Business and Finance

Wall Street swindler Bernard Madoff (MAY’-dawf) calls new regulatory reform enacted after the recent national financial crises “a joke” and describes the federal government as a Ponzi scheme.

Madoff made the remarks during a telephone interview with a writer for New York magazine. The interview was published on the magazine’s website Sunday night.

Madoff did an earlier New York Times interview in which he accused banks and hedge funds of being “complicit” in his Ponzi scheme to fleece people out of billions of dollars low interest rate personal loans.

He’s serving a 150-year prison sentence in Butner, N.C., after pleading guilty in 2009 to fraud charges.

Madoff also tells the magazine his wife is angry at him for destroying their family. One of Madoff’s sons hanged himself in his Manhattan apartment on the second anniversary of his father’s arrest.

Source

If you collect reward points, make sure you read the rules.

If you hold onto your points too long, you could wake up one day to find your balance is zero

Readers often complain about loyalty plans that require them to collect or redeem points on a regular basis.

They don

Companies that act as brokers for trucking services are gaining favor with investors as the 20- month-old rebound shifts into a new phase that’s less dependent on inventory restocking.

The so-called asset-lite truckers such as Roadrunner Transportation Systems Inc. and C.H. Robinson Worldwide Inc. lease vehicles for businesses that need to ship goods, so they have more cost flexibility than companies that own and operate most of their trucks. Shares of these brokers have risen 6.9 percent since July 30, 2010, compared with a 1.5 percent decline for operators including Celadon Group Inc. and Werner Enterprises Inc., according to two new Bloomberg indexes.

“We are way past the early cycle rally,” and now see “sustainable elements to the recovery,” said Benjamin Hartford, transportation analyst at Milwaukee-based Robert W. Baird & Co., who co-wrote Baird’s 2011 freight-outlook report. As the rebound matures, investors will find “greater resiliency” in companies with flexible costs.

Trucking demand varies with the economy, accounting for 71 percent of the value, or $8.3 trillion, of U.S. goods shipped in 2007, according to the most recent data from the Department of Transportation.

The Baird report shows the recovery spanning 26 months so far, based on the Institute for Supply Management’s manufacturing index, which hit a recession low in December 2008. That’s more than halfway through an average of 40 months, which the current expansion may exceed, Hartford said. The recession that ended in June 2009 was the longest since the 43-month slump during the Great Depression, according to the National Bureau of Economic Research.

Expanding Economy

The U.S. economy likely will expand at a 3.2 percent rate this year, according to the median estimate of 63 economists surveyed in February by Bloomberg News, with exports and business spending on equipment and software poised to generate most of the growth, said Joseph Carson, director of economic research at AllianceBernstein LP in New York.

When the rebound began in the third quarter of 2009, growth was driven by government spending, along with companies that were building stockpiles and needed truckers to move their products. This made the operators more appealing to investors because their profits rise more quickly in this stage of recovery.

“I tend to favor the asset-based guys” early in the cycle, because they “are able to get rate increases as well as higher volumes,” said Kevin Sterling, an analyst in Richmond, Virginia, at BB&T Capital Markets.

Rising Stock

Indianapolis-based Celadon’s stock more than tripled to $14.79 at the end of last year from $4.47 on March 9, 2009, as the operator reported net income of $2.86 million in the quarter ended Dec. 31, compared with a loss of $2.08 million in the January-March 2009 period.

Freight volumes peaked in September and have dropped 10 percent since then, as measured by the Cass Freight Shipments Index. Momentum for Celadon stock has slowed as well; it has fallen 2.6 percent since the end of December.

The Bloomberg U.S. Truckload Trucking Index tracks the performance of Celadon, Werner and seven other operators. The Bloomberg U.S. Non-Asset Based Trucking Index tracks Roadrunner, C.H. Robinson and six other brokers. The two indexes show that shares of the operators rose 25 percent between May 30, 2008, and July 31, 2010, compared with a 16 percent decline for the brokers.

