These are just a few excerpts from an excellent 2012 article about Mittens, as my good friend David calls him. But by all means, its worth reading in full – chock full of corporate corpses and financial horror stories that will make you not only cringe with disgust at his trail of destruction but also wonder in amazement at how he remains a darling of the mainstream media and a potential candidate for president in 2016.
[Romney’s] specialty was flipping companies—or what he often calls “creative destruction.” It’s the age-old theory that the new must constantly attack the old to bring efficiency to the economy, even if some companies are destroyed along the way. In other words, people like Romney are the wolves, culling the herd of the weak and infirm.
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[His company] Bain would slash costs, jettison workers, reposition product lines, and merge its new companies with other firms. With luck, they’d be able to dump the firm in a few years for millions more than they’d paid for it.
But the beauty of Romney’s thesis was that it really didn’t matter if the company succeeded. Because he was yanking out cash early and often, he would profit even if his targets collapsed.
But Romney is no ordinary vulture capitalist, feeding off companies in distress. Romney is a circling parasite. His company Bain capital, and others like it, zero in on thriving companies, then pick them apart until they’re nothing but debt skeletons.
In the midst of [his] 1994 campaign [for US Senate], one of Romney’s companies, American Pad & Paper, bought a plant in Marion, Indiana. At the time, it was prosperous enough to be running three shifts.
Bain’s first move was to fire all 258 workers, then invite them to reapply for their jobs at lower wages and a 50 percent cut in health care benefits.
“They came in and said, ‘You’re all fired,'” employee Randy Johnson told the Los Angeles Times. “‘If you want to work for us, here’s an application.’ We had insurance until the end of the week. That was it. It was brutal.”
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[R]omney was pounded in the election. Meanwhile, the Marion plant closed just six months after Bain’s purchase. The jobs were shipped to Mexico.
Yet Romney didn’t learn his lesson. He seemed incapable of noticing that his brand of “creative destruction” left a lot of human wreckage in its wake. Or that voters might see him as more scumbag than saint.
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Even Kaplan admits that private equity firms rarely create jobs. Workers are seen as costs, and costs are the enemy. According to Kosman, Romney was in truth among the most heinous job-killers of them all.
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Romney purchased Armco with just $8 million down and borrowed the rest of the $75 million price tag. Then he issued bonds—basically IOUs—to borrow even more to pay himself and his investors $36 million.
Within a year, he’d already made four times his initial investment while barely lifting a finger. But he’d also run up a staggering $378 million in debt on GSI’s tab.
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Romney was charging GSI $900,000 a year in management fees to run the company. The Kansas City mill received $900,000 worth of ineptitude in return.
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[Another] example of Romney’s cold-blooded approach is his 1994 purchase of Dade International, an Illinois medical-equipment company. He soon merged it with two similar firms, a move that tripled sales.
Once again, he couldn’t help but raid the vault, peeling away $100 million for himself and investors at the same time Dade was laying off 1,700 American workers.
There’s many more where those came from. Romney’s record for destruction is as long as it is stunning. But Romney is hardly alone in his dastardly deeds:
The feds take $100 billion a year from everyday taxpayers and send it straight to companies like Romney’s, says DeHaven, who now works for the Cato Institute, a conservative think tank.
It’s more than high time Americans start asking why. It’s time to take the necessary steps to reverse this ongoing looting and destruction of American lives and the economy.