Stories, Musings & The Vision Thing

Capitalizing on Capitalism

OTTO-Buidlings-Pano-Touched-Up-NEW

Otto Engineering, photo from their site

What comes to mind when you think about capitalism? Innovation, creativity, entrepreneurism? Or something concerned more with profit than people? Like most things in life, it depends on how you look at it. While Hollywood makes lots of money railing against evil businessmen, there is definitely another side to the story.

Christopher Hankins Daily Herald

Otto Engineering factory site by Christopher Hankins Daily Herald

Personally, I get interested when entrepreneurs show a driving vision to make something out of nothing. At its best, their brand of capitalism gives us hope that tomorrow might be better than today. Not just because they provide services or make things. But because some entrepreneurs think that what they’re doing should not just benefit themselves, but also help their community, their customers and the people they employ. In the old days, you might say they were out to serve the greater good.

If this sounds too blue sky, meet one hard-nosed manufacturer who is definitely making a difference – Tom Roeser.

CNN Money site

Otto Engineering President Tom Roeser, from the CNN Money site

Do you believe in altruism? On the face of it, what Tom Roeser is doing flows from a sense of self-interest. He has a company – he wants his company to thrive – and what he’s doing for the town is also helping his company grow.

What is he doing? Because more than 10% of his town’s homes have been foreclosed and abandoned, he’s buying the most dilapidated houses, fixing them up and selling or renting them – at below market rate.

Michael Smart Sun-Times Media

photo by Michael Smart Sun-Times Media

Pretty unusual for a businessman, you might say. But his factory is profitable – and those profits give him the capital to invest. His goal is to break even, recoup his expenses and reinvest to renovate more distressed homes. That way, his town’s housing problems won’t be a blight on his factory’s future. That’s why he decided to take action.

Here’s a news piece from CNN Money, published April 2, 2013.

Often, innovation comes from need. When Roeser first tried to get help for the problem, he was rebuffed:

“I went to the town, the county; I went to Habitat for Humanity; I told them that we needed to do something about this neighborhood. I couldn’t get help from anybody.”

So he went forward on his own. His initial thought was to rent and sell the homes at a reduced rate to his employees. Which he did.

“The plumbers make money, the electricians make money, everybody makes money and the people get a new home at cost. I come out of it whole.”

His efforts have become a catalyst for revitalizing the town’s neighborhoods. When he renovates a home it inspires other owners to fix up their homes, too. Crime has gone down, he’s planning to renovate some commercial buildings in town and last year the county received a $1.5 million grant to fund other neighborhood stabilization projects.

Paul D'Amato NYT

photo by Paul D’Amato, NYT

What’s he like as a factory owner? A few years ago Alex Kotlowitz, a NYT reporter, spent some time with him:

Nearly half of Otto’s 502 employees are Hispanic, and Roeser insists that they learn English. Prospective hires must first pass a language test. He requires supervisors to give instructions in English.

Still, he has a full-time instructor to teach English to his employees; they won’t receive a pay raise until they become more fluent. Add to that this observation by Kotlowitz:

 Roeser takes great pride in his relationship with his employees. Most call him by his first name. Each year, he gives them a picnic, and at the one I attended earlier this summer, Roeser knew the name of just about all the employees there, as well as their spouses.

Whether you see him as patronizing or patriotic, selfish or sympathetic, Tom Roeser has gone to a great deal of effort to make a difference in his community.

I like knowing that he’s multi-dimensional. Regardless how the media likes to portray it, we don’t really live in an either/or world. Rather, many contradictory things are true at the same time. So whether Tom Roeser is motivated by altruistic or selfish reasons, in the final analysis I think what he’s accomplished is quite remarkable.

Neighborhood-Cropped

photo from the Homes by Otto site

What do you think? Leave a comment and let me know.

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2 Comments

  1. I agree with this perspective. We have several pieces of property that we use for the greater good that helps us pay some bills that are mostly related to property expenses. These properties are investments mostly. I know others who do more and reap greater rewards.

  2. Like you, Dan, I admire Roesner’s undertaking. But I’m saddened we have to return to the 19th century-style company town, because decades of trickle-down economics have decimated the middle class wage. We won’t live to see what Roesner’s heirs do, but I would wager they’ll turn his burg into Pottersville.

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