Peter Perez is in tune with manufacturers

February 13, 2011
| By Pete Daly |
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Peter M. Perez, who began his manufacturing career in musical instruments before taking over Carter Products Co. in Grand Rapids, hasn’t been on the job there lately: He quit and left town for a more interesting job.

But he’ll be back.

Last spring, President Barack Obama named Perez deputy assistant secretary for manufacturing in the International Trade Administration, part of the U.S. Department of Commerce. But Perez is not a politician.

“I’m not a Republican; I’m not a Democrat. I’m a manufacturer,” he said.

In his new position, Perez directs Department of Commerce efforts to enhance the global competitiveness of U.S. manufacturing and promote job growth in the U.S. manufacturing sector. That includes development of trade policies, initiatives and programs to enhance U.S. exports.

When asked how he got the job, Perez pointed to Fred P. Keller as “the culprit.”

For years, however, Perez has actually been well known in manufacturing circles at the national level. Since 1990, when he and his wife acquired Carter Products, which designs and makes band saw accessories, he has served as president of the Wood Machinery Manufacturers of America and on the board of the National Association of Manufacturers.

As a director of NAM, Perez has been in Washington often as an advocate for manufacturing on Capitol Hill, where he acquired a solid understanding of how things get done there.

“It wasn’t completely foreign to me,” he said.

In the early fall of 2008, Perez and some of his fellow National Association of Manufacturers directors were meeting with President George W. Bush, “the week the world crashed.” On that day, he said, the U.S. House voted down the first TARP Act to help stabilize the failing financial system.

“There was a small group of us that sat with the president,” Perez recalled. “I was directly on his right hand, so for one month I called myself the president’s right-hand man.”

“We were asked if we could assist him in changing votes in the House, which we were successful in doing. By Friday, the House passed the first TARP,” said Perez.

Peter M. Perez
Organization:
U.S. Department of Commerce; International Trade Administration
Position: Deputy Assistant Secretary for Manufacturing
Age: 70
Birthplace: Elkhart, Ind.
Residence: Ada
Family: Wife, Carroll; sons Carter, 45, and Lee, 43; four grandchildren.
Community/Business Organizations: Secretary, Grand Rapids Symphony board; The Right Place Inc. board; trustee, Michigan Colleges Foundation, GVSU Foundation board.
Biggest Career Break: Being admitted to Phillips Academy and later serving as a U.S. Navy officer.

About a month later, Bush visited Grand Rapids and met in a restaurant with a number of business executives and leaders from the region. That time, Perez joked, “I sat on his left-hand side, so I was downgraded.”

When the Obama administration took over, Nicole Y. Lamb-Hale of Detroit was named assistant secretary of commerce for manufacturing and services. An attorney with expertise in business restructuring in the manufacturing sector, Lamb-Hale knew Fred Keller, CEO of Cascade Engineering, from his role as chair of the International Trade Administration’s Manufacturing Council from 2007 through 2009. She asked Keller if he knew of any good candidates to head the offices that reported to her.

Keller urged Perez to submit a résumé, and last spring he was offered a job in Washington, resigning his position at Carter Products and at various professional organizations to avoid a conflict of interest.

The new job “wasn’t anything I was seeking,” he said, but “I viewed it as important, in view of the recession and the effect on manufacturing.”

“I was passionate about manufacturing. I had spent 43 years in manufacturing,” he added.

Describing his current point in life as being his “fourth quarter” — he is 70, Perez noted that he saw the opportunity to engage in “an activity completely different from the last 43 years.”

“I hoped I could bring the benefit of my experience to the position and represent small, medium manufacturers — all manufacturers — in the work that I would do here in D.C.”

Perez was born and raised in Elkhart, Ind., where at age 5 he met another 5-year-old named Carroll, who now happens to be his wife of 48 years.

After a year of high school in Elkhart, Perez was accepted at Phillips Academy in Andover, Mass. Graduating with honors, he went on to Yale, where he graduated with a degree in English literature in 1962.

There was a military draft then, and Perez expected to be called up to the Army. He decided to enlist first in the U.S. Navy, where he was accepted in officer candidate school. He served as an engineering and deck officer in the Pacific Fleet and later on a Navy vessel based on the Great Lakes, training naval reservists.

