Campus prepared alumnus for international business ventures
Jerry Wirth ’88 can testify to the power of partnering with another Illinois State alumnus. Because of his ties to the University’s College of Business (COB) and its International Business Institute, Wirth networked with another COB alumnus and launched an effort to help children in Latvia, where Wirth is an entrepreneur. His conversation with Michael Richard ’75 at a 2004 Homecoming event spawned an international medical care project (see sidebar).
Wirth’s Illinois State ties benefit not only Latvian children, but also COB international business students. He worked in a university program that teamed alumni and students. International Business Institute Director Iris Varner said Wirth was an important mentor in that program, and “ very willing to respond to students.”
Varner has made Wirth a case study in her textbook for Illinois State’s beginning international business students. What he teaches students, Varner said, comes from “a world view he could never have developed if he had not taken the plunge.”
Wirth’s journey began after graduating with a degree in finance and international business. Several years into a good job at Caterpillar, he became intrigued by the idea of living in Central or Eastern Europe, where history was being made. He wasn’t being challenged in his job by promotions as quickly as desired, even though he was paid well. “I’ve never been driven by the need to make money,” Wirth said.
After a lot of thought, conversations with mentors—including Illinois State University faculty members—and negotiations with the Peace Corps, Wirth quit his job. He ended up in 1992 on a jet to the Baltic State of Estonia, a country undergoing a move to a private economy after the disintegration of the Soviet Union, of which it had been a part. His assignment as part of the first Peace Corps group to enter the former Soviet Union was to help businesses there obtain financing.
Wirth’s future began taking shape on that flight when he met another Peace Corps business volunteer, David DeRousse, a St. Louis-area Certified Public Accountant who after the Peace Corps would become Wirth’s business partner in Riga, Latvia. Near the end of Wirth’s service stint he would meet another Peace Corps volunteer in Estonia, Denise Salas, who would become his wife. She loved the region so much that she wanted to stay.
The outcome bears out the wisdom of Wirth’s instincts: the opportunities just keep coming. He and DeRousse own and operate RBM (www.rbm.lv), a management company for their wholly owned commercial real estate group that includes a 250-room hotel development, three office buildings, an industrial/logistics park development, and 10 supermarkets. In addition Wirth holds the influential position of president of the 150-member American Chamber of Commerce in Riga.
The vision Wirth had while at his Caterpillar desk has taken him to a level of international business expertise and success he could not have imagined. The instincts were good, but it was how he put them into action that made it all work.
It was because Wirth did so many of the right things to succeed in international business from the time he landed in Estonia that Varner used him as a textbook example. She and her husband, Illinois State Finance and Law Professor Carson Varner, were mentors whom Wirth credits and values, and with whom he has stayed in close contact.
In her book Varner describes the Estonian language—related to Finnish, Hungarian, and inner Asian language groups—as difficult to learn. Though his Peace Corps job did not require it, Wirth painstakingly became fluent in Estonian and later in Latvian. The effort maximized his standing in Estonia and his effectiveness in the business community. In addition to his job of helping local businesses gain financing, he started a weekly radio program, set up the area’s first crisis center for women and children, and opened a repair business employing disabled people.
At the end of his Peace Corps duty Wirth decided to stay on. Denise was still in the Peace Corps, and Wirth found “it was an exciting place to be.” The American firm Pepsico hired him to develop a Latvian subsidiary, and he stayed with the company until 1996.
He and partners then started a joint venture with a public Dutch shipping company in Latvia, which DeRousse later joined. They acted as liner agent for the American container company Sealand in Latvia. Their business handled break bulk and container shipments of bananas and then chicken from Central America and the United States into Latvian ports. They expedited the distribution of the food, supplying a large part of the Russian, Kazahkstani, Uzbekistani, and Azerbaijani markets.
“While I never really had a purposeful plan,” Wirth said, “I’ve come to realize that I enjoy owning my own business.”
Now that he has achieved business success, people tell Wirth that he and DeRousse arrived in the Baltics at just the right time to invest. “The truth is,” Wirth said, “we were here a long time before the right time,” as the years between 1996 and 2002 were tough and unstable. Wirth found himself operating in a legal vacuum in which theft, corruption, and opportunism were standard fare. The guarantees of the Communist state had disappeared, but nothing had taken their place.
And yet, he said, “Our ethical standards would have been inappropriate to apply to that situation.” He credited Iris and Carson Varner’s classes and mentorship with preparing him to weather that storm.
Carson Varner observed Wirth in those tough years “making the rules up as he went along,” relying on personal relationships and trust to fend off corruption in business. Iris Varner added that Wirth understood himself, understood where the people in the Baltics were coming from, and made good decisions about what to adopt and reject in his new home.
Successfully negotiating that lawless period was a major part of Wirth’s education. “I think it would be arrogant to point fingers at this behavior if I understand the context in which it occurred, and I do understand it. But that doesn’t mean adopting it. That becomes the important decision.”
As he and DeRousse tried to expand their business, they did not get involved with any corrupt people or activities, and they suffered the consequences. Their business failed to grow. Eventually their “clean” position became attractive to others, and ultimately a force in growing their business. That was a happy outcome for them and an example, Wirth said, of the way in which Westerners can make a positive contribution to the business environment of a place like Latvia.
During that rough period Wirth and DeRousse went about their shipping business and invested some of their profits into historic buildings in Riga’s center. When international politics intervened, leading to Russia closing its border with Latvia, the shipping business became untenable, and suddenly all they had were two historic buildings.
Patience and optimism carried Wirth through, as he and his partner continued to add enterprises, including a furniture-making business and more real estate. In the late 1990s they could not afford to own cars, and in the lowest years they were earning less than $5,000 annually. They used up their savings, thinking they would have to return to the United States.
At the end of 2002 the turning point came when they closed a real estate sale leaseback purchase of five grocery stores from a major international grocery chain. The business grew from there as the environment in the Baltics stabilized and became even more favorable for enterprise in 2004, with membership in NATO and the European Union.
By late 2008, when the worldwide credit crisis struck, Wirth brought out his optimism once again. “The next two years will be very difficult, but so far our business is just fine,” he said, adding that their bank was safe.
He and Denise, now parents of three young daughters, decided years ago that they would stay in Latvia as long as it was both fun and profitable. So far it has been. Denise has her own successful career as an administrator for the Baltics branch of the Stockholm School of Economics, developing an e-learning platform for the university. Previously she was chairperson of the English Department there.
Wirth is eager to continue applying the international business knowledge he learned, starting with his classes at Illinois State and continuing with his years of experience in Latvia. The main lesson hinges on the idea of understanding context, which leads to making good decisions about how he and his business fit into a foreign cultural and business model.
It’s a perspective Wirth gained while at Illinois State and a gift he actively returns to his alma mater, as he gladly helps the University prepare the next generation of international business entrepreneurs.