood Loral's true value. So I called Norm. We both knew why we were there, and things never got tense. First, we chatted about the basic parameters of the deal; I intended to sell Lockheed everything except the satellite technology part of the business. After a while, I took an envelope from my inside suit-jacket pocket and wrote down the financial fundamentals, including the proposed selling price for Loral's defense business: $9.4 billion. Combined with the portions I intended to keep, that put the market value of Loral at $13 billion. I picked up the envelope, turned it around, and showed it to Norm. Sometimes you don't need PowerPoint.

As unglamorous as I've made it sound, this was hardly just another transaction. Loral for me represented a singular achievement in a life spent buying and running companies with the goal of adding to their value (as opposed to stripping out and selling off the assets in the manner of private equity investors). Loral reflected my philosophy and personality, especially my belief that capitalism can be a kind of art form—a beautiful thing that benefits everyone involved: rank-and-file employees, customers, executives, suppliers, and stockholders. Employing that philosophy, I had taken Loral from the brink of bankruptcy in 1972 to immense success by that day in 1996 when Norm and I sat across the table from each other in the diner.

When I took over Loral, I already knew something about making deals and money, but except for what turned up in my due diligence, I didn't know anything about the company's main business: high-tech electronic communication and defense systems for military aircraft. I also had zero experience with Loral's most important customer, the Pentagon. On top of that, as a New Yorker, an outspoken Democrat, and a man named Bernard Schwartz, I was—how should I put this?—not your typical member of the military-industrial complex.

But so what? I wasn't going to let any of those things get in the way. The economist John Maynard Keynes once wrote that "exuberant inexperience" was a key ingredient in success, and I certainly had plenty of that. Besides, where I grew up you had to be a quick study to make a living. You had to know how to reinvent yourself.

In retrospect I can see it was to my advantage that I was not steeped in the conventional wisdom, or even the basic facts, of the defense business. To quote the great Victorian novelist Samuel Butler, a little knowledge can be a dangerous thing. If I had been a hard-bitten veteran of the defense industry, I probably would have taken one look at Loral as it was in 1972 and run in the other direction. Imagine the opportunities, financial and otherwise, I would have missed!

I'll go into the details later, but for now, suffice it to say that when my best friend, Bob Hodes, asked me in 1971 if I'd take a quick look at a struggling company that he was involved with, I soon learned that the company—Loral—was doing miserably. Started in 1948 by an engineer named William Lorenz and an accountant named Leon Alpert (the Lor and al in Loral), the company was bleeding red ink. The stock was selling for around $2 a share, down from about $50 in palmier days. The New York Stock Exchange was threatening to delist the company, and banks were getting ready to cut off its credit.

Loral's main problem was lack of vision. By that time Lorenz had more or less checked out of the business, and the people left in charge, including Alpert, had built the company into a kind of crazy-quilt conglomerate: They had acquired a company that made toy soldiers, a wire company, a packaging company, and a few other unrelated firms. Mind you, the Vietnam War was raging at this time, and while that was horrible for America in so many ways, you might have thought it would at least be good for Loral's bottom line. If an established defense contractor can't profit during an extended period of armed conflict, when can it do well?

And yet, there were things about Loral that intrigued me. Furthermore, from a professional standpoint, the timing was right for me too. In 1971 I was president of Reliance Group and working with its CEO, Saul Steinberg. We had been very successful with a computer-leasing business and an insurance business among other enterprises. But I had reached a kind of comfort zone that I found unfamiliar and, well, uncomfortable. I needed a fresh challenge, a new chance to be creative—I needed a company I could run myself.

So I made what turned out to be the single best move of my professional career. On February 18, 1972, Loral announced that both of its founders were retiring and that I was taking over as chairman and CEO. I remember my friend Gershon Kekst, the head of one of the nation's top financial public relations firms, saying, "When Bernard Schwartz jumps into something, he doesn't do it with both feet, he does it with eight feet!" I'm not the octopus that Gershon apparently thinks I am, but it was true that transforming Loral into a profitable company became my sole professional focus.

Where did I get the courage, or maybe it was just the nerve, to think I could take a company that was headed so rapidly in the wrong direction—a company in an area in which I had no expertise—and turn it completely around? My hopes and plans for Loral came from something I saw when I assessed the situation in light of my previous experience as a businessman: hidden value. The business community in general looked askance at defense companies, and conglomerates that had divisions in that sector undervalued those divisions and considered them a drag on their stock price. In 1971 Wall Street saw high-tech electronics companies that were similar to but even much more successful than Loral as troublesome investments, and few analysts covered the industry. Despite all of the uncontrollable factors and cycles that made the defense industry such a challenge, when I looked at the same sector I saw a lot of undervalued companies that could be acquired at relatively low prices and then combined in a way that would build on their success and release their previously untapped synergies.