The asset-heavy companies also outperformed in 2001 and 2002, coming out of the recession that ended in November 2001. As the recovery matured, the asset-lite truckers outperformed from 2003 to early 2008.

Slashing Costs

When freight volumes started to cool off in 2007, Roadrunner responded quickly to protect profits, adopting cuts that slashed its vehicle-leasing costs by 17 percent over two years.

“The advantage we have is we don’t run empty miles,” said Peter Armbruster, chief financial officer of the Cudahy, Wisconsin, company. If customers “go from needing to do eight trips instead of 10 between our Milwaukee terminal and southern California, we just do eight. It is more efficient.”

Inventory building aided economic growth for five consecutive quarters through the third period of 2010, when it contributed 1.61 percent to the 2.6 percent gain. When companies stopped adding to their stockpiles in the fourth quarter, the reduction subtracted 3.7 percent from growth, the most since the first quarter of 1988.

Adjust Expenditures

John Wiehoff, chief executive officer for Eden Prairie, Minnesota-based C.H. Robinson, said the broker’s lower-cost model allows it to adjust expenditures rapidly in response to demand.

“We’re very proud that we were able to manage through the recession with an earnings increase in each of the past two years,” he said on a Feb. 1 conference call with investors. “We think that’s a pretty visible statement about our business model.”

Brokers like C.H. Robinson “have higher returns, very little debt and a lot of cash on the balance sheet,” along with “more financial flexibility” and fewer capital-expenditure requirements, according to Sterling, who said BB&T Capital Markets is recommending investors purchase the Minnesota company and Roadrunner.

C.H. Robinson announced in December a 16 percent increase in its cash dividend to 29 cents a share. It had $398.6 million in cash at year-end, compared with $11.1 million for Celadon.

“The asset-lite guys can act countercyclically,” said Peter Nesvold, managing director and senior equity research analyst in New York at Jefferies & Co. “As fundamentals start to improve, we have a long way we can ride.”

Source

The world economy can withstand the surge in oil prices sparked by unrest in the Middle East and North Africa so long as the increase proves short-lived, said the International Monetary Fund’s No. 2 official, echoing Deutsche Bank AG and Bank of America Merrill Lynch.

Futures for April delivery climbed to within $2 of $100 a barrel in New York today, and London-traded Brent rose to $108.57, close to the highest since September 2008, as escalating violence in Libya stoked concern supplies from the region will be disrupted. Oil in New York has gained almost 6 percent since Jan. 24, the day before the first anti-government protests erupted in Egypt.

“It’s unlikely it would make a substantial change in the global economic outlook,” John Lipsky, the IMF’s first deputy managing director, told Bloomberg Television’s “Inside Track” today. The Washington-based lender assumed oil would average about $95 a barrel this year when it forecast global economic growth of 4.4 percent for 2011, he said.

Political unrest that has swept from Tunisia to Yemen, Algeria, Bahrain and Iran in the past four weeks is fanning oil’s advance at a time when the global economy is emerging from the deepest recession in more than 50 years. U.S. consumer confidence rose to its highest level in three years this month, according to a report today. Data showed yesterday that German business confidence increased to a record in February.

While an extended $10 advance in oil cuts 0.5 percentage point off U.S. growth over two years, the world’s biggest economy will expand 3.8 percent this year, almost a percentage point more than in 2010, according to Deutsche Bank.

‘Relatively Strong’

“Economies are vulnerable to the oil price, but so far it’s looking like business and consumer confidence are relatively strong,” said Michael Lewis, London-based head of commodities research at Deutsche Bank, which predicts world growth will surpass 4 percent for the second successive year.

At least 250 people died in the Libyan capital Tripoli overnight as protests against Muammar Qaddafi’s leadership spread, al-Jazeera reported. Libya accounted for 4.6 percent of the 29.4 million barrels of oil pumped daily by the Organization of Petroleum Exporting Countries in January, making it OPEC’s ninth-biggest producer, according to data compiled by Bloomberg.

