How one Filipina steered the course of one
of the most successful business enterprises in AmericaBy Regina Balane
One blustery morning in December 1993, the board of directors at TLC Beatrice International Holdings Inc., a conglomerate of 64 companies in 31 countries, gathered for an emergency meeting at the firm's Manhattan offices. After six straight years of strong growth, the nation's largest African-American owned conglomerate was floundering. Europe, where most of its businesses were located, was in its worst recession in decades. The competition was gaining ground. Shareholders were getting impatient, urging the board to make the company public.
After that meeting, Loida Nicolas Lewis was elected to assume the position as TLC's chairman. With that announcement, a saga began, which, when it was over, would see a business empire go beyond its original ambition and give its investors more profit than they had ever expected.
Ironically, the announcement was greeted with skepticism. Only six years earlier, Loida Nicolas Lewis’ late husband, former chair and CEO Reginald F. Lewis, had catapulted the company to the Black Enterprise Industrial/Service 100 List -- the first African-American owned enterprise to exceed the billion-dollar mark.
In a country as race conscious as the United States, Reginald Lewis had hurdled obstacles that would have discouraged other investors from minority communities. A relentless visionary, he was by 1991 in Forbes Magazine’s list of 400 wealthiest Americans. By the time of his untimely death, in January 1993, TLC Beatrice, earning revenues of over $2.5 billion, had made him the wealthiest African-American in the country.
But his work had only just begun. He left behind his widow, Philippine-born Loida Nicolas Lewis, and two daughters, Leslie and Christina. How Loida Nicolas Lewis steered the company to achieve Reginald's vision -- and to go beyond everything he had imagined -- is a story in a way similar, yet remarkable and unique on its own.
“Reggie was my best tutor,” demurs Loida, crediting her business savvy to the fact that she paid “one hundred percent attention” to her husband.
But Reynaldo P. Glover, a classmate from Harvard Law School who introduced them on a blind date 30 years ago, and TLC Beatrice's executive vice president and general counsel, says, “Loida was unassuming and laid back but educationally and intuitively brilliant. Reg was incredibly brilliant. They were both brilliant. They were soulmates. It was a terrific team.”
Both super-achievers, their partnership set the stage for what was to be a series of record-breaking milestones in the history of African-Americans and Asian-Americans. Reginald graduated from Harvard Law School after being admitted without taking the entrance exam. Loida graduated from the University of the Philippines, passed the bar, and after settling down in New York, passed the New York State bar, the first Asian American woman to do so without having studied law in the U.S.
As working spouses, they pursued their law careers differently. She worked for Manhattan Legal Services, focusing on the problems of an underprivileged client base in East Harlem -- unemployment insurance, social security, discrimination, housing. Later, she worked as General Attorney for the Immigration and Naturalization Service for ten years. She left the INS in 1988, when her husband decided it would be better to manage the various companies owned by TLC Beatrice in Europe, and moved the entire family to Paris.
In her meetings with various business units in Europe and her speeches before organizations, universities and schools, Loida always stresses that Reginald encountered a string of setbacks at least three times before he finally met with success. After the third setback, she could see that he was close to giving up. A quiet presence, she always provided reserves of energy and strength for him. “I was the cheerleader, urging him on,” she says.
Before moving to the investment side, Reginald was a corporate lawyer for the Minority Enterprise Small Business Investment Companies, a venture capital. It was an experience that would set the foundation for his later success in takeover deals. But shortly thereafter he began to grow disenchanted with the vicissitudes of this area of law practice. Tired of the way clients dismissed his services apparently on a whim, he decided to leave his law practice and do corporate acquisitions on his own. “This is not the way I want to spend the rest of my life,” he told himself. “I’ve got to go to the other side of the table.”
It wasn’t going to be that easy. But after years of intricate negotiations that would boggle the mind of the most skilled thriller author, he was able to acquire what would be the flagship of a successful business empire: TLC Beatrice International.
Reginald Lewis always believed that hard work and dedication took a person where he wanted to go. He also believed that talking about a deal during its early stages could jinx the deal, and so he couldn't discuss it with anyone. The one person he talked to was his wife Loida.
Expecting to be just the owner, he ended up managing the company. He uprooted his family from New York, moving to Paris in 1988 to be closer to all the plant facilities and operations. His energy was relentless, flying the company jet in and out of Paris, London, Dublin, Barcelona, Milan, Brussels and Grand Canaria. Close associates all had trouble keeping up with him, and no one looked forward to joining these frequent trips to visit Beatrice plants and meet key managers and minority shareholders.
