"FLASHBACK: Romney’s Private Equity Firm Caused Several Corporate Bankruptcies, Thousands Of Layoffs"
Former Massachusetts Gov. Mitt Romney (R) launched a presidential campaign exploratory committee yesterday, complete with a video in which Romney claims that his days in the private sector taught him all about job creation:
Across the nation, over 20 million Americans still can’t find a job or have given up looking. How has this happened in the nation that leads the world in innovation and productivity? The answer is that President Obama’s policies have failed. He and virtually all the people around him have never worked in the real economy. They just don’t know how jobs are created in the private sector. That’s where I spent my entire career.
In 1985, I helped found a company. At first we had ten employees. Today, there are hundreds. My work led me to become deeply involved in helping other businesses, from innovative start-ups to large companies going through tough times. Sometimes I was successful and helped create jobs. Other times, I wasn’t. I learned how America competes with companies in other countries, why jobs leave, and how jobs are created here at home.
Romney is right to be talking about job creation considering the unemployment rate, but his record in the private sector is one of job destruction. As Politico detailed, Romney’s company, Bain Capital, was in the business of buying up distressed companies, slashing them to bits, and then selling them off, resulting in lots of job losses:
– 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.
22 percent of the money Bain Capital raised from 1987 to 1995 was invested in five businesses — Stage Stores, American Pad & Paper, GS Indusries, Dade, and Details. These five made Bain $578 million in profit, even as all five eventually went bankrupt.
As the New York Post’s Josh Koshman wrote, “there’s little question [Romney] made a fortune from businesses he helped destroy.” Travis Waldron noted today that Romney’s company also boosted its profits — and thus enriched Romney — by abusing offshore tax havens.