Brent may trade between $105 and $110 a barrel in coming weeks if the unrest continues, and reach a record should the violence spread to larger Middle East producers, such as Saudi Arabia, Goldman Sachs Group Inc. said in a report today. Global expansion would be hurt if there were a sustained surge in oil to about $120 a barrel, according to Deutsche Bank and BofA Merrill Lynch.

Gasoline, Heating Oil

Gasoline and heating oil rose to the highest levels in more than 28 months today, rising more than 5 percent before paring gains. Gasoline for March delivery added 7.36 cents, or 2.9 percent, to $2.6249 a gallon at 11:25 a.m. on the New York Mercantile Exchange. Prices touched $2.681, the highest level since Sept. 25, 2008. Heating oil for March delivery rose 9.87 cents, or 3.6 percent, to $2.8116 a gallon after touching $2.8589, the highest level since Oct. 2, 2008.

The risk of costlier crude is that it may deprive consumers of purchasing power, hurt corporate profits and force central banks to raise borrowing costs to curb price increases. Inflation in China, the world’s biggest energy consumer and fastest growing major economy, was 4.9 percent in January, above the government’s target.

‘Serious Threat’

“The global recovery now faces a serious threat from a sustained oil-price spike,” said David Hufton, London-based managing director at PVM Oil Associates Ltd.

About $10 of the recent increase in the oil price relates to tension in the Middle East and Africa, with the remainder a reflection of the strengthening global economy, said Julian Jessop, chief international economist at Capital Economics Ltd. in London.

“The old rule of thumb was that a $10 increase reduces global growth by half a percent, but if that still held then the world would now be in a deep recession,” said Jessop, a former U.K. Treasury official. “The point is oil prices are high, but the global economy is in a much better position to cope so it’s not too big a problem.”

U.S. government data also show the economy imported less than half of 1 percent of its oil imports from Libya in the past two years.

Hedged

“The good thing is we’re seeing generally positive economic conditions and the higher oil prices we’re seeing don’t seem to be having an impact on the economic climate,” Willie Walsh, chief executive officer of International Consolidated Airlines Group SA, said in an interview today at an aircraft finance conference in Geneva sponsored by ICBI. “Most airlines are hedged.”

Deutsche Lufthansa AG’s hedging contracts for this year mean the airline is saving money when the price of crude oil rises to more than $88, Stefanie Stotz, a Frankfurt-based spokeswoman for the company, said today.

The world recovery would be jeopardized if oil climbed to average $115 a barrel this year and $130 next year, according to analysts at BoA Merrill Lynch. That would return the world’s energy bill as a share of the economy to the 9 percent level of the 1980s, when costlier crude tipped consuming nations into a recession, they said in a Jan. 25 report.

Still, that’s unlikely because energy demand is set to ease by almost half this year to an average of 1.5 million barrels per day, inventory levels are near a five-year high, OPEC nations have more spare productive capacity than in 2008 and more Iraqi crude is on the way, according to the report.

At Risk

Not all economies are safe, say the BofA Merrill Lynch strategists. Turkey, so-called peripheral European economies, India, South Korea and Indonesia could start to suffer if oil averaged $110 to $120 a barrel this year, while a range higher than that would start to pinch Germany, Japan and China.

“We’re hoping capacity will be brought to bear so it will continue to support our economic recovery,” Deputy U.S. Energy Secretary Daniel Poneman told Bloomberg Television.

Mohammad Ali Khatibi, Iran’s governor to OPEC, said the organization is supplying more oil than the world market needs, and it has no plans to call an emergency meeting.

“There are some temporary supply issues, but stocks are high and there is no permanent shortage in supply,” he said.

Source

The European Central Bank said Monday it bought euro711 million ($971 million) in government bonds last week as concerns over Portugal’s debt crisis flared up again.

The figures include purchases made Thursday and Friday the week before, when analysts said the ECB started buying bonds again after a two-week break.

Because of the way the ECB settles its bond purchases, transactions made late in the week are reported with a delay.

Since it started its bond buying program in May, the Frankfurt-based bank has spent about euro77 billion on the bonds of highly indebted countries like Greece, Ireland and Portugal.

