URL: http://www.nytimes.com SUBJECT

1128 of 1258 DOCUMENTS

The New York Times
February 16, 2007 Friday

Late Edition - Final

Will Russia Bet on Its People or Its Oil Wells?
BYLINE: By THOMAS L. FRIEDMAN
SECTION: Section A; Column 1; Editorial Desk; Pg. 23
LENGTH: 795 words
In a high-rise building with a view of Lenin's Tomb, the U.S. aerospace giant Boeing is designing key parts of its new 787 Dreamliner, using hundreds of Russian aerospace engineers. Yes, President Putin may be talking cold-war tough, but down the street from the Kremlin, America's crown jewel industrial company is using Russia's crown jewel brainpower to design its next crown jewel jetliner.

Boeing's Moscow Design Center, which employs 1,400 Russian engineers (earning less than their U.S. counterparts) on various projects, symbolizes Russia's unique potential: Russia is that rare country that not only has a treasure trove of natural resources -- oil, gas and mines -- but also has a treasure trove of human talent: engineers, mathematicians and other valuable minds.

Most nations with highly developed human talent -- like Singapore or Taiwan -- have few natural resources, and those that are rich in natural resources -- Venezuela or Sudan -- tend not to develop their people's talents. The exceptions, like Norway, which is rich in both human and natural resources, usually built their democratic institutions before they got rich on oil, so the money was well spent.

The meta-question with Russia today is this: Will it become more like Norway, a democracy enriched by oil, or more like Venezuela, a democracy subverted by oil? Is the Boeing center Russia's future or its exception?

You see signs of both trends. On the positive side, Russia has been smarter than most petro-states. It has set up a rainy day fund and tucked away $100 billion from its oil and gas windfall. Direct foreign investment in Russia hit $30 billion last year, according to The Economist, and not all of it goes to the oil and gas sector anymore.

And then there's Boeing. Its impressive Moscow center operates two shifts of engineers: 7 a.m. until 3 p.m., and 3 p.m. until 11 p.m. -- which is during the workday in the United States. A Russian Boeing engineer might be designing part of the 787's nose during his day, and then initials and stores his work in the computer. A U.S. Boeing engineer, working on an identical computer, then picks it up during her day and engineers it some more. With regular teleconferences, it's as if they are in one virtual 24-hour office.

''There is no paper at all,'' said Sergei Korolev, the deputy head of Boeing Moscow. ''We do the presentations electronically and have online sessions with Wichita and Seattle, and everyone looks at the same part and talks about it. Our center is the reason people are not emigrating.''

But Russia has a unique legacy in aerospace from Soviet days, so the educational centers and talent were in place for Boeing to tap. What Russia still glaringly lacks is an ecosystem of secure property rights, venture capitalists and homegrown innovators, and universities and business schools churning out idea-entrepreneurs. ''Made in Russia'' will never be a global brand as long as research spending by Russian companies remains among the lowest in the world.

The Moscow Times recently reported that only two Russian colleges -- Moscow State and St. Petersburg State -- are listed among the world's top 500 universities. When you walk down the streets in Bangalore, India's high-tech capital, it feels as if there's a computer school or English-language school on every street. You walk in Moscow, and it feels as if there is a new shoe store or beauty salon on every street.

A former top aide to President Putin remarked to me that Russia had a huge interest in building a postindustrial knowledge economy, not an energy-intensive industrial one, so it can export most of its oil and gas, not consume them at home. But that would take a big investment in education, which is not being done.

Noting that Russia today spends far less of its G.D.P. on higher education than Europe or America, Sergei Guriyev, rector of Russia's New Economic School, wrote in The Moscow Times, ''Russians simply are not prepared to pay the taxes that would be necessary to finance science and education at Soviet-era levels, and no incentives have been created to attract more private funding.''

So here's my prediction: You tell me the price of oil, and I'll tell you what kind of Russia you'll have. If the price stays at $60 a barrel, it's going to be more like Venezuela, because its leaders will have plenty of money to indulge their worst instincts, with too few checks and balances. If the price falls to $30, it will be more like Norway. If the price falls to $15 a barrel, it could become more like America -- with just enough money to provide a social safety net for its older generation, but with too little money to avoid developing the leaders and institutions to nurture the brainpower of its younger generation.

