PhillyDeals: Freddie Mac chief expects no basic change

Philadelphia money manager and corporate turnaround specialist

Charles "Ed" Haldeman

came out of retirement last summer to head money-losing, government-controlled home-loan finance giant

Freddie Mac.

Since then, the company has reported $12 billion in losses, bringing the three-year total to $75 billion, as Freddie works through a long list of bad loans.

When will it end? Treasury Secretary Timothy Geithner told Congress this week he's still seeking advice on proposals to reorganize Freddie and its larger twin, Fannie Mae.

Geithner lamented the way Fannie's and Freddie's "duty to maximize profit" for investors had conflicted with their "public mission" to make homes affordable.

But that doesn't mean the secretary is for ending their investor-owned, private-company status, Haldeman told me. As he reads Geithner, "You could continue to have a profit-seeking enterprise," with the government still guaranteeing mortgage-backed securities, in exchange for insurance fees, as it does with bank deposits.

What's it like running a government-controlled company? "It's a tough job," Haldeman said.

Government people are "smart" and "cooperative." But "there are a lot of constituencies."

Does he say "No" a lot? He laughed. "Yes."

What if the state had cheap money to lend to hungry small businesses - but nobody to make the loans?

Pennsylvania may be broke, more or less, but state Treasurer Rob McCord has reached into the pile of bonds his office invests and set aside $10 million so that small nonprofit lenders can lend the money to small businesses, at low interest rates, in increments of $100,000 or less.

"They were running out of fuel," McCord told me, speaking of what he estimates are 20 to 30 small nonprofit lenders around the state, known in the trade as Community Development Financial Institutions (CDFIs).

The state isn't giving this money away; it'll charge lenders 5 percent interest. Borrowers could end up paying less. The lenders are eligible for 10 percent discounts from the state Department of Community and Economic Development.

Trouble is, the state's not sure any lenders in the Philadelphia area will accept this money and make the loans here.

One of the state's most successful CDFIs, the Philadelphia-based Reinvestment Fund, "has moved away" from small-business loans as it targets larger projects like supermarkets and charter schools, noted Jim Williamson, McCord's policy director. "This would be small for them."

The nearest lender McCord's office says is participating in the program is the Community First Fund of Lancaster, which doesn't make loans in Philadelphia.

Still, McCord's office is soliciting would-be borrowers for the program from across the state at its Web site, www.patreasury.org. Deadline is April 16.

Alloy Surfaces Co. Inc.

, part of U.K.-owned, Chester Township- based

Chemring North America

, says it has won a $13.9 million contract to make M211 missile decoys for U.S. Army aircraft at its plants in Chester and Bethel Townships, which employ 550 workers.

"We moved up here in 1998, with 79 people, from Delaware," vice president Mike Shoemaker told me. Then-U.S. "Rep. [Curt] Weldon and Gov. [Tom] Ridge made a very attractive package for us, and we've grown ever since."

That follows last year's $74 million Air Force and $9 million Navy contracts for the Alloy plants to build a million "special-material decoys," 8-inch metal cans that shoot metal-foil shards that heat up on contact with air and draw infrared-heat-seeking missiles away from aircraft.

At that time, chief executive officer John LaFemina said the deals would keep the plants busy for the next two years. The new deal "will get us another year's worth of production," Shoemaker told me. "We're making tens of thousands of these."

Besides Alloy, Chemring owns a string of U.S. military and government contractors, including Kilgore Flares Co. L.L.C. in Tennessee; a 1,000-acre ammunition and fuse plant and battle-simulation site in Florida, and a ground-penetrating radar plant in Virginia for hunting explosives, among others.