RLJ Companies Riding Out Economic Storm
1/5/2012, 11:06 a.m.
"(And) in the automobile industry, car sales have been the real bright spot in the manufacturing sector," Johnson said. "Before the crash, sales were between 14 and 15 million (cars sold a year); it's 12-13 million now. That's indicative of two things: people are willing to spend money on durable goods and the government did a good job reinvesting in the auto industry. Credit is available for auto purchases. (Soon), driving auto sales will begin to reverberate in the economy."
Johnson, who has a business relationship with private equity giant, the Carlyle Group, oversaw the creation of a special purpose acquisition corporation (SPAC) which is a blind pool. RLJ, which operates hedge and private equity funds, attracted investment funding and as a public trading company raised $143 million. One private equity fund Johnson spoke of "is buying up businesses" and recently pulled together $230 million and set up a mid-sized buyout fund with which to buy various businesses. One recent purchase is a book company that Johnson said he hopes will become a major player in the educational book sphere so he can boost educational development.
Johnson took his hotel company public earlier this year. RLJ owns 140 hotels in the U.S. - with more than 20,000 rooms - three of which are in the District. According to Commercial Real Estate Direct, RLJ, through the fund it has raised, completed $5.7 billion of acquisitions and sales over the past decade.
He has also partnered with Thomas F. "Mack" McLarty III and Stephen J. Landers, Sr., to form RLJ-McLarty-Landers Automobile Holdings, LLC. McLarty is a prominent Arkansas businessman and former Chief of Staff to President Bill Clinton. Johnson listed gross car sales at $1.1 billion.
Johnson said he remains strongly committed to job creation, increasing employment opportunities and making capital more readily available to people of color, particularly those who live in underserved communities. He is championing what he calls the RLJ Rule, similar to the Rooney Rule that was adopted by the National Football League in 2003.
Johnson's proposal encourages companies to voluntarily implement a plan to interview a minimum of two qualified minority candidates for every job opening at the vice president level and above; and companies would interview at least two qualified minority-owned firms for vendor supplier/services contracts before awarding a new company contract to a vendor.
Johnson said the private sector in the U.S. can solve the problems of job creation and increased minority access to capital by adopting the RLJ Rule which he describes as a "business solution to a social problem."
"The RLJ Rule is principally designed to encourage companies to voluntarily establish a 'best practices' policy to identify and interview the tremendous talent pool of minority individuals and businesses that are often overlooked because of traditional hiring or procurement practices," Johnson said recently in a press release announcing the Congressional Black Caucus's support for his proposal.
"The purpose of this voluntary RLJ Rule is not to suggest quotas or that companies hire any minority individual or firm that is not qualified. The RLJ Rule, if implemented properly, will further enhance a company's already established commitment to diversity and inclusion."
To that end, Johnson said he has also developed an Internet-based platform called Opps Place where major corporations looking for qualified applicants and minorities seeking jobs can link up.
"People always ask me, 'How do you find talented African-Americans? I hire them all the time; they don't live under rocks. Forty Fortune 500 companies who believe in inclusion and diversity have already signed up," Johnson said.