But by 1993, his relentless energy would take its toll. “(Reginald) worked on Beatrice for five years until he was diagnosed with brain cancer,” recalls Loida. “In six weeks he passed on. It was devastating. I was catatonic, living on automatic pilot. But I kept the faith, and in the darkest of nights, I just reached out and said, Lord, you have to help me.”
His death left the board of directors, officers, employees and shareholders through a great deal of turmoil. Glover recalls: “That is what happens when you take an icon like Reg Lewis away from a conglomerate like TLC Beatrice. Shareholders were getting restless and employees had lost their shining bright light.”
Soon, news about his flagship company was sobering. By September 1993, TLC Beatrice was in trouble. Europe’s prolonged recession cut into the company’s earnings since almost all of its businesses were based there. Several shareholders, believing it was the only way to make a quick exit on what they thought was a great investment turned bad, demanded that the company be taken public.
“By the end-1993 the company was losing money,” recalls Glover. “There was organizational confusion with respect to its purpose and destiny. You pull out an icon like Reginald F. Lewis out of a business, a vacuum is created.”
Such a colossal figure could not be replaced easily, not even by his widow - or so most people thought. “She was not immediately accepted,” adds Glover. “Managers of the business units across Europe accepted her eventually, but not until she was tested.”
But it would not be long before everybody realized how appropriately his widow filled his shoes. Armed with entrepreneurial talents, matched by legal acumen, negotiating skills and a sincere concern about the people “behind the numbers,” as well as years of experience as a lawyer servicing underprivileged communities in Manhattan and the INS, Loida Nicolas Lewis was going to prove she had not just her husband's talent, but a management style all her own.
When she took over TLC Beatrice International, she immediately assessed the situation and asked herself, “What do I have here? What did my husband leave behind?”
She knew she had to complete the work he had left behind and finish it the way he would have wanted it. She was so certain of this goal and how profoundly personal it was, that she could not take the risk of letting anyone else run the company.
Each morning, she took ten minutes to take stock of the day, meditating and reading passages from the Bible. These moments of contemplative silence helped her collect her thoughts before she proceeded with a full day ahead of her.
Company operations were overseas, requiring her to travel a great deal. The five years her entire family lived in Paris made her familiar with the nuances of doing business in Europe. She chose not to duplicate the frenetic pace with which Reginald oversaw the company. While he blitzed through several cities in a single day, squeezing in an hour or two to meet managers and walk through various plants, she spent more time getting to know the business intimately.
She would spend half a month in Europe, maintaining residence in Paris as her base. She quietly observed operations to familiarize herself with the circumstances and the people “behind the numbers.” In France, she would spend a day in various Franprix and Leader Price grocery stores owned and managed by TLC Beatrice, observing customers in the supermarkets. Like her husband, she too was obsessed with what produced the numbers that kept sales and profits flowing in. She took his management style one step further, however, devoting her time not just to managers and key personnel, but also the staff: the door keeper, the beverage mixer in Belgium, the French sales crew, the Spaniards who supervised the peeling of oranges for the famous ice cream cups of Helados La Menorquina, the Irish ladies who peeled potatoes for the Tayto potato chip plant in Dublin.
Her guiding principles have always been prayer, goal-setting, and obedience to an inner code of conduct. In business dealings, her golden rule is simpler and more time-tested: Do unto others as you would have them do unto you.
“She was not just a wonderful wife. She was the business partner of Reginald F. Lewis,” says Gerry Schwartz, who heads the Toronto-based firm Onex, which bought the Canadian business from TLC Beatrice. “She understood his strategy. It's her family's money at stake. She understands the business. Why shouldn't she step in and run the company?”
“The first year was very challenging,” Loida says. “It was basically putting out fires. We put our shoulders to the yoke, and we worked hard.”
With a holding company headquartered in Manhattan, she managed the diverse conglomerate by way of consensus. She regularly communicated with everyone so that they all knew and understood her vision for the company. “At the macro level my goal was to maximize the value of the company,” she says. “At the micro level, I was the cheerleader. My husband had a forceful personality, and my role when he was alive was to constantly cheer him on and so it was a natural for me to be cheerleader to my managers.”
Armed with a remarkable fluency in Spanish and French, she was keen on adapting to the local habits and customs of the countries where TLC Beatrice still had extensive operations.
“I was fortunate that throughout the Beatrice years, Mr. Lewis saw to it that I met all of his business associates,” she says. “My transition to chairmanship was not rocky in terms of acceptance. A lot of goodwill for my husband passed on to me when I took over.”
Backed by seasoned senior managers in New York and the local CEOs managing the business units in Europe, she created an executive management team, surrounding herself with old friends and associates of her husband.
