Riordan Returns Bearing Promises
Moments before leaving Los Angeles International Airport on the most ambitious overseas trip of his administration, Mayor Richard Riordan promised to return with results: “We’ll come back with cash,” he told reporters as he boarded a plane for Tokyo.
Fourteen days and eight cities later, the mayor fulfilled that promise. In a hotel in downtown Taipei, Taiwan, he completed a three-year negotiation with one of the world’s largest shipping lines by signing a tentative agreement to extend that company’s Port of Los Angeles lease for another 32 years. That deal and a second signed Saturday could, if approved by the City Council, eventually mean more than $1 billion to the city treasury.
But the long, expensive and occasionally grueling 16-day mission to Japan, South Korea, China, Hong Kong and Taiwan was not all champagne and self-congratulation: City officials returned home without an agreement with Cosco, the huge Chinese shipping company whose commitment they had hoped to secure while in China.
But on many fronts, the mission did produce achievements--from shoring up airport and port business to clearing the way for Los Angeles companies’ Asian inroads to imparting the message that Los Angeles has put its recession and riots behind it and is open for trade and tourism.
Executives with small- and medium-sized businesses who accompanied Riordan say they discovered potential new markets and met with government and business leaders to discuss an array of possible deals. One firm already has met with investment bankers eager to finance new Asian operations. Another plans to submit a bid for Asian computer work Monday. Still others say they met key officials in China, Hong Kong, Tokyo and Taipei, in part because they were traveling under the umbrella of the Los Angeles mayor. A few even cut deals with each other.
The trip also seemed to have an effect on Riordan--one that could ripple through the city’s politics. The mayor has long been a supporter of expanding the city’s airport, but as he toured Asia and was drilled in the importance of the region’s trade, he became increasingly vocal about the airport and its place in the city’s future.
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A trip to Hong Kong’s gleaming new international airport drove that point home.
Wearing a blue hard hat, Riordan strolled through the soon-to-open Hong Hong passenger terminal, where 20,000 workers were busily putting the finishing touches on a $21-billion airport, railway, bridge, road and housing project that dwarfs any public works project in the United States.
“I think there are lessons we can learn from this,” he said.
Although the mayor once answered questions about the airport when asked and touted the need for expansion when pressed, in Hong Kong he framed LAX expansion as a benchmark project of his second term and a defining issue for not just the city but the nation.
The trip also helped LAX officials prepare for the immediate future. One airline complained about its cargo arrangements; airport Director Jack Driscoll promised to take care of the problem. Another group of executives commented on their plans to expand the number of flights from Taiwan to Los Angeles; that tidbit will help local officials plan for growth.
And throughout the region, Driscoll and Deputy Director Phil Depoian discovered broad support for airport expansion, even from airlines that are weathering the effects of the Asian economic crisis but that hope to emerge from it within a year or two.
If the tour ramped up Riordan’s enthusiasm for airport expansion, it was the mayor who helped propel the port’s successes--as well as its one conspicuous shortfall.
Riordan was not the key negotiator in either of the trip’s two signature deals, the agreements with Evergreen Marine Corp. and Yang Ming Transport Corp. But his willingness to travel to Taiwan to seal the deals helped push them to their conclusion. Evergreen’s president, George Hsu, said the mayor’s personal touch affirmed his belief that Los Angeles was a friend to Evergreen and therefore a place where the shipping company ought to stay.
“We stick by our friends,” he said. “Los Angeles is our friend. The mayor is our friend.”
Similarly, Yang Ming Chairman T.H. Chen said Riordan’s presence at Saturday’s signing was evidence of the port’s commitment to delivering on its promises of high-level service.
“It means that the city of L.A. is very much concerned about this kind of agreement,” he said. “We are very grateful that he is here.”
If approved, the Evergreen and Yang Ming contracts would create an estimated 5,000 jobs in and around the port, and a total of about 30,000 in the region.
Riordan, relaxed and confident at the signing ceremonies, sipped champagne with company executives and proclaimed the agreements major accomplishments.
“Thank you for your faith in WorldPort Los Angeles,” Riordan told the chairman of Yang Ming hours before the mayor left for home.
In China, Riordan tried a harder sell, pushing executives from the Cosco shipping line for an agreement in principle that the company would bring its business to Los Angeles rather than Long Beach, which also is trying to win the firm.
Cosco officials wined and dined the mayor and Los Angeles representatives, treating them to an elegant lunch in a club high above Beijing. But they avoided making any direct commitments, arguing that legal and political considerations prevented them from signing on the dotted line.
That frustrated the Los Angeles officials, and some grumbled that Riordan did not take full advantage of a meeting later that day with Chinese President Jiang Zemin. That session was a cordial one in which the mayor and president swapped pleasantries, but no business was discussed.
Although none of the city representatives openly criticized the mayor for avoiding Cosco in that session, a few grumbled out of Riordan’s earshot that he should have put the matter to the president so that Jiang in turn could have leaned on shipping company officials. Asked why he had not discussed the Cosco deal with Jiang, Riordan said later that he did not think it was appropriate to the tone of the meeting.
Riordan administration officials tried to put the best face on the Cosco talks, and in fact, the company still may end up in Los Angeles. Cosco executives seem to enjoy the rivalry between Long Beach and Los Angeles, and will probably use it to try to exact concessions from the cities before deciding where to sign a deal.
Nevertheless, the Cosco discussions marked the undisputed low point of the trip.
City officials fared better in their other major mission: connecting promising Los Angeles businesses to potentially lucrative Asian markets. Dozens of executives hooked up with Riordan at each of the various stops on his tour.
Some of those executives found it tough going. In Japan, that country’s relatively closed economy and unwillingness to confront the severity of the region’s economic crisis left some of the delegates frustrated. Similarly, South Korea’s economy is in such dire straits that many of the delegates skipped that country altogether.
In the trip’s second half, however, a surprisingly robust and open Chinese economy, the changing but encouraging situation in Hong Kong, and the vibrant pace of Taiwanese growth left business leaders optimistic.
Stuart Levy, chief executive of Mixx Entertainment, appeared on panels Wednesday and Thursday, describing his company’s work licensing Japanese animated characters for the American market. By Friday night, he had met with three venture capitalists considering investing in his firm’s planned expansion. A fourth asked Levy to meet with him Saturday.
Kevin Wall, chief executive of Los Angeles-based BoxTop/IXL, said his discussions with Asian executives progressed so far, so fast that he spent Friday morning preparing a bid to build a World Wide Web site for Star TV--which invited Wall’s firm to consider doing that job.
Wall was one of several executives who believed that the mayor’s presence on the trip gave it the stature of an official visit.
“When you come over as a businessperson, you tend to have a difficult time getting to the right level,” he said. “This is a home run.”
For the mayor, the trip was not only business but also diplomacy at a high level. That is an area in which Riordan has little obvious interest, preferring to position himself as a problem solver, not as a political leader. Still, he and his new wife, Nancy Daly Riordan, were greeted at the highest level of every government they visited: They met with the emperor and empress of Japan, the president of South Korea, the president of China and the president of Taiwan.
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Riordan, who seemed genuinely taken aback by the high-level reception he received, attributed it to Los Angeles’ growing international stature.
Embassy officials agreed, but suggested that Riordan’s business background made him a particularly appealing guest in countries whose economies are in such deep trouble.
Said one Western diplomat: “Mayors, even big-city mayors, just don’t get to visit the emperor.”
