Lerer: “Firms like Bain Capital buy controlling stakes in troubled companies, then revamp them and sell them for a profit —a process that can include management changes and “cost-cutting,” often code for job cuts”
Can Romney? Inexplicably, the McCain campaign has not spoken of the layoffs that must have accompanied Romney’s efforts to “turn around” failing companies. Hedge funds are notorious for cutting jobs and the Clintons will make Mitt eat every single one. McCain has no such vulnerability and, hopefully, will make Romney’s layoffs an issue before Super Tuesday.So McCain can win and Romney won’t. That’s the long and the short of it […]
“On the stump in economically struggling Michigan and South Carolina recently, Mitt Romney has been making the case that ‘it always makes sense to fight for every single good job,'” writes Lisa Lerer for the Politico in an article titled Romney changes tune on layoffs
But this position seems to be at odds with the Republican contender’s one-time role as chief executive officer of Bain Capital, a large private equity firm.
In 1992, the firm acquired American Pad & Paper. By 1999, the year Romney left Bain, two American plants were closed, 385 jobs had been cut and the company was $392 million in debt.
The next year, Ampad was forced into bankruptcy.
Bain Capital and Goldman Sachs bought Dade International for about $450 million in 1994.
The firm quickly fired or relocated at least 900 workers. Over the next several years, it sunk increasingly into debt and laid off 1,000 workers.
In 2002 — after Romney had left Bain — it filed for Chapter 11 bankruptcy protection.
A 1997 buyout of LIVE Entertainment for $150 million resulted in 40 layoffs, roughly one in four of the company’s 166 workers.
The job cuts affected all aspects of the company, from production and acquisition to legal and public relations.
In 1997, Bain bought a stake in DDI Corp., a maker of electronic circuit boards.
Three years later, Bain took the company public and collected a $36 million payout.
But by August 2003, the company filed for bankruptcy protection, laying off more than 2,100 workers.
Four months after the bankruptcy, unhappy shareholders sued company executives, the initial public offering underwriters and Bain for mismanaging the IPO and failing to disclose company financial information. (Romney was not named in the suit.)
In March, all the defendants settled for $4.4 million.
Some job losses can be a natural part of the private equity business.
Firms like Bain Capital buy controlling stakes in troubled companies, then revamp them and sell them for a profit — a process that can include management changes and “cost-cutting,” often code for job cuts […]
- Gavin: “Throughout his 15-year career at Bain Capital, which bought, sold, and merged dozens of companies, Romney had other chances to fight to save jobs, but didn’t—His ultimate responsibility was to make money for Bain’s investors, former partners said.”
- Romney: MY feelings are more important than YOUR jobs