URL: http://www.nytimes.com
SUBJECT: AEROSPACE MANUFACTURING (90%); ENGINEERING (90%); AIRCRAFT MFG (90%); EDITORIALS & OPINIONS (90%); OIL & GAS INDUSTRY (89%); AEROSPACE INDUSTRY (78%); TRENDS (78%); PETROLEUM PRODUCTS (74%); HUMAN RIGHTS (59%); FOREIGN INVESTMENT (50%); COLD WAR (78%) Prices (Fares, Fees and Rates); Oil (Petroleum) and Gasoline; Freedom and Human Rights
COMPANY: BOEING CO (96%)
ORGANIZATION: Boeing Co
TICKER: BOE (LSE) (96%); BAB (BRU) (96%); BA (NYSE) (96%); 7661 (TSE) (94%)
INDUSTRY: NAICS336414 GUIDED MISSILE & SPACE VEHICLE MANUFACTURING (96%); NAICS336412 AIRCRAFT ENGINE & ENGINE PARTS MANUFACTURING (96%); NAICS336411 AIRCRAFT MANUFACTURING (96%); SIC3761 GUIDED MISSILES & SPACE VEHICLES (96%); NAICS 213112 OIL & GAS INDUSTRY (89%)
PERSON: VLADIMIR PUTIN (58%); THOMAS L FRIEDMAN (59%) Thomas L Friedman
GEOGRAPHIC: MOSCOW, RUSSIA (90%) RUSSIA (94%); UNITED STATES (94%); SOUTH AMERICA (92%) Russia; Moscow (Russia); Russia
LOAD-DATE: February 16, 2007
LANGUAGE: ENGLISH
DOCUMENT-TYPE: Op-Ed
PUBLICATION-TYPE: Newspaper

Copyright 2007 The New York Times Company

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The New York Times
February 15, 2007 Thursday

Late Edition - Final

When Budgets Loom, It's Time to Rent a C.F.O.
BYLINE: By KRISTINA SHEVORY; James Flanigan, whose Entrepreneurial Edge column normally appears on the third Thursday of each month, is on vacation.
SECTION: Section C; Column 1; Business/Financial Desk; SMALL BUSINESS; Pg. 5
LENGTH: 991 words
The chief financial officer just left, paperwork is stacking up and the budget needs to be written. A small-business owner could try doing the work, but would not have enough time to run the company, look for a replacement and oversee the finances. So what to do?

Hire a temp.

That's what Patricia Bland Nicklin, managing director of Share Our Strength, a nonprofit group in Washington, did when her financial chief resigned. She hired John Gillespie, an interim finance officer and founder of Beyond the Bottom Line, to lead the search process and screen applicants.

But when she did not find anyone after two months, she asked Mr. Gillespie to come in three days a week to oversee the group's finance, administrative and information technology departments. During the next 18 months, he negotiated a new line of credit, centralized finances and switched banks to shave expenses.

''One of the advantages of someone coming in from the outside is that he has fresh eyes,'' Ms. Nicklin said.

Nonprofits and private and public businesses of all sizes are turning to temporary finance chiefs as they struggle to meet new regulatory guidelines, keep expenses low by not hiring new employees, take their time while they look for a permanent finance chief or negotiate a merger or sale if they do not have the time or expertise to do so. Sometimes, temps are brought in even to help save a business and prevent layoffs.

''Companies don't like to be in a hire-and-fire situation; it's tough for an organization to go through layoffs,'' said Barry Asin, executive vice president and chief analyst at Staffing Industry Analysts in Los Altos, Calif.

Technology start-ups and venture capitalists that support them have been using temporary finance chiefs for the last 15 years to help recruit board members, fine-tune business plans and bring in outside money. Such temps went mainstream five years ago when Congress passed the Sarbanes-Oxley Act, which requires publicly traded companies to follow stricter financial controls.

All of a sudden, companies that lacked the staff or expertise to deal with the law needed help fast. Demand for temporary financial and accounting experience soared 68 percent over the next four years to $8.9 billion in 2006, according to Staffing Industry Analysts. This year, demand is projected to climb 10 percent.