It was quickly becoming evident that a new kind of leadership, equally driven and equally focused, was underway. Immediately after the board elected her as chairman in December 1993, when her consultants told her it was impossible, she was able to raise $20 million in bridge loans to stem the company's cash flow problem. When she decided it was appropriate to sell the corporate jet, no one believed that her prospective buyer could source the funds to close the acquisition. The buyer came up with the money and she sold it for $14 million. She also moved the headquarters from the entire 48th floor to one third its size on the 39th floor and, with generous separation pay, she dismissed half of the corporate staff.
All these moves reduced corporate overhead by fifty percent. In July 1994, when she formally assumed the post of CEO, she reviewed the operations of all the business units and initiated a corporate austerity program, disposing non-core assets and non-performing or sub-par business units.
“We sold the operating units that were losing money. But we had to determine which were the businesses we had to maintain, and retain as the core units. Once we did that, we had to study how to manage the core businesses better. We redefined the mission for the company, in order to redirect the business to achieve its maximum potential.”
From its debt of $350 million, which she inherited when she assumed office at TLC Beatrice, the company soon had a long-term capital structure that was manageable and affordable. All these aggressive moves stabilized the company and enabled her to execute plans for growth and expansion
Recalling a letter Reginald once wrote to Colonel William Smith, Jr. of New Jersey in July 1987, in which he stated, "I continue to believe quite strongly that maintaining a low profile is the best strategy for achieving good results,” she declined interviews with the media until November 27, 1994, when the New York Times ran a full-page feature on her. In that article, reporter Tony Chapelle narrated that David Wells, an analyst at Bear Stearns, had estimated the market value based on cash flow of TLC at $729 million.
Loida Nicolas Lewis insists that her primary concern is to enhance the business to maximize returns for shareholders. “My husband was not in the business of creating an empire,” she says. “He was in the business of creating wealth.”
Her hard-nosed approach to business was coupled with a keen interest in the people behind it. She kept in touch not only with the people who generated the numbers in the office and plant sites, but all the way down to the janitor who kept the plant floors clean.
“People make the business,” she says. “The moment a company loses touch with employees and customers, that company suffers.”
During his time, Reginald Lewis gathered all the managers and CEOs of the local business units all across Europe together once a year to meet and discuss the business.
“When I took over, I turned that annual gathering into a semi-annual one,” says Loida. “The founding entrepreneurs, who held the minority interests in our business, came from generations of fathers and sons. We brought them all together twice a year. The potato chip plant manager from Ireland appeared to have nothing in common with the ice-cream maker from Spain or the beverage plant manager from Belgium.”
But she was aware that they did have something in common, one unifying element in their diversity. They were all people. They were the ones managing the local business units to get TLC Beatrice to achieve its overall goal. They were responsible for supervising people,
Amigo Warfare, a new collection by Eric Gamalinda following his award-winning Zero Gravity, has recently been released by Cherry Grove Collections, an independent press based in Cincinnati, Ohio. Begun in 1998 and finished in 2005, the collection draws on the poet’s experience as an immigrant and as witness to the martial law years in the Philippines, and is probably the most political of Gamalinda’s poetry, a virtual chronicle of life in America during the Bush years. Featuring cover art work by renowned Guatemalan photographer Luis Gonzalez Palma, who personally gave his permission to use his work for the book’s cover, Amigo Warfare opens with this quote from filmmaker Michelangelo Antonioni: “If I had to sum up my impressions of America, I would list these: waste, innocence, vastness, poverty.”
y (Alice James Books, 1999), as well as a fellowship in fiction from the New York Foundation for the Arts. He won the Philippine Centennial Award for his novel, My Sad Republic (University of the Philippines Press, 2000), and co-edited an anthology of Filipino American prose and poetry, Flippin’: Filipinos on America (Asian American Writers Workshop). Gamalinda is also a video artist and has won prizes from the Cultural Center of the Philippines’ Independent Film and Video Festival. Last spring, he was nominated for a residency at Civitella Ranieri Foundation in Umbria, Italy, where he worked on a new collection of poems. He has also been artist-in-residence in various other foundations, including the Rockefeller Foundation in Bellagio, Italy, Chateau de Lavigny in Switzerland, Chateau de La Napoule in France, Fundacion Valparaiso in Spain, Hawthornden Castle in Scotland, and the Corporation of Yaddo, the MacDowell Colony, the Virginia Center for Creative Arts, and Ledig International Retreat for Writers in the United States. Many of his literary and visual work can be viewed at his web site, http://mysite.verizon.net/vzeslrlq/gamalinda/