Buying bonds supports their prices and helps keep a government’s borrowing costs in check.

Monday’s figures represent the largets weekly purchase since late December, when fears spiked that Europe’s debt crisis, which has already pushed Greece and Ireland into multibillion-euro international bailouts, would soon spread to Portugal _ and possibly much larger Spain high quality business cards.

However, they are still far below where they were in early summer, when the ECB often spent several billion euros a week in an attempt to control market panic in the wake of the bailout of Greece.

Concerns over Spain’s ability to repay its debts have abated slightly, but the yields, or effective interest rates, on Portuguese bonds hit a euro-era high last week. Most economists believe that an international rescue of the country is only a matter of time.

In top of its high public debt, Portugal’s economomy has been growing at an aenemic rate while households have been spending more than they earn.

Source

In the last year, Brown Shoe Co. has refined its strategy to focus on the healthy living category as one of the key avenues for its future growth.

“But we’ve realized we couldn’t really win in this space without an athletic play,” Diane Sullivan, the Clayton-based footwear company’s president, said in a conference call Friday morning with analysts.

So the company’s acquisition this week of California-based American Sporting Goods Corp. helped round out its portfolio in this realm, she said. American Sporting’s main athletic brands are Avia, Ryka, and AND1.

Brown Shoe acquired the company on Thursday for $145 million in cash and $6 million net debt.

This is Brown’s largest acquisition since it bought Bennett Footwear Group for $202 million in 2005. That move brought more upscale brands such as Via Spiga and Franco Sarto under Brown Shoe’s umbrella.

American Sporting Goods has been on the market sporadically since at least 2006 low interest personal loan. But Sullivan said Brown Shoe only looked at the company more recently as it sought ways to expand its healthy living category.

“As we looked at what companies and brands would take us into those swim lanes, it stood out as an opportunity for us,” she said in an interview Friday afternoon. “It was really the right time, right place.”

Brown Shoe already has the comfort-focused Naturalizer brand as well as green-friendly Naya brand that also fit in the healthy living category. Its only athletic shoes are under Dr. Scholl’s. But Sullivan also noted that Brown Shoe’s Famous Footwear stores do nearly half of their business in athletic footwear.

Not only will the acquisition immediately add an estimated 10 to 12 cents to Brown Shoe’s earnings per share, but Sullivan said she thinks American Sporting’s brands have been “underpenetrated”

Did somebody say America was having a hard time getting back to work after the financial crisis and ensuing recession? Forget the dopey career counselors who are coaching you to earn a new degree. There’s a job sector poised to enter a new golden age, and it doesn’t even require a high school diploma. So all you aspiring millionaires had better listen up.

“This is a perfect time if you want to be a crook,” says Joseph Borg, the 16-year veteran securities regulator who runs the Alabama Securities Commission. Borg, who has seen his share of creepy wrongdoers, doesn’t mean just any kind of crook, of course. He’s talking about lawbreakers who sweet-talk investors out of their money with everything from misleading products and promises to bogus tax shelters, real estate pools and Ponzi schemes.

Why now? Because everything is going right for you if you’re in the business of cheating investors, that’s why. In fact, I’ll count down 10 good reasons:

10. The nation’s biggest securities regulator, hardly a paragon of effective policing in the first place, is being neutered. Budget constraints at the Securities and Exchange Commission have meant putting plans on hold for a new Office of the Whistleblower, among other stalled SEC projects. If you’re a bad guy at a brokerage firm looking to make a little mischief, you can rest easier about the risk of a colleague ratting you out for fun and profit.

9. If you’re looking for easy marks, demographics are on your side. The over-60 crowd is panicked about the soundness of the Social Security system and afraid of the stock market. The 75-plus crowd, long enamored with certificates of deposit, is freaked out that interest rates are so low. The former credit- card junkies now in their 40s and 50s have lost big on their McMansions and want to make a quick recovery. These groups are desperate for returns, making them targets for fraud.

