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Private sector savvy: Can Chris Collins' business expertise save Erie County?
[September 23, 2007]

Private sector savvy: Can Chris Collins' business expertise save Erie County?

(Buffalo News, The (NY) (KRT) Via Thomson Dialog NewsEdge) Sep. 23--On paper, it's hard to imagine anyone more qualified to turn around a struggling corporation.

Chris Collins did it. Not once. Not twice. But nearly a dozen times.

It's a resume that, on the surface, seems well-suited for the next chairman and chief executive of Erie County.

But the challenges of turning around small to medium-sized businesses -- 11 at last count -- pale when compared to the task of saving county government.

"They all say 'you can't run it like a business,' " said Collins, the Republican candidate for county executive. "But let's face it, you can."

Voters will spend the next six weeks, now that the Democratic Party primary is over, learning about the other man in the race, the businessman turned politician.

They'll hear the story of a young entrepreneur turned millionaire, an investor with an uncanny knack for reviving troubled companies.

"He's tenacious," said Philip M. Corwin, a neighbor and golfing buddy. "He's a person who wants to get things done. He wants to get things accomplished."

But does private sector expertise translate into public sector success?

After all, Collins is not the first businessman to run for political office and preach reform.

On top of that, his opponent, Democrat James P. Keane, will question the way Collins made his millions. He did it with the help of taxpayer-financed incentives and often by cutting the salaries and benefits of workers.

Just minutes after he won the primary Tuesday, Keane was up on stage lambasting Collins' record as an investor and entrepreneur.

"He has run his business his way, and it's made him rich," Keane said during his primary night acceptance speech, "but he has killed more jobs than he has created."

Keane also jumped on Collins' use of more than $3 million in government incentives to help finance some of his business deals.

"And that he calls success," Keane said.

At odds over jobs

When asked about the jobkilling allegation, Keane's aides point to Collins' time as a manager at Westinghouse Electric in Cheektowaga. The plant's operations closed over time, eliminating 2,700 jobs.

The suggestion is that Collins was responsible for the entire plant closing even though his purchase, a gear division he once managed, amounted to a small piece of Westinghouse's local operation.

"He began the eventual destruction of Westinghouse," said Keane spokesman Donald Van Every.

Collins calls the allegation baseless and notes that the plant closed well after he left the company. He also claims that, over the past 25 years, he has preserved or created 700 to 800 jobs.

"There's great satisfaction that comes from making lemonade out of lemons," he said of his companies.

Westinghouse, the first of his deals, proved to be a model for almost everything else that followed.

"They've all had a troubled past," Collins said of his companies. "In other words, they had trouble paying their bills."

In almost every case, the companies he invested in were closed, bankrupt, struggling to make ends meet or owned by a parent who didn't want them. The latter was the case with Westinghouse.

He also limits his investments to existing companies, not start-ups, and he always ends up with valuable assets -- equipment, employees and back orders -- often at a bargain basement price.

What Collins brings to the equation is money, expertise and an ability to grow a business.

"He's got very high expectations for his organizations," said Joseph McMahon, Collins' business partner at Audubon Machinery in North Tonawanda. "Believe me, I feel the pressure, and that's good."

At Volland Electric, a small electrical repair company in Cheektowaga, the expectation was that new products and services would help boost the bottom line. Collins' solution?

Buy four other companies and roll them into one -- Volland.

"I seem to be able to sense what's important from what's not important and work on what's important," he said. "I spend a lot of time thinking about what the future looks like."

The same was true at Buffalo China, Collins' most ambitious investment, a $5.5 million buyout of the dinner plate manufacturer from its parent, Oneida Ltd.

On the verge of shutting down, the plant was purchased by Collins and a team of existing managers using a combination of personal capital, bank financing and taxpayer-financed incentives.

The new owners also cut the work force by a third, reduced wages and benefits and ousted the union.

The '50-50' concept

And for that, Collins and company came under criticism for using one hand to accept public assistance and using the other to show employees the back door.

"The reality is, Oneida shut them down," Collins said. "If we hadn't stepped in, there would have been no jobs."

As part of the Buffalo China deal, Collins put up $1 million of his own money and got 50 percent of the company in return. And that's typical for him.

He calls it the "50-50" concept and says its simplicity and fairness have made it the bedrock of his business model.

"What can be more fair than 50-50?" he said. "What does 50-50 mean? We sink or swim together. You're putting your trust in someone else and vice versa."

It's a principle Collins hopes to take with him to county government.

He knows municipal union leaders will be wary of a rich businessman with a reputation for cutting worker pay and benefits. He also knows the stateimposed control board will be looking over his shoulder.

Collins' hope is that the notion of a "50-50" relationship will help end the current stalemate between labor and management -- most county employees are working under expired contracts -- and pave the way for positive relations and ultimately reform.

He's not shy in suggesting county workers need to give up something if they expect a pay raise in the future. And he's also not shy about his strong support for the control board.

"As a taxpayer, thank God they're there," he said. "I know several members of the control board. They know me. They know I'm going to focus on the taxpayer and I'm not going to do silly things."

He thinks a Collins' victory in November would go a long way toward restoring the county's fiscal health. And yes, he thinks part of the remedy is a business-oriented approach to managing government.

"There are similarities in government and business," he said. "It's employees. It's customers. It's being focused on a mission and a vision."

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