Unlike hiring for other management positions, bringing in interim financial executives can be done smoothly because many tasks, like overseeing a merger or complying with Sarbanes-Oxley, are short-lived. They can also tap them temporarily to give permanent finance chiefs a break, so they can focus more on strategy and less on regulatory issues, said Susan Rucker, vice chairman for the financial leadership practice at Tatum, a national executive services and consulting firm based in Atlanta.

When a company hires an interim officer, it is typically finding someone with up to 15 years of experience who brings specialized knowledge from working with Fortune 500 companies, start-ups or ''hair-on-fire projects,'' Ms. Rucker said. Although many temporary officers are self-employed, some have large practices and can bring in controllers and bookkeepers if the work is basic.

Still, they differ drastically from consultants, who ''give advice and not much else,'' said Richard M. Brenner, president and chief executive of his own executive services firm in Cupertino, Calif.

''An interim executive is part of the team and looks, feels and smells like them,'' Mr. Brenner said.

If brought in for a short-term project, an interim chief financial officer can sometimes be cheaper than a full-time staff member, particularly if needed for three days or fewer. A business typically pays for expenses, like supplies and travel, and usually negotiates a directors and officers insurance policy, if needed, with an interim officer. Hourly fees typically range from $125 to $300.

Temporary finance chiefs have become accepted careers for financial executives who want to start their own businesses, have more free time or work with clients of their own choosing. When Mr. Gillespie founded Beyond the Bottom Line nine years ago, he was the chief financial officer for a $40 million company and yearned for a change.

''I worked for some mercurial bosses, and I felt like I wasn't in control of my own work,'' said Mr. Gillespie, who has since worked with 132 companies and nonprofits.

For Bryan Chance, the lure of a fast-paced life persuaded him to resign from Sigma Global, a medical devices and pharmaceutical company he helped found and later took public.

He joined Tatum as a partner in 2005 and served as the interim chief financial officer at Titan Global Holdings, a telecommunications company, until he became its full-time chief executive in August. (Unlike the situation at most interim firms, one-third of Tatum's executives become full-time employees of their clients while still maintaining their ties to Tatum.)

At Titan, Mr. Chance got his wish for a challenging new job. Titan, based in Richardson, Tex., hired Tatum to help it stop losing money and to set up stronger financial controls after its finance chief resigned. The Securities and Exchange Commission had issued several warnings over its use of derivative debt instruments.

Besides Mr. Chance, two controllers and an S.E.C. expert, all Tatum employees, have joined Titan over the last year. The company has won a $3.7 million refund of federal excise taxes, and annual revenue increased by 382 percent, to $109.8 million for the fiscal year ended last Aug. 31.

Despite his success, Mr. Chance says there is still much work to do and he does not expect to leave his position anytime soon. He wants to expand revenue and make the company profitable. Still, he says, he is happy with his choice to leave his old company.

''It's really been rewarding to jump in and roll up my sleeves and get things done,'' Mr. Chance said.

URL: http://www.nytimes.com
SUBJECT: SARBANES OXLEY ACT (89%); BANKING & FINANCE REGULATION (89%); EMPLOYMENT SERVICES (89%); TEMPORARY EMPLOYMENT (89%); MERGERS & ACQUISITIONS (89%); BANKING & FINANCE (78%); SMALL BUSINESS (90%); LAYOFFS (90%); RECRUITMENT & HIRING (77%); NONPROFIT ORGANIZATIONS (90%); ACCOUNTING (71%); COMPUTING & INFORMATION TECHNOLOGY (69%); VENTURE CAPITAL (68%); INDUSTRY ANALYSTS (68%); CONSULTING SERVICES (65%); US SARBANES OXLEY ACT (89%); DIVESTITURES (78%); ETHICS (71%); BUSINESS PLANS (78%) Executives and Management; Finances; Nonprofit Organizations; Mergers, Acquisitions and Divestitures; Labor; Layoffs and Job Reductions; Ethics; Small Business
PERSON: Kristina Shevory
GEOGRAPHIC: SAN FRANCISCO BAY AREA, CA, USA (53%) CALIFORNIA, USA (53%) UNITED STATES (91%)
LOAD-DATE: February 15, 2007
LANGUAGE: ENGLISH
GRAPHIC: Photo: When Patricia Bland Nicklin, the managing director of the nonprofit group Share Our Strength, needed help after the organization's financial chief resigned, she hired John Gillespie as an interim replacement. (Photo by Jamie Rose for The New York Times)
PUBLICATION-TYPE: Newspaper

