Friday, September 11, 2009

Financial Edge: How to succeed in business by really trying

Written by 

By Tony Kruglinski, Financial Editor

anthony-kruglinski-web.jpgI would like to use this month’s Financial Edge to comment on the standards of honesty and ethical behavior that we have come to expect in our industry as well as to say goodbye to GATX’s Jeff Riley (pictured, below), who retired at the beginning of August. Jeff was the ultimate practitioner of what could be model professional standards for anyone in our business. I would like to use Jeff’s professional life as a bit of a primer for anyone new to our industry and seeking to succeed.

Honesty and ethical behavior: When Jeff Riley and I were in this business (buying, selling, leasing, and financing rolling stock) in the 1980s, there were a lot of people running around trying to put together deals for what was then a market of significantly surplus rail equipment. The problem was that many of those seeking to broker transactions were dishonest about having an agreement with the owner to represent the equipment. It was like the Wild West! If they could secure employment for unemployed cars or locomotives, they could go to the owner or and pitch the deal. Unfortunately, they came to the owner purporting to represent the end-user. No one knew who was legitimately representing who or what! This caused a huge amount of wasted time and effort on everyone’s part when deals that should have come together crashed and burned!

Eventually, the market for rolling stock picked up and the marketplace identified many of these “operators” for what they were and either tossed them or legitimized them by putting them back on corporate payrolls where somebody could exercise some ethical control over them.

jeff-riley-2009.jpgJeff Riley never had these issues. In the nearly 30 years that we have worked together, he has never misrepresented a situation. Even beyond that, he has never even allowed me to misconstrue a situation without setting me immediately straight. Because of this honesty and ethical behavior, my partners and I have come first to Jeff and GATX with many transactions, knowing that we could get a quick and honest reaction from Jeff as to GATX’s interest in the deal. As a result, my firm, Railroad Financial Corp., has closed more transactions with GATX as a counter-party than any other single entity.

Ability to deliver the institution: When you are representing a mix of people seeking to buy, sell, lease or finance equipment, some of them are well known to you and some are new relationships. Where our engagement is with a new customer, there is a premium on our ability to quickly understand what the client is willing to do and is not willing to do as we interact with the market for their benefit.
This, in turn, puts a premium on our finding the right counter-party. Our client is counting on us not to waste its time with dead-ends or unsuccessful market initiatives and overtures.

Using Jeff and GATX as an example, I can remember no situation in all of the years during which I interacted with Jeff Riley when he was not almost immediately spot-on with his appraisal of GATX’s likely interest in participating in a transaction. There were two reasons for this: First, Jeff had been with GATX long enough and was bright enough to have learned what his company was interested in doing. And make no mistake about this, sometimes this changes from month to month in our industry. The other side of this coin was GATX’s confidence in Jeff. He earned the respect of not only GATX’s management, but the company’s credit apparatus as well. Jeff could reliably deliver GATX to the closing table when he said he could. There is a huge premium in our industry for anyone who can do that!

Being a nice guy (or gal): Over the years, I have had to deal with a lot of people who are not nice guys or gals simply because they were stitched into a big deal or important funding needed by a client. However, I (and everyone else I know in this industry) would rather deal with someone with a reasonable temperament. Fortunately for me and my partners, most highly talented people with whom we deal in this industry are also really nice people. The blood-sucking, win-at-all-costs, bait-and-switch types are usually well known and we deal with them only when we absolutely have to. Want to know who they are? Follow the trail of busted deals and you will find them in the debris.

Jeff Riley? He is one of the nicest people on the planet and because of this, one of the most successful in his job as GATX’s Executive Director Structured Finance. He was always ready with a smile, a helping hand, or a joke when tension was about to wreck a deal. He was, in fact, quiet confidence incarnate. When you heard his voice on the line, you wanted to talk to him, no matter what the situation. Jeff, we are most definitely going to miss you!

(Thanks also to Jeff’s wife of 33 years, Jodi, for her support of a guy on whom we all came to count.)

William Vantuono

With Railway Age since 1992, Bill Vantuono has broadened and deepened the magazine's coverage of the technological revolution that is so swiftly changing the industry. He has also strengthened Railway Age's leadership position in industry affairs with the conferences he conducts on operating passenger trains on freight railroads and communications-based train control.