8. The trend is your friend if you’re hunting for a new idea for a bogus product. Inflation worries are picking up, and if it kicks in enough to hurt, the public will be sitting ducks for schemes supposedly backed by real estate, gold or silver. If you see a rising consumer price index, new investment products with names like “The Inflation Buster” will not be far behind, says Borg, the securities regulator.

7. Another trend favoring swindlers: Rising gasoline prices that may lead to new opportunities to package oil and gas schemes. Once gasoline hits $4 a gallon, investors let down their guards and become more vulnerable to energy-related scams, Borg says.

6. State watchdogs are getting more work just as budgets are under pressure. About 4,000 investment advisers who previously were regulated by the SEC will begin to be policed by the states this year. That may be bad news for the advisers — 3,000 of whom have never been examined by the SEC — because state regulators say they’ll make inspections a priority. But some states are reducing oversight in other areas to make time for the new adviser workload. The cagey crook will find out which activities are getting less scrutiny.

5. Deregulation is the “it” thing in Washington, and that’s a plus if you don’t like regulators breathing down your neck.

4. Technology is opening new frontiers for cheats. The May 6 so-called flash crash that took the Dow down almost 1,000 points in a matter of minutes was a head-scratcher for regulators who work with the tech version of Edsels while traders use state-of-the-art systems. The potential for manipulation is huge, says Denise Crawford, securities commissioner of the Texas State Securities Board. “Market regulators are so behind in that whole area that I’m not sure they will ever catch up,” she says.

3. Elizabeth Warren probably won’t be around for long. Republicans hate her and she doesn’t have a permanent appointment to her job as head of the new Consumer Financial Protection Agency. So if your area of expertise is mortgage fraud or bait-and-switch bank products, it might just be a matter of waiting it out until the pro-consumer regulator is shipped back to her gig as a Harvard University professor.

2. Business risk is low. We’re just stumbling back from a financial crisis, and companies that helped fuel the meltdown with aggressive accounting or dicey disclosure got bailed out, not indicted. So what are you worried about?

1. Even if you do get in trouble — and I’m not saying that’s likely — there are great lawyers around to get your career back on track. Hire one of the stars who cycled through the SEC before settling in at a law firm. Before you know it, your lawyer will be swapping stories about the old days over drinks with an agency pal, and you’ll be back in the game faster than you can say “regulatory capture.”

Susan Antilla is a Bloomberg News columnist. The opinions expressed are her own.)

Source

Swaziland, Africa’s last absolute monarchy, will slash spending and fire thousands of state employees as it tries to ease a fiscal crisis, Finance Minister Majozi Sithole said.

In a budget to be announced on Feb. 18, the government will introduce a value added tax and slash recurrent spending, such as salaries, by about 20 percent, Sithole said in an interview yesterday in Mbabane, the southern African nation’s capital. It will also cut support for state-owned companies by 10 percent in the fiscal year through March 2012.

Budget cuts “have to be very large,” Sithole said. “For us credibility is very important. We would not want to have a budget, but not have the physical cash to support it.”

Swaziland, which borders South Africa and whose 1.2 million people are ruled by King Mswati III, released an International Monetary Fund-backed plan last year to counter reduced income from the Southern Africa Customs Union. Lower imports because of recession in neighboring South Africa during the global financial crisis cut funding from what accounted for about 60 percent of state revenue. SACU pools customs payments from South Africa, Lesotho, Botswana, Namibia and Swaziland.

Swaziland’s budget deficit will probably widen to about 16 percent of gross domestic product in the 2011-12 fiscal year, the IMF said on Jan. 24.

Customs union money tumbled about 62 percent last year, Sithole said.

“For the financial year 2010-11 we were seriously affected by our SACU receipts,” Sithole said. “We have over the years relied heavily on the revenue received from SACU.”

Salary Freeze

The government plans to freeze state salaries and cut 7,000 civil servant jobs, about 20 percent of the total, to bring down a “huge” wage bill, he said. Budget spending was 10.1 billion emalengeni ($1.39 billion) for the year to March 2011.

The move will add to unemployment which stands at about 43 percent, according to the government.

