CI VIEW: Small and mid-market CEOs eye growth as big business retreat, Ernst & Young CEO

CLEVELAND, Ohio (SMARTCEO/BBN) – US 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.

[Ernst & Young Chairman and CEO Mark Weinberger speaks to SmartCEO/Capitol Intelligence Group at Bipartisan Policy Center event during Republican National Convention in Cleveland. July 20, 2016]

At the RNC Convention in Cleveland that nominated controversial real estate mogul Donald J. Trump, only CEOs/owners of small to medium size companies came to the convention while the CEOs of major corporations took a pass with the very notable exception of Ernst & Young Chairman and CEO Mark Weinberger.

Ernst & Young Chairman and CEO Mark Weinberger said he was in Cleveland to show his support not only for the city of Cleveland but also for small to medium size businesses across the United States.

Weinberger said EYs support of US SMEs 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 in an interview. “(SMEs) 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 of having a low cost base, dynamic cosmopolitan labor force and the HQs of major international companies such as the Cleveland Clinic; Fortune 100 companies Progressive Corporation (NYSE: PGR); Goodyear Tire & Rubber (NASDAQ: GT) (Akron), First Energy Corporation (NYSE: FE); J.M. Smucker Company (NYSE: SJM) (Orville) and US big law outfits Baker Hostetler and Jones Day.

[Lewis Construction President Dennis Lewis speaks to SmartCEO using CI Glass (google glass) during GOP candidate and Ohio Governor John Kasich thank you reception at Rock and Roll Hall of Fame Museum during Republican National Convention in Cleveland. July 19, 2016]

Another example of brave SmartCEOs who participated at the Republican National Convention is Dennis Lewis, the President of his family-owned Lewis Construction based in Warren, Ohio,

Lewis said that the company, which has more than 15 employees and serves the 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.

Lewis, speaking to SmartCEO at a rally for GOP Presidential candidate and Ohio Governor John Kasich at Cleveland’s Rock and Roll Hall of Fame, said the family owned business is looking past politicians to keep his company growing in the future.

The Republican National Convention, with over 3,000 delegates and some 15,000 media types, 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 speaks to SmartCEO using CI Glass (Google Glass) 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 US 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 filmed by SmartCEO using CI Glass (google glass) in the Glenville neighborhood of Cleveland during the Republican National Convention. July 21, 2016]

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

Grasa said the coop sales grew by 30% in 2015 from a 10% jump in 2015 and he forecasts sales to rise by to USD 2.3m in 2016 from USD 1.7m in 2015.

Evergreen Cooperative Laundry Operations Manager and formerly a senior management consultant, 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 that they can convince the new landlord of the plant’s building, local real estate developer and construction concern Geis Companies owners Fred and Greg Geis to give Evergreen the opportunity to double their existing plant to meet growing demand.

[Don King speaks with SmartCEO/Capitol Intelligence using CI Glass (google glass) along with Texas Congressman Roger Williams (R-TX) at Republican National Convention in Cleveland. July 19, 2016.]

Greg Geis and Quicken Loans and Cleveland Cavaliers owner Dan Gilbert were the businessmen who got Ohio Republican Governor John Kasich and Cleveland’s African-American democratic Mayor Frank Jackson working together to bring the RNC to Cleveland.

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

[SKYBRIDGE CAPITAL Managing Partner Anthony Scaramucci speaks to SmartCEO using CI Glass (Google Glass) following Bipartisan Policy Center event during the Republican National Convention in Cleveland. July 20, 2016]

The nomination of Donald Trump as the Republican candidate may not only lead the GOP to lose their majority in the US Senate but also in the US House of Representatives. Many top Fortune 500 CEOs are looking to back 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 US early growth markets such as Cleveland; Baltimore; Washington, DC; Wheeling, West Virginia; Salt Lake City, Utah; New Orleans, Louisiana; Detroit, Michigan and Nashville, Tennessee.

A widely expected second global recession will more than likely force President Hillary Clinton to propose an economic stimulus package similar to the one the Obama presidency put through in the 2008 financial crisis.

Vehement Republican opposition to any new stimulus packages and limits to quantitative easing, the White House and Congress will have no choice but legislate a tax reform bill allowing the repatriation of an estimated USD 2.1 trln of US corporate profits back to the United States.

[US Senator David Perdue (R-GA) speaks with SmartCEO/Capitol Intelligence using CI Glass (Google Glass) at Bipartisan Policy Center event at Republican National Convention in Cleveland. July 20, 2016]

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

While US 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 will pave a way to partnership such as the one between Governor John Kasich and Cleveland Mayor Frank Jackson.

[Donald Trump with family and US House Financial Services Committee Chairman Jeb Hensarling (R-TX) filmed by SmartCEO/Capitol Intelligence using CI Glass (google glass) at Republican National Convention in Cleveland. July 20, 2016]

By PK Semler in Cleveland, Ohio.  For information please call +1-202-549-3399 or email pks@capitolintelgroup.com

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