Posts tagged ‘bain capital’
What folks in Myrtle Beach, South Carolina are reading this morning regarding Mitt Romney and Bain Capital:
Saturday, Jan. 14, 2012
Romney’s Bain Capital made millions off Georgetown Steel as mill morale, finances suffered
Boston-based Bain Capital LLC more than doubled its money on GS Industries Inc. – the former parent company of Georgetown Steel – under Mitt Romney’s leadership in the 1990s, even as the steel manufacturer went on to cut more than 1,750 jobs, shuttered a division that had been around for 100 years and eventually sank into bankruptcy.
Bain Capital spent $24.5 million to acquire GS Industries in 1993, according to an investment prospectus for the company that was obtained by the Los Angeles Times and reviewed by The Sun News. By the end of that decade, Bain Capital estimated its partners had made $58.4 million off its investment in GS Industries, according to the prospectus.
Bain Capital’s partners also earned multi-million dollar dividends from GS Industries and annual management fees of about $900,000. But by the time GS Industries filed for bankruptcy protection in 2001, it owed $553.9 million in debts against assets valued at $395.2 million.
“We were doing well and then Bain Capital bought us and they took everything they could out of the company without making the investments we needed to stay competitive,” said James Sanderson, who has been with the mill since 1974 and served as its union president since 1988. “They ran the company into bankruptcy.”
Bain Capital came to own Georgetown Steel after it provided the financing for a management-led buyout of Armco Worldwide Grinding System of Kansas City, Mo., in 1993. The Armco plant was renamed GS Technologies, which merged with Georgetown Industries in 1995 to become GS Industries Inc. At the time, the combined entities – headquartered in Charlotte, N.C. – had $1 billion in revenue and employed 3,800 people worldwide as the largest producer of carbon wire rods in North America.
Sanderson said Bain Capital replaced longtime managers who had built Georgetown Steel with bean counters looking for ways to cut costs. They demanded increasing financial performance with little idea of how the daily operations were run, he said.
“They were investors, they weren’t steel mill operators,” he said.
Bain Capital propped up short-term earnings, Romney opponents say, so the venture capital firm could borrow money that went toward investors’ dividends – enriching Bain Capital but leaving the companies with unsustainable debt.
More here. It’s a long and comprehensive article.
Watch it before the Republicans decide they’re going to rally around Romney and it’s taken down. Again, here it is.
Here are a few choice quotes:
Romney and Bain’s profits, at the expense of 15,000 jobs, was described by the Boston Herald as, ‘disgusting.’
It was called The Bain Way. Romney’s Bain Capital almost always managing to turn the misfortunes of others into their own enormous financial gains.
And I couldn’t resist including this screenshot.
Phleez. And no Mitt, I’m not jealous.
UPDATED Below @8:07 p.m. ET
The next time you hear Rush Limbaugh defend (or promote) Mitt Romney, remember this:
Talk radio king Rush Limbaugh has emerged as a key defender of Mitt Romney’s tenure at Bain Capital, where — his Republican and Democratic critics charge — layoffs at companies Bain owned should be blamed on Romney.
But Limbaugh hasn’t mentioned his own tie to the venture capital firm: Bain owns Clear Channel Communications, whose subsidiary inked a $400 million, eight-year syndication deal with Limbaugh in 2008.
Ultimately, Mitt Romney is Rush Limbaugh’s boss so of course Limbaugh is going to kiss his a**.
I wonder if Limbaugh will disclose this ah, huge conflict of interest. Nah.
Ed Schultz mentioned NBC’s connection (I swear, 100 people own everything) to Bain Capital tonight (quickly, I might add):
Starting on last night’s Ed Show with Ed Schultz, MSNBC anchors are now disclosing their parent company’s ties to Bain Capital, the buyout firm co-founded by Mitt Romney.
In July 2008, NBC Universal, Bain Capital and Blackstone Group bought the Weather Channel for an estimated $3.5 billion.
Here’s a powerful new ad featuring two average working Americans who lost their jobs to Mitt Romney and Bain Capital:
Poor guys. They look exhausted and broken.
It was bad enough that from the mid-80’s through the mid-90’s Mitt Romney headed Bain Capital, which was in the business of buying companies and shrinking them (primarily via employee layoffs) to increase their profitability. Now we learn that ol’ Mitt is still taking millions from that ruthless business:
Mitt Romney is still making millions of dollars from layoffs engineered by Bain Capital, the private equity firm he helped to start.
As revealed by the New York Times, Romney negotiated a backroom deal with Bain that gave the already wealthy former governor a share of Bain’s profits even after he left the firm.
One of the ways Bain makes its money is from buying up companies then shredding the jobs of many employees in a scheme designed to cut costs. Romney profited when Bain bought KB Toys and laid off thousands of employees.
The funds for one of Romney’s summer homes could have come from the money Bain made when they facilitated a deal that cut 2,500 jobs from radio broadcaster Clear Channel.
It’s a sign of how cohesive the corporate media’s reporting (or its lack thereof) is that Romney’s stint at Bain isn’t more widely known. The reason for that, it seems to me, is that a man who bought companies and increased their profitability by laying people off would be a pariah amongst voters this year and the corporate media knows that. The corporatocracy sees Romney (1) as one of their own and, (2) as the candidate most likely to have a chance against Obama, thus the kid gloves.