The government plans to raise taxes and has applied for a $100 million loan from the African Development Bank as it struggles to raise cash. The central bank sold one-fifth of the 750 million emalengeni ($103 million) of seven-year bonds it offered on Jan. 26. The AfDB loan depends on an endorsement from the IMF of the country’s plans to cut spending, Sithole said. IMF officials will visit the country this week., he said

Economic growth will probably be unchanged at 2 percent this year, while inflation is estimated to accelerate to 6 percent in 2011 from last year’s 4.5 percent as oil prices and other imports costs rise, Sithole said.

Source

Japan’s central bank on Tuesday upgraded its assessment of the world’s No. 3 economy amid an upturn in exports and production. It left interest rates unchanged as expected.

The Bank of Japan’s nine-member policy board voted unanimously to keep the overnight call rate target at zero to 0.1 percent. The central bank has maintained the interest rate in the range of zero to 0.1 percent since October.

Citing recovering growth in exports and production, the central bank upgraded its assessment of Japan’s economy, which slipped to the world’s third largest after China in 2010 electronic check payday advance.

“Japan’s economy is gradually emerging from the current deceleration phase,” the bank said in a statement. “Japan’s exports and production are showing signs of resuming an uptrend.”

Its previous assessment had said that Japan’s “recovery seems to be pausing.”

Exports have been a key driver of Japan’s economy, which has relied on demand from the rest of the world to offset lackluster conditions at home.

Source

People who visit David Farr’s office expect to see his “rally monkey,” a little stuffed animal he keeps on a perch.

“People get a kick out of him,” says Farr. “Sometimes I throw him at people.”

Or he’ll be swinging one of the two baseball bats he keeps in his office. “I find it very relaxing,” says Farr, a baseball fan since boyhood.

People at Emerson, where he is CEO, don’t mind. But back in the 1990s, when he ran Emerson’s Asian operation, his bat provided a lesson in cultural diversity. In Hong Kong, he used the bat-swinging routine to calm raw nerves until a secretary informed him that “people are afraid to come in here because they think you’re going to hit them.”

Farr is no stuffed-shirt CEO. Upbeat, talkative, jocular, he will sally forth on his “staunch conservative” political views or the relative merits of manufacturing in the U.S. versus Asia.

Farr commands a company with $21 billion in sales, $2.2 billion in profits last year and plants around the world. He’s also the Citizen of the Year for 2010, an honor bestowed by a committee of previous winners.

Farr is president of Civic Progress, and he serves on the executive boards of the Muny and the Boy Scouts’ Greater St. Louis Area Council. In 2007, when Farr was fundraising campaign chairman for in the United Way of Greater St. Louis, the charity raised a record $68.8 million.

Under Farr’s leadership, Emerson and its charitable trust last year donated about $13.4 million to area civic institutions, including St. John’s Mercy Children’s Hospital and its Emerson Neonatal Intensive Care Unit; Tower Grove Park; the Center of Creative Arts; the Herbert Hoover Boys & Girls Club; and the Mathews-Dickey Boys’ and Girls’ Club. Emerson’s $5 million commitment to the St. Louis Zoo’s railroad was the single largest contribution in zoo history.

“He’s a very intense guy. You’ll never leave a meeting without knowing where he stands on something. He not only says what he thinks, he does what he says,” says Nicholas Heymann, stock analyst at Sterne Agee & Leach in New York, who has followed the company for years.

That directness causes waves. Two years ago, after complaining that the policies of President Barack Obama’s administration threatened business, he said he was “not going to hire anybody in the United States. I’m moving.” He now calls that an exaggeration, noting that he’s hired Americans since. But he doesn’t back off the message.

Investors who held Emerson stock when Farr took over in 2000 have seen a 112 percent total return, versus 18 percent for the S&P 500 Index of large-company stocks.

That’s what counts to Wall Street. “He’s very good, and well regarded in the investment community,” says Rich Kwas, analyst at Wells Fargo Securities in Baltimore.

Kwas credits Farr for deftly managing the company through the Great Recession, in part by “moving head count to low-cost countries,” he says.

