Bernard Schwartz, at 98; antiwar defense executive
NEW YORK — Bernard Schwartz, a New York investor and businessman who, despite being a staunch antiwar Democrat, took over the ailing Loral Corp. in the Bronx and turned it into a multibillion-dollar military contractor, died March 12 at his home in Manhattan. He was 98.
His wife, Denise, confirmed his death.
Mr. Schwartz was a former accountant who had risen to be president of a large insurance firm. With no experience in doing business with the Pentagon, he was an unlikely choice to take over Loral, which was on the brink of bankruptcy when its two founders retired in 1972.
“I was an odd duck,” he said, or as he put it later in a memoir, “not your typical member of the military-industrial complex.”
But Mr. Schwartz racked up 96 straight quarters in which profits surpassed those of the comparable period the year before, a record believed matched only by General Electric in American corporate history. Loral (later known as Loral Space & Communications) soared in value to $13 billion by the time Mr. Schwartz sold the bulk of it to Lockheed Martin in 1996.
A maker of electronic weapons, countermeasures, and communications systems, Loral was on the verge of going out of business and having its stock delisted when Mr. Schwartz acquired it in 1972, investing $2 million in the company. He shed unrelated businesses and acquired more than 16 companies in defense electronics.
“Though I may be liberal in my political beliefs, I’ve always had a basically positive attitude toward the defense industry,” he later wrote. “A strong military seems vital to me as a way of preserving peace.”
He remained chair and CEO of Loral for 34 years.
A dapper 6-footer with a fondness for chocolate, backgammon, and Mickey Mouse, Mr. Schwartz had a distinctive management style. He disdained organizational charts, focus groups, and committee meetings, and was unusually solicitous of employee well-being. Workers were given stock options, and when Loral was sold, he distributed more than $18 million from his own funds to some 40 people whose jobs were in jeopardy.
But in decision-making, he was unyielding.
“I don’t believe in consensus,” he said in a 2014 interview for this obituary, contending that consensus implied unnecessary compromise. He would listen to opposing views, make up his mind, and then smile and tell anyone who persisted to “just say yes.” It was a motto that was also the title of his 2014 memoir.
Bernard Leon Schwartz was born Dec. 13, 1925, in Brooklyn and grew up in the borough’s Bensonhurst section. His father was a self-employed maker of plastic signs.
He graduated with a bachelor’s degree in finance from City College of New York, where he met his future wife, Irene Zanderer. He then joined a small but prestigious Wall Street accounting firm with a stable of midsize New York clients, one of which was Admiral Plastics, run by his brother, Harold.
Mr. Schwartz devised novel financial projections to help tiny Admiral make a successful public stock offering, which led to an association with Saul P. Steinberg, a financial prodigy 13 years his junior who had launched Leasco Data Processing Equipment Corp., a computer leasing company.
Mr. Schwartz left his post as Admiral’s chief financial officer to join Leasco, where Steinberg, seeking to diversify, asked him to research insurance companies. He proposed acquiring Reliance Insurance, a Philadelphia company nearly 10 times Leasco’s size.
Leasco, enjoying a stratospheric stock price, took over Reliance in 1968 and assumed its name. Six months later, Steinberg decided his Reliance Group — of which Mr. Schwartz was now president — should own a bank.
Mr. Schwartz suggested New York’s venerable Chemical Bank — the sixth biggest in the nation and, in his view, “ripest for improvement.”
Word of the takeover plan leaked out (Robert Metz, a columnist for The New York Times, broke the story). Chemical’s management fiercely resisted a takeover, and the banking establishment closed ranks against the interlopers, driving down the Reliance stock price from as high as $140 to as low as $7 by removing shares from pensionplan portfolios and selling shares short.
“We were turned into villains, portrayed as un-American,” Mr. Schwartz recalled. Reliance gave up on its bid. But the company thrived, and Mr. Schwartz became so wealthy that he could have retired in his mid-40s. Instead, after four years with Reliance, he joined Loral.
Despite his success in the corporate world, Mr. Schwartz was outraged by what was happening politically — particularly the war in Vietnam and the deaths of student protesters at Kent State University in 1970 — and he seriously considered moving his family to France.
He decided to remain in the United States, however, and work on behalf of the Democratic Party, becoming a top campaign donor. He later counted Bill and Hillary Clinton among his well-placed friends.
Mr. Schwartz had a strong commitment to New York. When Loral sought to expand from its three-building manufacturing compound in the South Bronx, he insisted that his workers be separated by no more than a 45-minute drive. The new site was a former detention facility in Yonkers.
The company drew attention from federal investigators when, in 1996, one of its engineers on a Chinese contract to build a communications satellite distributed a review of a related rocket failure to a committee that included Chinese members.
Federal authorities charged the company with 64 counts of violating rules governing the transfer of sensitive technologies. In 2002, Loral, which insisted that the disclosure of the review had been a simple mistake, settled the matter without an admission of guilt, agreeing to a $14 million civil fine and committing $6 million to improving its compliance procedures.
Mr. Schwartz retired from Loral in 2006; that same year he founded BLS Investments, a private investment firm.
Mr. Schwartz and his wife, Irene, were married for 63 years; she died in 2014. He married Denise Jansen in 2018. In addition to his wife, he leaves two daughters from his first marriage, Karen and Francesca Schwartz, and four grandchildren.