In other words, this is not the tale of the acquisitive businessman that you've heard a thousand times before. I wasn't one of those vultures that swoop in on ailing companies, firing most of the employees and selling off the assets. Such acquirers set a short-term sellout strategy, eliminating long-terms plans like R&D to realize huge returns on their investments. But my plan was about growth and empowerment: making the company profitable and less susceptible to business cycles and unpredictable events and putting into effect cross-synergies that could increase efficiencies and lead to dramatic growth even at a time when defense spending was likely to start declining.

I had my own very particular ideas about running a company and creating the right atmosphere. As determined as I was to turn Loral around financially, I was equally determined that it would reflect my philosophy and values—and it did. After a while people inside and outside of the company started talking about the "Loral culture." In the end it didn't just change Loral; it changed the entire defense industry and sent out ripples far beyond. The swift and enduring success of the Loral approach was a beautiful thing to behold, especially if you were a shareholder. Indeed, it would turn out to be the single most gratifying aspect of my professional experience.

The Loral culture meant a lot of things, but one key was keeping the management team small. At our height, when we were competing successfully with and subcontracting for industry giants such as Lockheed, Hughes, McDonnell Douglas, Boeing, ITT, IBM, and Northrop, we maintained a core leadership group of only about eight people—tiny in comparison with our rivals. But communication was free-form and constant. We had what I liked to call a "bias toward action." The company started growing in 1972, and it was still going strong when I sold the defense business to Lockheed in 1996. We had put together ninety-six consecutive quarters of growth, the second-longest streak in American corporate history, topped only by Jack Welch in a run at General Electric. From just over $32 million, sales from continuing operations grew to $5.5 billion. Our annual net income rose from negative $2.7 million to $288 million, and our net worth increased from $14.4 million to $1.7 billion. The stock split three times in the interim, we instituted an annual dividend, and the average price, adjusted for stock splits, rose from about $0.75 to more than $45 a share. Instead of thirteen hundred employees, we had nearly thirty-eight thousand. A $100 investment in Loral, made when I took over, would have been worth $17,799 in 1995.

For all those reasons and a few others, the deal I outlined on the back of that envelope and showed to Norm Augustine, although it wouldn't be signed and announced to the public for a few months, would be seen as excellent news for shareholders. At the same time, it was also a fair price for Lockheed to pay for a company that had become a major player in the defense industry. In fact, after the lawyers and other executives spent a couple of months screwing down the details, the number didn't change.

The sale of our defense businesses for more than $9 billion in cash was a crowning achievement in the history of Loral. Standard procedure for a CEO would have been to take the money and use it to invest in another venture, and it would have been perfectly legitimate to do so. But the stockholders, I realized, deserved to be rewarded. They had put their trust and their money in a very special company that had enjoyed an extraordinary run, and I wanted to acknowledge that.

So when the deal was announced on January 8, 1996, I did something unprecedented: I declared a special distribution of $38 per share, or $7 billion, in cash to the stockholders. In addition, for every Loral share they owned, they received one share—valued at $13.13 per share, or an aggregate $2.4 billion—in Loral Space & Communications, a new, smaller company that would concentrate on designing and manufacturing communications satellites and operating a satellite constellation for commercial and government purposes.

And I wanted to do one more thing.

Because of the sale, some Loral employees would soon be working for Lockheed, but for others the next step was less clear because of the possibility of redundancies. For them the future was uncertain. Norm had readily agreed with me that every effort would be taken to ensure that no one would lose a job, and I knew I could trust him to do his best.

Still, unexpected things happen in large-scale deals like ours. In order to provide some tangible comfort to those at risk, I set up an $18 million fund from my own personal resources for distribution to about forty of Loral's most vulnerable employees, top to bottom, with some top executives getting a million or more, and some secretaries getting as much as $100,000. It was my own money I was giving away, but I was happier when it became theirs. Why? Because for me the people have always been the most important part of any transaction.

Not long after the sale to Lockheed was announced, my wife, Irene, and I were in Paris, having lunch at one of our favorite cafés. Halfway through the meal, our waiter appeared with a beautiful bottle of white burgundy: a gift, he explained, from a fellow diner who had been a Loral stockholder and wanted to say thank you. That would turn out to be the first of quite a few bottles and desserts (my addiction to chocolate is well known) sent our way by happy investors over the years at restaurants around the world. I have also received many letters and other expressions of thanks from former or current Loral employees. They are part of my extended family and, truth be told, as much as I appreciate the fancy wine and sweets, I treasure their cards and snapshots even more. I gain deep satisfaction from knowing that the lunch Norm and I shared that day in Virginia resulted in good things for the people associated with this company that afforded me the deepest professional satisfaction of my career.

