Irwin Jacobs: The Eternal Opportunist

In good times and bad, the thrill of a deal never seems to get old for Jacobs either. His recent association with T. Boone Pickens might have conjured up images from their days terrorizing the boardrooms of underperforming publicly held companies 30 years ago, but the two erstwhile “gunslingers” have been talking about nothing more lethal than harnessed wind power and other alternative energy initiatives.

For the 80-year-old Pickens, the wind power plan has had the come-to-Jesus ring of the recently converted, albeit one who believes he’ll profit mightily from his new religion. For Jacobs, the joint venture seems to represent yet another opportunity in a career that’s included boat manufacturing, real estate, printing, trucking, storage, finance, pro football, discount stores, liquidation, recycling, beer, vanilla extract, and gunny sacks. And, as is usually the case, there’s a link between the new Jacobs business and an existing one: The cutting-edge, computer-driven VEC (Virtual Engineered Composites) Technology used to mold hulls for Genmar’s watercraft would be adapted to form the fiberglass blades for windmills.

Since announcing the venture last September, Pickens—in the face of the subsequent economic tsunami—has scaled back his investment significantly, but, in late March, Jacobs said the arrangement would go forward. Whatever else it means, the Pickens deal signaled Jacobs’ determination to stay in the game—indeed, to get involved in new games—despite his retirement-ready age. Of course, any conversation with the man lasting longer than a couple of minutes is likely to assure you that, though older as well as wiser, Jacobs is as tough and combative as ever.

He is contemptuous of Wall Street and bad actors such as Madoff and Petters. “I haven’t bought a stock in six years,” he says. “I was screwed by Wall Street and said, ‘Never again.’ Now I thank God every day that I’m not a part of it anymore. Believe me, I was once a very sizable trader in the market. In the 1980s—I’m not kidding—I paid as much as $10 million just in commissions a year. Every day I was trading millions of shares of this and that, and putting the money I made into our businesses. Now I consider Wall Street the most fraudulent institution in the world. It’s just outrageous what those people have done in the last several years.”

Jacobs says he had nothing to do with Madoff, but had a run-in with Petters, the Wayzata businessman currently in jail awaiting trial for allegedly running a Ponzi scheme that bilked investors out of $3.5 billion. “Petters bought our retail stores 10 or 12 years ago,” he says. “Jacobs Trading had a bunch of them—World’s Best Deals they were called—and I wanted to get out of the retail business. I called Petters because he had retail stores selling close-outs. He came to see me the next day. I told him, ‘Just take over the leases and buy the inventory at cost.’ He said, ‘Fine, but I don’t have all the money to do it with.’ I said, ‘I’ll carry you. Give me something down.’ He gave me a million or a half-million, I don’t remember, and I gave him 18 months to pay off the balance, three or four million.”

Petters was always late with the interest payments, Jacobs says, and after 18 months claimed he didn’t have the money to complete the deal. “He came to me one day and asked for more time,” Jacobs says. “I said, ‘No, I’ve carried you longer than your mother. We’re done. You pay or I take [the inventory] back and put you in bankruptcy.’ Then he said, ‘I’ll tell you what you do. Make out an invoice to me for twice what I owe you. I’ve got this lender who will give me 50 percent of whatever I buy.’ I said, ‘What are you talking about? You want me to create a fraudulent invoice?’ And he said, ‘Well, it’s not your problem, it’s my problem.’ I said, ‘Get your ass out of my office.’ ”

After that, recalls Jacobs, “I said to my son-in-law, ‘One of three things is going to happen: [Petters] is going to file for bankruptcy, be indicted, or commit suicide. There’s no way some funny games aren’t going on here.’ He went from not paying me to buying Fingerhut. It didn’t make sense.”

Oddly—then again, maybe not—Jacobs insists he’s optimistic despite today’s perilous business environment, the deaths and downturn, and his self-described feeling of vulnerability. “I’ve always been the type of person who, in good times and bad, asks, ‘How can we capitalize on the situation?’ ” he says. “Everything I’ve ever owned I bought in trouble, and everything I’ve sold I sold when it was good. I would call myself an opportunist and not be embarrassed.”

“Dad’s been humbled by the events of the past year,” Melinda Jacobs says, “but he’s fearless. He’s never believed in setting goals. It’s like, ‘You set a goal, you reach it, then what?’ He believes in being constantly challenged. He’s in good health and doesn’t see retirement as an option. I just wish he’d slow down and smell the roses. But I’m afraid he won’t.”

Irwin Jacobs, according to his kids, has never been one to take his work home. Business and family may be inseparable, but there’s always been a wall between the office and the house. “It’s not easy for him to relax,” says Mark. “His passion is his work. But he always goes home for dinner.” Alexandra, with whom Irwin will celebrate their 48th wedding anniversary in August, has her own career—she’s a successful sculptor and painter whose large, bright portraits and landscapes enliven the walls of her husband’s headquarters and have been purchased by the likes of Oprah Winfrey and Quincy Jones. Reports that Irwin sends Alexandra roses every week are not true, he says. “But we’ll go to Sam’s Club or Costco and buy fresh flowers. We have our own greenhouse, too. She does love flowers.”

The couple’s second child, Sheila, now in her early 40s, has cerebral palsy, lives with a full-time attendant in the small group home Jacobs built for her, and, at her parents’ insistence, spends every weekend with her family. “She’s our angel,” Jacobs says. “We pretty much dedicate our weekends to her.”

For a few years during the 1980s, Forbes ranked Jacobs among America’s 400 richest Americans. No longer on that list, he won’t divulge his current worth. But, as the old line goes, the money is only for keeping score. For Jacobs, it’s always been the game that counts.

Eager to get back to business at the big round table that’s his playground, Jacobs sums it up like this: “I have to tell you, there’s never been a day in my life, whatever I’ve done, that I wasn’t proud of what I did and I didn’t give 100 percent. I’ve always felt that if I didn’t do that I wouldn’t succeed, and I always wanted to succeed. Now people say, ‘Enough already!’ But I still don’t see it that way.”