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Romney’s So-Called Job Creation Record at Bain Continues to Evolve…

January 07, 2012 at 9:25 p.m. ET

 

Romney's So-Called Job Creation Record at Bain Continues to Evolve...

1994: ROMNEY CLAIMED HE “HELPED CREATE” OVER 10,000 JOBS

Romney Said He “Helped Create” Over 10,000 Jobs At Bain. “’That's why I'm always very careful to use the words 'help create,' ‘ Romney acknowledged. ‘Bain Capital, or Mitt Romney, 'helped create' over 10,000 jobs. I don't take credit for the jobs at Staples. I helped create the jobs at Staples.’" [Boston Globe, 8/8/94]

LATER, ROMNEY CLAIMED HE CREATED “TENS OF THOUSANDS OF JOBS NET-NET”

Romney Said That He Created “Tens Of Thousands Of Jobs, Net-Net.”  “Romney has focused on his Bain victories, including providing funding to help launch or grow Staples, Domino’s Pizza, and other household names. ‘When I was at Bain Capital, we invested in about 100 different companies. Not all of them worked,’’ he said earlier this month in a debate. ‘But I’m very proud of the fact that I learned about how you can be successful with an enterprise, why we lose jobs, how we gain jobs and overall, in those 100 businesses we invested in, tens of thousands of jobs, net-net, were created.’’ [Boston Globe, 8/21/11]

NOW, ROMNEY CLAIMS HE HELPED CREATE “OVER A HUNDRED THOUSAND JOBS”

Romney Said That At Bain He Helped Create “Actually, Over A Hundred Thousands Of Jobs.” “Romney also questioned whether Gingrich understands how the economy works when asked about the former speaker’s suggestion earlier today that Romney give money back to businesses he’s profited from that have then gone bankrupt. ‘Doesn’t he understand how the economy works? In the real economy, some businesses succeed and some fail,” said Romney. “That’s how that works and you try and encourage the more successful and fortunately for many people, tens of thousands of jobs, actually over a hundred thousands of jobs were created by the investments that we were able to help make. ‘” [ABC News, 12/12/11; Romney Press Availability At Madison Lumber Mill, 12/12/11]

ROMNEY CANNOT SUBSTANTIATE HIS JOB CREATION CLAIMS

REALITY: IN 1994, ROMNEY ACKNOWLEDGED HE COULDN’T BACK UP HIS BAIN JOB CREATION CLAIMS

1994: Romney Acknowledged That There Was No Way To Determine Whether Jobs Had Been Lost Or Gained Economy-Wide Because Of His Ventures. “In a telephone interview late yesterday, Romney dismissed the characterization of Staples and his other investments as streamlining, saying that what he has done is ‘build and grow businesses,’ not shrink them. He asserted that there is no way to calculate whether jobs have been lost or gained economy-wide as a result of his ventures, and noted his 10,000-job figure simply measures what happened to employment at companies in which Bain invested. In a separate interview, Thomas Stemberg, Staples chairman and chief executive, acknowledged that there probably has been some job loss in the paper products business because of superstore companies, but said that the nation is still better off for their advent. Bain contributed 15 percent of the startup money for the Framingham-based company and, until the campaign, Romney sat on its board of directors.” [Boston Globe, 10/6/94]

Boston Globe: “It's Impossible To Say Precisely If More Jobs Were Created Than Cut By Bain Since The Firm Does Not Track Employment In Its Investments.” [Boston Globe, 1/27/08]

REALITY: ROMNEY HAS FAILED TO PRODUCE ANY EVIDENCE TO SUPPORT HIS NUMBERS

Washington Post Fact Checker: Romney Campaign Has Not Provided Any Proof That Bain Created “Thousands Of Jobs” During Romney’s Tenure. “Neither Bain nor the Romney campaign has provided proof that the company created thousands of jobs during Romney’s tenure. His campaign simply mentioned a few start-ups such as Staples and Sports Authority that now employ tens of thousands of people on the whole. But that doesn’t account for possible job losses with other companies. For instance, we know from past news reports that Bain businesses, including Ampad, Dade International and LIVE Entertainment, laid off a combined 2,351 workers under Romney’s leadership. Romney’s record at Bain proves that he can produce enormous returns for investors, but that doesn’t necessarily prove he can create jobs.” [Fact Checker, Washington Post, 12/12/11]