But there is much more to tell, of course, about how all this came about. As Wordsworth famously said, "The child is father of the man," and in order to understand my approach to finance, to business, or to anything else, it would be helpful to learn about the people, events, and circumstances that exerted the earliest, pivotal influences on my life. To tell that part of the story, I need to invite you to follow me back to Bensonhurst, in Brooklyn, during the years leading up to World War II.


Brooklyn Beginnings

When I conjure up my childhood, I see myself in many different rooms. That's not because we lived in a large, rambling house or because my memory is shaky; it's because we moved around a lot.

In those days, Brooklyn landlords would paint an apartment for anyone who signed a two-year lease, and they would give a new tenant a concession ranging from two to six weeks on the rent for a three-year lease, depending on market conditions. In order to take advantage of those incentives, my five-person family would move every two to three years to an almost identical three-bedroom apartment with living room, dining room, and porch in a semidetached house. We always lived on the ground floor and the landlord lived on the second, just a few steps up the stairs. The arrangement made it clear to me early on that we live in a society built on relationships.

The Bensonhurst neighborhood of Brooklyn was a middle-class residential area with its own local shopping districts on Twentieth Avenue and on Eighty-Sixth Street. There were several six-story apartment houses, but the principal housing units were semidetached seven-room apartments, with two-car garages in the back of the house.

The only problem with our moving so much was that moving wasn't free. I remember how an appraiser would come to our place to make an estimate of what it would cost to move all our worldly goods, except for the piano. A piano was always $25 extra: no small consideration. We had one, and we hauled it around with us.

That should tell you something about the Schwartzes. On one hand, we felt it necessary to move often in order to save a little money. On the other, we felt the investment in our piano was an important part of our lifestyle. Even in the rough years, we never got rid of our old upright.

Looking back, I can't remember too many just plain old times in our household. We were either up or down, fat or lean. We had years when we went to Monticello, New York, in the summer and Lakewood, New Jersey, in the winter. Riding through the silent, snow-covered streets of Atlantic City in a one-horse open sleigh, complete with jingle bells, is something I'll never forget. But there were also years when we stuck to Coney Island. We had periods when my father drove a luxurious dark green Nash like you saw in the gangster movies and times when he had to trade it in for a plebian Plymouth.

My father, Harry Schwartz, was a sign maker by trade, self-employed. He started the business after working for Sheffield Farms, driving a horse-drawn milk wagon. As a sign maker he was mostly at the mercy of the cycles affecting the real-estate trade. With his stamping machines he made plastic signs that said things like "For Sale," "All Visitors Must Be Announced," "Deliveries to the Rear," and "No Soliciting," usually in his own neighborhood shop. He had as many as seven or eight employees, salespeople mostly, whom he tried to keep on the payroll in good periods and bad. Often, at the end of the week, the employees took home more money than he did.


Excerpted from JUST SAY YES by BERNARD L. SCHWARTZ. Copyright © 2014 Bernard Schwartz. Excerpted by permission of Greenleaf Book Group Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Meet the Author

Bernard L. Schwartz is an investor, a retired industrialist, a progressive public policy advocate and a philanthropist. For thirty-four years he served as chairman and CEO of Loral Corporation and its successor company Loral Space & Communications. Loral, a Fortune 200 defense electronics firm, achieved revenues of nearly $7.5 billion and employed 38,000 people at its height. Mr. Schwartz also formed and served as CEO of K & F Industries and Globalstar Telecommunications. He is currently chairman and CEO of BLS Investments, LLC, a private investment firm, and also manages the investments of the Bernard and Irene Schwartz Foundation. The foundation invests in think tanks, universities, and advocacy organizations, specifically targeting programs that develop policies focusing on US economic growth and job creation initiatives. It also supports institutes of higher education, medical research, and New York City–based cultural organizations. Mr. Schwartz and his wife Irene are lifelong Democrats and active supporters of the Democratic Party. They were born in Brooklyn and have resided in New York City all of their lives.

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Just Say Yes: What I've Learned About Life, Luck, and the Pursuit of Opportunity 5 out of 5 based on 0 ratings. 1 reviews.
Anonymous More than 1 year ago
Bernard Schwartz is someone who brings creativity to his pursuit, and this shines though in “Just Say Yes”.Throughout life it is impossible to always have a win win situation - the wind is sometimes in your face instead of at your back. I believe this enjoyable book can help all of us fly the kite of life successfully and with dignity. It takes a lot of courage and nerve to achieve what the author did. Personally, I think this is a great biography, and it is extremely well-written, as well as interesting and informative.One never really knows what opportunities lie ahead. I believe we all need a little insight from someone who is successful and willing to let us in on their secrets.In my opinion (however, humble that may be) reading this book could be the single best move you could make toward success and prosperity in your own life.   Jeannie Walker (Award-Winning Author)