Wilbur Ross

Secretary of commerce

Education: Yale University; Harvard University

Significance: Wilbur Ross is a bankruptcy adviser turned financier who was on the Forbes 400 list of wealthiest Americans every year from 2004 to 2016. He joined President Donald Trump’s cabinet as the secretary of commerce in February 2017. His tenure ended after Trump lost re-election.

Background

Wilbur Ross was born on November 28, 1937, in Weehawken, New Jersey, to attorney Wilbur Louis Ross and teacher Agnes O’Neill Ross. He attended Xavier High School in Manhattan before studying English literature at Yale University. An internship on Wall Street caused him to shelve his career goal of becoming a fiction writer or lawyer. After earning his bachelor’s degree in 1959, he enrolled in Harvard Business School and obtained an MBA in 1961.

Career in Finance

Ross began working at the Wall Street investment bank Rothschild Inc. as a bankruptcy specialist in 1976. His responsibilities included reorganizing companies such as Texaco, Eastern Air Lines, and the Trump Taj Mahal Casino Resort in Atlantic City. He became the top bankruptcy adviser and ran the bankruptcy restructuring advisory practice. Skilled at negotiating deals, he earned the nickname the King of Bankruptcy.

In 1997, Ross started his own private equity fund at Rothschild. Three years later, he purchased the fund and started the private equity firm WL Ross & Co. He then began the lucrative practice of purchasing large bankrupt companies and selling them for profit. He specialized in three industries: steel, textile, and coal.

In February 2002, Ross created International Steel Group (ISG) and purchased LTV Corporation, a bankrupt steelmaker headquartered in Cleveland, Ohio, for $325 million. Taking advantage of bankruptcy procedures, he avoided taking on the company’s pension responsibilities. Those were assumed by the federally administered, privately funded Pension Benefit Guaranty Corp. (PBGC) in what was then the largest such takeover to date. In March 2002, President George W. Bush imposed an 18 to 30 percent tariff on steel imports, increasing the demand for US steel. Ross restructured the company and resumed production. He brought back many employees—this time with 401(k) plans rather than pensions—and the price of steel increased. ISG repeated the process with Acme, Bethlehem, Weirton, and Georgetown Steel Corporations, all of them in bankruptcy. By December 2003, International Steel Group went public. In 2004, Ross sold ISG to Mittal Steel for $4.5 billion, landing him on the Forbes 400 list for the first time.

That same year, Ross branched into coal and acquired the distressed Horizon Natural Resources Company at auction. He merged the company with Anker Coal Group and CoalQuest Development to form the International Coal Group (ICG), secured PBGC responsibility for pensions, and brought laid-off employees back to work, with new terms. Again his timing was fortuitous, as the price of coal soon skyrocketed and he transformed the former failed company into one of the nation’s largest coal companies. By late April 2005, ICG had gone public, earning Ross $210 million. Then, tragedy struck in 2006 when an ICG acquisition, the Sago Mine, in West Virginia, exploded and killed a dozen workers; the company eventually settled with victims’ families. In 2011, Ross sold ICG to Arch Coal for $3.4 billion.

Ross formed the International Textile Group in 2004, and it acquired Burlington Industries and Cone Mills, two textile manufacturers in Greensboro, North Carolina. The PBGC again agreed to cover some pensions, and Ross recalled workers—with new union agreements—and started production. Ross sold International Textile Group in 2016.

Ross sold WL Ross & Co to investment firm Invesco for $375 million in 2006 but remained its chair and chief strategy officer. During the global economic recession that started in 2008, he turned his interests to banking, another struggling industry. He invested in banks in the British Isles, Greece, and Cyprus, including the Bank of Ireland. He later sold his share of the Bank of Ireland and reaped nearly a 300 percent return on his investment. His practice of targeting distressed companies and turning them around through workforce reductions and, in most cases, eliminating pension plans earned him the designation of a vulture investor.

During the 2000s, Ross alternately opposed and favored free trade. While putting together ISG, he argued for protectionist measures. Once in the textile business, however, he lobbied for the Central American Free Trade Agreement (CAFTA) in 2005. Ross later spoke out against trade deals seen as harming the United States.

In the early 2020s, the billionaire continued his financial career. In 2022, a special purpose acquisition company created by Ross was organizing a merger with Atom Bank in the UK. In 2023, he disclosed in a news interview his business partnership between Aprinoia Therapeutics and Ross Acquisition Corp, companies that focus on neurodegenerative diseases. He published his memoir, Risks and Returns, in 2024.

Politics

During the 2016 presidential campaign, Ross first backed Republican contender Marco Rubio. He then donated $200,000 to Donald Trump after Trump won the Republican Party nomination in July. The following month, Ross joined Trump’s campaign as an economic policy adviser. In late November, President-elect Trump named Ross as his nominee for secretary of commerce. The Senate confirmed Ross’s nomination, 72–27, on February 27, 2017, and he was sworn in on February 28. With a net worth estimated at $2.9 billion, he became one of several billionaires and political novices in Trump’s cabinet.

During his first months as secretary of commerce, Ross focused on revising the tax code, reducing business regulations, and renegotiating trade agreements to better serve US interests. His goal was to increase private industry investments that, in turn, might increase consumer spending and stimulate growth in the sluggish economy. He supported Trump’s pro-growth actions, including executive orders that reduced regulations for mining and offshore oil and gas exploration.