Factcheck.org: Neither The Romney Campaign Nor Restore Our Future Super PAC, A Pro-Romney Group, Have Backed Up Claims That Romney Created “Thousands Of Jobs” While At Bain. From a fact check of Restore Our Future Super PAC’s first TV ad and Romney claims: “A pro-Romney TV spot running heavily in Iowa touts an unproven claim that the candidate ‘helped create thousands of jobs’ as CEO of an investment firm. When we asked the super PAC sponsoring the ad for proof of its claim, a spokeswoman said: ‘We aren’t supplying that information.’ And so far, neither is the Romney campaign. … Since Romney himself has claimed ‘in those 100 businesses we invested in, tens of thousands of jobs, net-net, were created,’ we also reached out to the Romney campaign for backup. But we did not get a response.” [Factcheck.org, 12/9/11]

REALITY: ROMNEY’S JOB CLAIMS ARE “UNPROVEN” “MISLEADING” AND DISHONEST

Factcheck.Org: “Mitt Romney Has Taken To Saying That He Created More Than 100,000 Net Jobs Through His Work In The Private Sector, And More Jobs As Governor Than President Obama Has Created Since Taking Office. But The First Claim Is Unproven, And The Second Is Misleading.” [FactCheck.org, 1/5/12]

New York Times’ Paul Krugman: “The Point Is That Mr. Romney’s Claims About Being A Job Creator Would Be Nonsense Even If He Were Being Honest About The Numbers, Which He Isn’t.” [Krugman, New York Times, 1/5/12]

BAIN CAPITAL MAXIMIZED PROFITS BY FIRING WORKERS AND CUTTING BENEFITS AND PENSIONS

Under Romney, Bain “Also Maximized Returns By Firing Workers, Seeking Government Subsidies, And Flipping Companies Quickly For Large Profits.” “But a closer examination of the prospectus paints a different picture of Bain's operation. Under Romney's leadership, Bain became one of the nation's top leveraged-buyout firms, helping lead a trend in which companies were acquired using debt often pledged against their own assets or earnings. Bain expanded many of the companies it acquired. But like other leveraged-buyout firms, Romney and his team also maximized returns by firing workers, seeking government subsidies, and flipping companies quickly for large profits. Sometimes Bain investors gained even when companies slid into bankruptcy.” [Los Angeles Times, 12/3/11]

Under Romney And Bain Capital, Dade And DuPont Workers Saw Pension Plans Cut And Were Not Paid For Overtime. “Cost-cutting became a mantra inside the company. After his employer, DuPont, was bought by Dade, William T. Mowrey, a field engineer, said his generous pension plan was replaced by a 401(k); his salary was cut by $1 an hour, costing him $2,000 a year in income. When he filed for overtime, he said, his new bosses refused to pay it. ‘They were just trying to milk as much out of us as they could,’ he said.” [New York Times, 11/13/11]

  • Under Romney And Bain Capital, Good Paying Jobs – Some Paying More Than $80,000 A Year—Were Cut At Dade. “Many workers, like Mr. Shoemaker, the Dade employee in Westwood, and his wife, a temporary employee at the same plant, did not leave on their own terms. When they lost their jobs in 1997, they had to abandon plans to buy their first home together. ‘It created a lot of stress,’ said Mr. Shoemaker, 59, who had earned more than $80,000 a year.” [New York Times, 11/13/11]

Bain Capital Cut Jobs And Benefits At GSI Industries While Bain And Other Investors Received Management Fees And A $65 Million Dividend. “That was true in the case of GS Industries, the 10th-biggest Bain investment in the Romney years. Bain formed GSI in the early 1990s by spending $24 million to acquire and merge steel companies with plants in Missouri, South Carolina and other states. Company managers cut jobs and benefits almost immediately. Meanwhile, Bain and other investors received management fees from GSI and a $65-million dividend in the first years after the acquisition, according to interviews with company employees.” [Los Angeles Times, 12/3/11]