TEACHER’S SON

Farr, 56, began life in Corning, N.Y., where his father, Roy, taught math and coached soccer, basketball, baseball and football. The elder Farr later got an advanced degree in math, joined Corning Inc., and rose to be a plant manager.

Corning transferred the family to North Carolina, then to England, where Farr attended a British private school. A tall man, he made the all-England high school basketball team and played across Europe.

The foreign experience changed his life. “That gave me the opportunity to develop as a broad-thinking individual. It gave me a much broader perspective on life.”

While in England, his mother suffered a cerebral hemorrhage. She spent November through March in a coma and died in 1973 at the age of 41. “We were there every day but one,” Roy Farr recalls.

David Farr credits much of his success to his father, with whom he’s still close. “My dad was clearly a very disciplinary kind of guy. He was a tremendous athlete. He got me involved in baseball very early in life low fee payday loans. He was also very good with people,” said the CEO.

His father remembers the time his young son, after playing a Little League game as catcher, turned to him and said: “Dad, it doesn’t help me learn to have you back there yelling at me all the time.”

But the experience set him up well to deal with a future boss. Chuck Knight headed Emerson from 1973 to 2000 and ultimately chose Farr as his successor. Known for charisma that strayed into anger, Knight had a reputation for chewing out subordinates who came to him unprepared.

To Farr, that approach was old hat. “He’s no different than my dad,” Farr said. “I had the ability to get along with the guy from day one.”

Farr enrolled in Wake Forest University in North Carolina, where he met his wife, Lelia, the daughter of an admiral. They got engaged in his senior year and married after graduation.

With a degree in chemistry and a minor in physics, Farr became a construction worker and a night manager at a fast-food restaurant. The blue-collar start was deliberate. Both Farrs wanted master’s degrees in business, but they couldn’t afford to go at the same time. So, they staggered attendance, with Farr working while his wife studied, then reversing the process.

JOBLESS IN ST. LOUIS

Farr came to St. Louis jobless, as a trailing spouse with an MBA from Vanderbilt. Lelia Farr had taken a job at the Price Waterhouse accounting firm here. Farr interviewed around town and landed at Emerson in 1981. (He and Lelia now live Ladue; they have two grown children.)

Even today, most consumers know little about Emerson. It makes industrial automation systems, power controls for data centers, compressors, climate control equipment and other things consumers rarely see. Its customers are mainly other businesses.

After steadily climbing the corporate ladder there, through departments ranging from finance to tools, Farr has advice for young people who want to sit where he does:

“Work broadly across multiple disciplines. Take lateral moves - finance, planning, operations. Try to be multicapable,” he says. “Don’t be in a hurry: What you’re trying to do in your whole life is to find that opportunity and make a difference.”

Farr found it in Asia in the 1990s, where he persuaded the Chinese to let Emerson invest $100 million in the first completely foreign-owned operation in the country, at a time when China insisted on joint ventures.

Back in the U.S., Knight put him in charge of the company’s biggest business, process management, in 1997.

By 2000, Knight was running a competition among several internal executives to see who would succeed him. Farr won. He has since led the company away from a strategy of being the best-cost producer to developing new and innovative products, says analyst Heymann.

Farr has been pushing Emerson out of low-margin businesses and toward businesses where technology adds value. The company says that new products make up 37 percent of sales.

ANTI-BIG GOVERNMENT ANGST

Farr, meanwhile, isn’t shy about telling the government what to do - he wants it to shrink and get out the way of business.

At an investor conference in November 2009, he complained that Obama’s policies on the environment, health reform and labor could “destroy” U.S. manufacturing.

“What do you think I’m going to do?” Farr asked the audience. “I’m not going to hire anybody in the United States. I’m moving.”

Does he believe that today?

“You have to understand my style,” says Farr. “I have a tendency to push on the edge.”

He added: “I had a very strong message that, if they don’t change policy, I will never invest in the United States again. … Never is a stupid word, because I invest today. I hire people in the U.S. But I still have the same message today.”

Source