Ross engendered controversy in the years that followed. He ran afoul of departmental rules regarding financial conflicts of interest, notably reporting errors and omissions and his delay in or failure to fulfill promises to divest himself of certain assets. Concerns particularly arose around his investments in foreign shipping and steel while involved in US trade policy.

Perhaps most notable was Ross's handling of the 2020 US census, a constitutionally mandated Commerce Department responsibility that affects congressional funding and representation. Court proceedings against the department revealed that Ross had decided on reinstating a question about citizenship on the census as early as 2017, long before giving the justification of assisting with enforcement of the Voting Rights Act. In June 2019 the US Supreme Court found that Ross had acted within his legal authority in requesting the question's inclusion but that his decisions as secretary were subject to judicial review and were suspect in this circumstance. Then, the following year the coronavirus disease 2019 (COVID-19) pandemic disrupted the Census Bureau's data collection, and the agency was granted an extension for its analysis until April 2021. Ross sought to conclude fieldwork by September 30, 2020, a month early, however, so that Trump could approve the final results by year's end rather than risk a successor doing so in 2021. A federal judge ruled that the count had to continue through October 2020 and upheld the April 2021 reporting deadline, as Ross's "replan" would undercount and thereby harm minority-majority areas.

Impact

During his tenure as secretary of commerce, Ross sought to stimulate US economic growth through lower taxes and deregulation. He also faced criticism for his reported ethics violations and attempts to politicize the US census.

Personal Life

Ross has two children, Jessica and Amanda, from his marriage to Judith Nodine Ross (1961–95). He was married to New York lieutenant governor Betsy McCaughey Ross from 1995 to 2000. Ross and Hilary Geary married in 2004. They own homes in Palm Beach, Florida, and Southampton, New York.

Ross is an art collector specializing in surrealist paintings. His interest in arts and culture has also been reflected in his participation on the boards of several museums.

Bibliography

Abelson, Max. “Wilbur Ross and the Era of Billionaire Rule.” Bloomberg Businessweek, 26 Jan. 2017, www.bloomberg.com/news/features/2017-01-26/wilbur-ross-and-the-cabinet-of-billionaires. Accessed 18 Apr. 2023.

Davidson, Paul. “Wilbur Ross: From ‘King of Bankruptcy’ to Face of American Business.” USA Today, 1 Dec. 2016, www.usatoday.com/story/money/2016/11/30/wilbur-ross-king-bankruptcy-face-american-business/94674990. Accessed 18 Apr. 2023.

Greenberg, Gregg. "Commerce Secretary Wilbur Ross Reflects on Washington, Wall Street and Trump." Investment News, 5 Sept. 2024, www.investmentnews.com/industry-news/commerce-secretary-wilbur-ross-reflects-on-washington-wall-street-and-trump/256991. Accessed 2 Oct. 2024.

Gross, Daniel. “The Bottom-Feeder King.” New York Magazine, 2004, nymag.com/nymetro/news/bizfinance/columns/moneyandmind/10279/index1.html. Accessed 18 Apr. 2023.

Kleinman, Mark. "Trump’s commerce secretary Ross plots £700m merger with UK’s Atom Bank." SkyNews, 21 May 2022, news.sky.com/story/trumps-commerce-secretary-ross-plots-700m-merger-with-uks-atom-bank-12618033. Accessed 20 Apr. 2023.

Lawder, David, and Jennifer Ablan. “U.S. Commerce’s Ross Says 3 Percent GDP Growth Not Achievable This Year.” Reuters, 10 May 2017, www.reuters.com/article/us-usa-trade-ross-idUSKBN1852E4. Accessed 18 Apr. 2023.

Peterson-Withorn, Chase. “What You Need to Know about Commerce Secretary Pick Wilbur Ross, Trump’s Billionaire Pal.” Forbes, 29 Nov. 2016, www.forbes.com/sites/chasewithorn/2016/11/29/what-you-need-to-know-about-likely-commerce-secretary-wilbur-ross-trumps-billionaire-pal. Accessed 18 Apr. 2023.

Rappeport, Alan. “Wilbur Ross, a Billionaire Investor, Is Confirmed as Commerce Secretary.” The New York Times, 27 Feb. 2017, www.nytimes.com/2017/02/27/us/politics/wilbur-ross-commerce-secretary.html. Accessed 18 Apr. 2023.

Rosenblatt, Joel. “Census Judge Bends Wilbur Ross and Commerce to Follow Orders.” Bloomberg, 3 Oct. 2020, www.bloomberg.com/news/articles/2020-10-02/trump-administration-s-census-violations-must-stop-judge-says. Accessed 18 Apr. 2023.

Tindera, Michela. “How Wilbur Ross Made a Fortune in Blue-Collar Industries.” Fortune, 18 Jan. 2017, www.forbes.com/sites/michelatindera/2017/01/18/how-wilbur-ross-made-a-fortune-in-blue-collar-industries. Accessed 18 Apr. 2023.

"Wilbur Ross Fast Facts." CNN, 10 Nov. 2023, www.cnn.com/2013/05/30/us/wilbur-ross-fast-facts/index.html. Accessed 2 Oct. 2024.