  • While Bain Capital Partners Made A 100% Gain On Their Initial Investment In GSI, 700 Workers Were Fired And Lost Health Insurance, Severance And A Chunk Of Their Pension Benefits. “More than 700 workers were fired, losing not only their jobs but health insurance, severance and a chunk of their pension benefits. GSI retirees also lost their health insurance and other benefits. Bain partners received about $50 million on their initial investment, a 100% gain.” [Los Angeles Times, 12/3/11] 

BAIN CAPITAL PROFITED BY ADDING DEBT AND DRIVING COMPANIES INTO BANKRUPTCY

“Bain Investors Typically Profited,” Even When They Added “Significant” Debt To Their Acquisitions And Increased The Likelihood Of Bankruptcy And Job Cuts. “Leveraged buyouts allow investors to purchase businesses with the acquisition funded sometimes by significant amounts of debt. To critics, these leveraged deals can make acquired companies more vulnerable to economic downturns, leading to a greater likelihood of bankruptcy and job cuts. At the same time, the deals sometimes introduce discipline to firms and even whole industries that need it. Either way, Bain investors typically profited.” [Los Angeles Times, 12/3/11]

  • April 1999: Bain Capital “Pushed Dade To Borrow Hundreds Of Millions Of Dollars” To Buy Half Of Investors’ Shares In The Company, Netting Bain $242 Million, Goldman Sachs $121 Million And Top Dade Executives $55 Million – Enough To Cover Most Of The Purchase Price For Dade.  “Bain settled on a common tactic in private equity: it pushed Dade to borrow hundreds of millions of dollars in April 1999 to buy half of Bain’s shares in the company — and half of those of its investment partners. Bain pocketed the $242 million. Goldman received $121 million. Top Dade executives got $55 million, records show. The total payout to shareholders reached $420 million — nearly as much as the purchase price for Dade. The money was hard to resist, acknowledged Mr. Brightfelt, the former Dade president. ‘We were all glad to get some cash out,’ he said, ‘and we thought we deserved it.’” [New York Times, 11/13/11]
  • Under Romney’s And Bain Capital’s Direction, Dade International “Quadrupled” Its Debt, “Propelled The Business Toward Bankruptcy” And Cut 1,700 Workers In The United States. “By the time the Harvard M.B.A.’s from Bain were finished, sales at the medical company, Dade International, had more than doubled. The business acquired two of its rivals. And Mr. Romney’s firm collected $242 million, a return eight times its investment. But an examination of the Dade deal shows the unintended human costs and messy financial consequences behind the brand of capitalism that Mr. Romney practiced for 15 years. At Bain Capital’s direction, Dade quadrupled the money it owed creditors and vendors. It took steps that propelled the business toward bankruptcy. And in waves of layoffs, it cut loose 1,700 workers in the United States, including Brian and Christine Shoemaker, who lost their jobs at a plant in Westwood, Mass. Staggered, Mr. Shoemaker wondered, ‘How can the bean counters just come in here and say, Hey, it’s over?’” [New York Times, 11/13/11]

BAIN CAPITAL PARTNERS DIDN’T CARE ABOUT SAVING OR CREATING JOBS – THEIR GOAL WAS TO CREATE WEALTH

Marc B. Walpow, A Former Managing Partner At Bain: “I Never Thought Of What I Do For A Living As Job Creation … The Primary Goal Of Private Equity Is To Create Wealth For Your Investors.” “Bain managers said their mission was clear. ‘I never thought of what I do for a living as job creation,’ said Marc B. Walpow, a former managing partner at Bain who worked closely with Romney for nine years before forming his own firm. ‘The primary goal of private equity is to create wealth for your investors.’” [Los Angeles Times, 12/3/11]

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