Mitt Romney touts his business experience as a singular qualification for the office of President of the United Stated. [1] But now his opponents in the Republican primaries are calling the nature of that experience into question, pointing out that Romney’s business acumen was plied largely in the art of enriching his company, and himself, at the expense of laid-off workers. [2]
They refer to Mr. Romney’s career at the head of Bain Capital, which was in the business of buying companies, implementing its own business techniques, then selling them for a profit. [3] Of such ventures Ross Gittell, professor at the University of New Hampshire's Whittemore School of Business and Economics, has said: “The objective is: make money for investors. It's not to maximize jobs.” The bitter reality is that investors often realize a better return when jobs are slashed, and Bain Capital did not eschew this technique under Romney’s watch.
A telling example of Bain Capital’s strategy is the case of Dade International, a medical diagnostics firm acquired by Bain Capital and Goldman Sachs in 1994. [4] Dade was thereafter merged with several other companies, resulting in layoffs and plant closures. At least 1,600 employees were dismissed from 1996 to 1999.
In June of 1999 Bain Capital and Goldman Sachs decided that the time for harvest had come, and sold back their shares to Dade for $365.4 million. The problem was that Dade (now Dade Behring) couldn’t really afford the purchase. It borrowed so much money to make the transaction that when sales slumped and interest rates rose the company struggled to pay its creditors. It eventually filed for bankruptcy. “These guys worked there for two years and ended up as millionaires,” said a divisional vice-president whose position was eliminated. “I worked there for 25 years and I’m not a millionaire.”
That, of course, is how things go in the world of business. Your humble servant will refrain from painting Mr. Romney as a singularly sinister character. He may be better than most in his particular line of work. But does this history exemplify the skill set we want in a President of the United States?
It's good to see the Grinch wing of the Repugs eat their own on this issue & produce sound bytes that Obama can replay during his campaign. LOL.
ReplyDeleteI review medical records for a national data analytics corporation. Two weeks before Christmas they announced major lay-offs effective immediately. The reason: Our organization responded to a major insurance company's request and developed a robust system to identify provider fraud, waste, and abuse. We identified $30 million in fraud, waste, and abuse across 14,000 providers. The result: The insurance company canceled the contract claiming they do not have the resources to follow up on the findings.
ReplyDelete