Copyright 2007 The New York Times Company

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The New York Times
February 14, 2007 Wednesday

Late Edition - Final

By Wine Besotted: A Fantasy Fulfilled
BYLINE: By Eric Asimov
SECTION: Section F; Column 1; Dining, Dining Out/Cultural Desk; THE POUR; Pg. 1
LENGTH: 1162 words
DATELINE: LAKEVILLE, Conn.
ALL wine collectors, no matter how small their hoards, have cellar fantasies. Whether they keep wines in hall closets, in special coolers, at their parents' houses or spilling out of basement corners, they harbor the dream of a cellar of their own. For the true believer, a collection is no mere cache of bottles but, even more than the eyes, a window into the soul. In the imagination a cellar is a sanctuary where the tactile act of communing with one's bottles can border on the religious.

For most people, of course, the wine cellar remains a fantasy. A select few maybe have achieved some portion of their dream, carving out a room to serve as their vinous retreat. But perhaps nobody has realized the vision in details so glorious as Park B. Smith, a textile entrepreneur who is also one of the world's great wine collectors.

In the limestone and shale beneath the weekend house that he and his wife, Linda, share in this little New England town in northwestern Connecticut, Mr. Smith has constructed a cellar of thousands of fantasies, covering almost 8,000 square feet and holding more than 65,000 bottles. As if that weren't enough, more than half of Mr. Smith's collection is in magnums, twice the size of normal bottles, and the count doesn't include the 14,000 bottles auctioned off by Sotheby's last November, which raised almost $5.33 million for his alma mater, the College of the Holy Cross in Worcester, Mass.

A cellar that size is no simple room. Mr. Smith's is actually seven cellars built over 25 years or so and joined together, each more elaborate than the last. What began in 1978 as a small, claustrophobic root cellar has evolved into rooms with double-height ceilings and columns, filled with Asian art accumulated during his business travels. To fulfill the kid-in-a-candy store fantasy, Mr. Smith added to his domain a full kitchen and bath, and a comfortable dining room with a sound system, all enclosed in smoky glass to protect his guests from the 53-degree chill of the cellar.

''If I've had a crummy week, I just come down here for a few hours and talk to my bottles,'' Mr. Smith said, giving voice to the desires of frustrated wine lovers everywhere. ''Linda said, 'That's all right, as long as they don't start talking back to you.' ''

Mr. Smith, 75, is so passionate about wine that he practically pulses with ardor. Still lean with a head of straight white hair and surprisingly white teeth for a man devoted to red wine, Mr. Smith bears a passing resemblance to the actor Jason Robards, especially in his assertive, slightly raspy voice and no-nonsense diction. He's a Jersey guy, born in Madison, a beer drinker who discovered wine while in the Marine Corps stationed at Camp Lejeune, N.C.

''I went to buy a six-pack and the store had a promotion, Beaujolais for 99 cents a bottle,'' he remembered. ''So I bought one and tried it, and said, 'This isn't bad.' ''

Soon he was a civilian again, in the textile business, flying regularly to Asia and enjoying wine. By the early 1970s he was stopping on his way back in California, visiting wineries and befriending talented winemakers like Warren Winiarski of Stag's Leap Wine Cellars and Dexter Ahlgren of Ahlgren Vineyard. The relationships he made seemed almost as important as the wines.

''Something happens to people who love wine,'' he said. ''You really discover a camaraderie. It's not like coin collecting or something cynical. It's like sharing love in a glass.''

