Mitt Romney’s Experience at Job Creation? Some Other More ‘Truthful’ Examples.
You have probably seen the Romney ads where he claims that during his stint as Bain Capital’s CEO that he was helping to create jobs. But was Bain Capital actually creating jobs, or was it creating profits at the expense of them?
Take GST Steel for instance, where for only $8 million Bain bought a controlling interest in the company, sold $120 million worth of bonds (saddling the company with immense debt) and then paid themselves a $36 million dividend. They then bought another steel mill and after repeating their debt for dividend trick reorganized the two as “GS Industries” which now had a total indebtedness of $378 million.
During all of this they constantly cut both the workforce and safety standards of both plants while failing to invest even minimal money into the plants upkeep much less towards making any capital improvements. Finally in 2001 “GS Industries” now over $500 million in debt declared bankruptcy and closed the plants.
It then became apparent that Bain had also declined to adequately fund the workers pension plans, employees suddenly out of work were now faced with the additional loss of promised severance pay, health insurance, and life insurance. In 2002 the U.S. Pension Benefit Guaranty Corporation had to commit $44 million to make up the shortfall towards funding only the basic pension payments. The workers never did receive their promised insurance benefits…
So in this instance Romney and Bain not only cost over 750 workers their jobs and forced two previously fairly healthy businesses into bankruptcy. They also managed to line their pockets with millions of dollars while doing so and before forcing a government agency to step in and pay $44 million towards their bad pension debt.
If this is Mitt Romney’s idea of how to “create jobs and restart the economy” I don’t think I want anything to do with it.
More info and two other examples of Bain’s bad business practices here:
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EDIT: The long version of the Obama Campaign ad on GST Steel. Worth the watch, at least in my opinion.