After the Navy, Perez obtained an MBA degree with honors at Indiana University.

His manufacturing career began at C.G. Conn, a manufacturer of brass musical instruments. After 10 years, he joined the CBS entertainment company’s musical instruments manufacturing division. In 1977, CBS acquired Steinway & Sons, the world-famous piano manufacturer, which had facilities in Long Island, N.Y.; Hamburg, Germany; and London. Perez was chosen to head Steinway.

“I was the second non-family person to head Steinway in four generations,” he said.

Perez said that within a few years, “I thought I knew everything — had all the wisdom of the world — and it was time for me to own my own company.” So in 1982, he left Steinway and borrowed enough money to acquire Aeolian Pianos of Memphis, Tenn.

“They were the General Motors of the piano industry at that time,” he said, with sales of about $20 million. But the company was losing money and had been for years.

“I was sure I could certainly turn that around and make it a whiz-bang success,” he said.

Interest rates were extremely high at the time, which had depressed many industries, including pianos. Perez figured his company would be in position for a comeback once interest rates started going back to normal, because the piano manufacturing industry had increased by 1 or 2 percent each year for most of the previous 100 years.

“What I didn’t see so clearly then, which I can see now, is that the piano was no longer the social aspiration of upwardly mobile families whose mom and dad wanted their sons and daughters to play a musical instrument. And I didn’t see so clearly the introduction of the personal computer and electronic musical instruments,” said Perez.

“I’m not looking for any condolences,” he continued. “It is a reality that I have had success and I have had a failure, and I can tell you, 100 percent, that success is better.”

“No matter how financially painful it might be, you learn from both successes as well as failures,” he added.

“I picked myself up from that unfortunate situation,” he said, and with good connections and “after 125 interviews,” Perez began again, in two new opportunities. One was as the executive responsible for construction of the $70 million Brandon Wylde retirement community near Augusta, Ga. The other was being retained to help commercialize an innovative new eye-care product, which eventually was successful.

A few years later, Perez and his wife moved to Grand Rapids to take over management of Carter Products, a family-owned and operated business.

Fast forward to Jan. 27, the first anniversary of Obama’s announcement that America must strive to double its exports within five years, putting 2 million Americans back to work. Perez notes that American exports represent about 12.5 percent of the GDP, while exports in Canada are 29 percent, 27 percent in China and 41 percent in Germany.

“We’ve had the luxury of this wonderful market (in North America) for many, many decades,” said Perez, “but today the world is different.”

While America still has the largest GDP, “the areas of growth and opportunity are outside of our country,” in China, India, South America, the EU and Korea, he said.

Only 1 percent of U.S. companies — about 288,000 — export, and of those, 58 percent export to only one other market, which is typically Canada or Mexico, according to Perez.

Last year, the International Trade Administration helped American companies compete for international orders and helped deliver $18 billion worth of exports, estimated to have represented more than 100,000 new jobs. The ITA also has been involved in 35 trade missions to 31 countries, with almost 400 U.S. companies participating in those visits overseas.

More than 5,000 U.S. companies have received help to increase sales in the international markets.

The Commerce Department has been working to bolster exports for 30 years, noted Perez. He cites, as an example, the work of the Commerce Department’s Export Assistance Center in Grand Rapids, headed by Tom Maguire for more than 20 years.

Much more recently, Commerce selected Pontiac for the first Commerce Connect office, which opened late last year and is described as “a one-stop shop approach” to give businesses access to government-wide assistance.

The Commerce Department can offer small manufacturers analysis and research to determine the viability of potential offshore markets “before you spend the money to go to market,” said Perez.

The federal Manufacturing Extension Partnership is yet another ongoing effort to help manufacturers and has several offices in Michigan.

West Michigan is “a hotbed of entrepreneurship and family-owned companies,” he said, with more than 20 percent of the activity in manufacturing.

Perez urges any company to contact him regarding “things they think we should be doing here in commerce to help them be more successful in their world trading activities.”

Perez will speak at the Michigan Manufacturing Association meeting in Grand Rapids in June.

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