The wines that Mr. Smith essentially gave away in the Sotheby's auction represent themselves a mind-boggling world-class collection: cases of La Tache 1990 and 1985, Richebourg 1990 and Montrachet 1985 from Domaine de la Romanee-Conti; cases upon cases of first-growth Bordeaux, including one extraordinary lot of 50 cases of 1982 Mouton-Rothschild, which sold for $1,051,600; vertical collections of Harlan Estate and Araujo; and hundreds of bottles of Mr. Smith's beloved Chateauneuf-du-Pape, especially those from superstar producers like Chateau Rayas, Henri Bonneau, Domaine du Pegau and Chateau de Beaucastel.

But don't cry for Mr. Smith. It's true that six cases of Chateau Margaux 1982 went in the auction, but he still has 12 cases left.

Is it possible that Mr. Smith is a little excessive in his devotion?

''When I like something, I get a little carried away,'' he concedes.

No more so than after he discovered Chateauneuf-du-Pape, a wine that transfixes him to this day.

''I don't know any other wine that is so drinkable early on and ages so well,'' he said. ''The first I had was a 1978. It was a magnificent year, and those wines are beautiful now.''

Early on, he realized the importance of getting to know the winemakers, and he has established close relationships with even the most reclusive of them, like Mr. Bonneau. As a result, Mr. Smith is able to buy in quantity wines that border on cult objects, like the 2000 vintage of Pegau's Cuvee Capo, a wine that the critic Robert M. Parker Jr., who Mr. Smith calls ''my closest friend in life,'' awarded 100 points. Mr. Smith has 135 magnums of the Capo, the equivalent of 22 cases, in addition to myriad regular bottles.

It's a good thing Mr. Smith is a generous soul with an enthusiasm for opening bottles. A visit to his cellar rarely ends without him opening at least a handful of rare treasures -- the count reached 14 over the course of a long lunch for five people late in January.

''Wine to me is an emotional thing -- I've tried drinking alone but haven't done too well,'' he said. ''A bottle of wine and a conversation with someone you like -- wow!'' He waved his hand over the glossy black dining table, littered with dozens of crystal glasses and the 14 bottles, including one Champagne; two 2003 Chave Hermitages, white and red; and 11 Chateauneufs including Cuvee Capo '03, '00 and '98; Bonneau Reserve des Celestins '90 and '89; Rayas '90, '89 and '78; and Beaucastel '66. ''This is what I'm all about,'' he said.

Like even the smallest wine collector, Mr. Smith has had a problem outgrowing his storage space. By the time his fourth cellar was done, his first wife, Carol, who died in 2002, asked him a question.

''She said, 'If you never buy another bottle of wine in your life, and you drink a bottle each night with dinner, how long would it take you to drink up all you have?' '' he recalled. ''I said, 'I don't know, 25 or 30 years?' She said, 'Nope, 119 years!' I said, 'I got a problem.' We decided to open a restaurant.''

That restaurant, Veritas, opened in 1998 with an extravagant wine list largely based on the collections of Mr. Smith and another partner, Steve Verlin, whose holdings of Burgundy and Champagne dovetailed with Mr. Smith's Chateauneufs, Bordeaux and California wines. But opening his collection to the Veritas clientele has by no means alleviated his storage challenge.

''We've added three more cellars since Veritas, so it wasn't quite the panacea we expected,'' Mr. Smith said.

URL: http://www.nytimes.com
SUBJECT: WINE (78%); RELIGION (77%) Alcoholic Beverages; Wines; Biographical Information
PERSON: Eric Asimov; Park B Smith
GEOGRAPHIC: MASSACHUSETTS, USA (79%); NORTHEAST USA (78%); CONNECTICUT, USA (78%) UNITED STATES (79%)
LOAD-DATE: February 14, 2007
LANGUAGE: ENGLISH
GRAPHIC: Photos: TREASURE UNDERGROUND -- Park B. Smith's 8,000-square-foot wine cellar holds more than 65,000 bottles. (Photo by Thomas McDonald for The New York Times)(pg. F1)

RETREAT -- Park B. Smith has a collection of Asian art and Chateauneuf-du-Pape in his wine cellar. (Photo by Thomas McDonald for The New York Times)(pg. F6)

PUBLICATION-TYPE: Newspaper

Copyright 2007 The New York Times Company

1131 of 1258 DOCUMENTS

The New York Times
February 14, 2007 Wednesday

Late Edition - Final

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