More Than Four Decades In Business
Law And Still Bullish On West Michigan
Charles E. McCallum is a Tennessee native who has only had one job since he graduated from Vanderbilt University law school in 1964: Warner Norcross & Judd.
The young lawyer who had earned a math degree from the Massachusetts Institute of Technology (and taught math at Vanderbilt while in law school there) specialized in business law and became a globetrotter, from one international business deal to another.
If he hasn’t seen it all, he’s probably seen most of it. And while he agrees that Michigan is struggling economically, he’s still bullish on West Michigan.
“I’m generally an optimist,” he said.
For example: The dollar is weaker now in the international currency exchange rates. Thus, “at this particular juncture, for many companies export sales have never been better because of the favorable exchange rate,” said McCallum.
Of course, that means that now, the initial cost of setting up distribution for American-made goods in Europe will be higher with the weaker dollar, but it can still be worth the investment, he said.
It also means the managers have to be more attuned to fluctuations in the exchange rate.
“Companies must learn how to manage exchange rate risks,” he said. “It’s easy to lose a lot of money overnight in a fast-moving (currency) exchange.”
Years ago, Warner Norcross sent McCallum to the Philippines to represent a client who was selling products there. The client had a contract dispute that hinged on a fluctuating exchange rate between the dollar and the Philippine peso, and McCallum had to negotiate an installment sale agreement “on the spot in Manila.”
If any business sector in any U.S. region understands international trade, it’s West Michigan, he said, which is “more of an internationally oriented region.”
He is not sure if it is the people here or the types of products made here, but he said this region seems to have gotten involved in international trade earlier than other Midwestern communities.
As a new lawyer in 1964, one of his first assignments was to go to Germany to help set up Hush Puppies AG for Wolverine World Wide. He also represented Big Dutchman as it expanded abroad. Big Dutchman, founded in Holland, Mich. in 1938, manufactures equipment for poultry and pig farms, and is active all over the world today, with international headquarters in Germany.
“I remember doing deals (for Big Dutchman) in Yugoslavia — all over,” said McCallum.
Even among automotive suppliers, McCallum said he believes some based in West Michigan were quicker to do business with Japanese companies starting up operations in the U.S. than American auto suppliers elsewhere in the country.
West Michigan was “among the early (U.S. markets) to move aggressively into the developing Orient,” he said.
The Japanese streamlined their manufacturing processes while rebuilding their industry after World War II, and manufacturers in West Michigan took notice, according to McCallum.
“People here early on adopted world-class manufacturing and became steadily more efficient,” said McCallum. The main industries here, including automotive and furniture, “have shown the ability to retool and pick up gains in productivity.”
McCallum was involved with Yamaha when it was setting up operations here years ago. Its first U.S. plant to manufacture musical instruments was established in Kentwood in 1973. He said he asked Yamaha executives at the time why they chose to locate here, and they gave two main reasons. One was proximity to a large resource of fresh water; the other was “the productivity of your labor,” said McCallum.
He said the integrity of West Michigan is also an enticement to investment here.
“By and large, most of the businesspeople (here) are honorable and honest, and want to do the right thing,” he said. “Integrity and a willingness to innovate have served this community very well.”
He is not oblivious to the new challenges facing American industry, however. The big issue, said McCallum, is the cost of health care insurance for employees and retirees. It may be more of an issue in West Michigan, because of the legacy of U.A.W. contracts here, he noted.
It was “the rapid ramp-up of health care costs over the last 20 years” that made health care benefits for employees a major issue, said McCallum, but added that in retrospect, American health care may have played a role in the success American industry has enjoyed over the years.
“I think that in the long run, one of the reasons we’ve had a more productive workforce is because we have better health care … I don’t think we lose as much work time” due to illness and injuries, he said.
McCallum has been active on many hospital and HMO boards, including service as past chairperson at Butterworth Hospital and Priority Health.
His list of volunteer activities is much longer than that, however, and includes board service at the Grand Rapids Art Museum, Michigan District Export Council, The Right Place Program, Grand Rapids Area Chamber of Commerce, Grand Rapids Transit Authority, Research and Technology Institute of West Michigan, and Volunteer Trustees of Not-for-Profit Hospitals.
He noted that he grew up in the South, was educated in Boston and has traveled throughout the world, “but I have found this community both committed to volunteerism and open to newcomers.”
In some parts of the country, he said, an individual’s last name and family prestige are crucial to those he or she is volunteering to work with, but that is not the case in West Michigan.
He said he counsels young people to volunteer for community service because it’s not only the right thing to do, but it’s also a “remarkable learning experience.” People who work in a volunteer organization, where there is minimal command-and-control hierarchy (as at a place of employment) have to learn teamwork with the group, he said.
Greater Grand Rapids in particular, he noted, is “like a laboratory for public-private partnerships.”
McCallum is a former managing partner at Warner Norcross and still employed there fulltime. He serves as chairman and CEO of Terralex, a network of 150 independent law firms with 14,000 attorneys in more than 100 countries and 40 states.
Last year he became chairman of the American Bar Association’s Section of Business Law and was the recipient of the second annual Stephen H. Schulman Outstanding Business Lawyer award from the Michigan State Bar Association Business Law Section. He has written about ethical issues in opinion practice and the legal aspects of doing business in the United States. LQX