Mitt Romney's 'Jobs Record' Is A Sham
Mitt Romney is attempting to establish himself as the Republican presidential candidate with the most credibility on job creation, but the former Massachusetts governor may have trouble defending his record. During Romney's tenure as governor, Massachusetts' job growth was bested by every state in the nation except three, including Hurricane Katrina-devastated Louisiana. As CEO of Bain Capital, Romney profited as five of the companies under his firm's direction went bankrupt, and thousands of workers lost their jobs. One particularly brutal round of firings came back to haunt Romney during his failed 1994 Senate campaign, when laid-off workers protested his candidacy.
As Governor, Romney Oversaw Dismal Job Growth In Massachusetts
Huffington Post: As Governor, "Romney Presided Over One Of The Puniest Rates Of Growth Among The 50 U.S. States." According to the Huffington Post: "[A]s Massachusetts governor from January 2003 to January 2007, Romney presided over one of the puniest rates of employment growth among the 50 U.S. states, at a time the nation's economy was booming." [Huffington Post, 5/31/11]
After First Year With Romney As Governor, Massachusetts Ranked "Dead Last" In Jobs Growth. According to MarketWatch: "How was Romney's performance by his first anniversary? Fiftieth out of fifty. That's right. In Romney's first year in charge, Massachusetts ranked dead last in America in jobs growth." [MarketWatch, 2/23/11]
By The End Of Romney's Term, Massachusetts Still Ranked "Fourth From Last" In Jobs Growth. According to MarketWatch:
The Republican contender was the governor of Massachusetts from January 2003 to January 2007. And during that time, according to the U.S. Labor Department, the state ranked 47th in the entire country in jobs growth. Fourth from last.
The only ones that did worse? Ohio, Michigan and Louisiana. In other words, two rustbelt states and another that lost its biggest city to a hurricane.
The Massachusetts jobs growth over that period, a pitiful 0.9%, badly lagged other high-skill, high-wage, knowledge economy states like New York (2.7%), California (4.7%) and North Carolina (7.6%).
The national average: More than 5%. [MarketWatch, 2/23/11, emphasis added]
"On All Key Labor Market Measures," Massachusetts "Lagged Behind The Country." According to a Boston Globe op-ed by economic researchers at Northeastern University's Center for Market Studies: "On all key labor market measures, the state not only lagged behind the country as a whole, but often ranked at or near the bottom of the state distribution. Formal payroll employment in the state in 2006 was still 16,000 or 0.5 percent below its average level in 2002, the year immediately prior to the start of the Romney administration. Massachusetts ranked third lowest on this key job generation measure and would have ranked second lowest if Hurricane Katrina had not devastated the Louisiana economy. Manufacturing payroll employment throughout the nation declined by nearly 1.1 million or 7 percent between 2002 and 2006, but in Massachusetts it declined by more than 14 percent, the third worst record in the country." [Center for Market Studies op-ed, Boston Globe, 7/29/07]
Romney Approved Raises For State Government Management That Increased Risk Of Worker Layoffs. According to the Boston Globe: "Governor Mitt Romney has quietly approved a pay increase for 2,700 managers across state government, a move that may trigger more layoffs of lower-level workers as the state copes with its bleakest budget in more than a decade. In a confidential memo obtained by the Globe, Romney's human resources chief, Ruth N. Bramson, wrote that the governor granted a 2 percent across-the-board pay raise to managers in part because rank-and-file workers are gaining ground on their bosses through union-negotiated raises. The pay increase for managers, which is retroactive to the beginning of this month, is coming on top of 2.7 percent cost-of-living increases that managers received July 1. About 2,700 managers across the state's executive branch are receiving the additional pay raise, with the cost estimated to approach $3.5 million." [Boston Globe, 7/31/03]
As CEO, Romney Profited While Thousands Of Workers Were Laid Off And Five Of His Companies Went Bankrupt
Romney Was CEO Of Bain Capital. From the Boston Globe:
Throughout his 15-year career at Bain Capital, which bought, sold, and merged dozens of companies, Romney had other chances to fight to save jobs, but didn't. His ultimate responsibility was to make money for Bain's investors, former partners said.
Much as he did when running for Massachusetts governor, Romney is now touting his business credentials as he campaigns for president, asserting that he helped create thousands of jobs as CEO of Bain. [Boston Globe, 1/27/08]
Companies Acquired By Romney's Firm Cut Thousands Of Jobs, And Several Ended Up In Bankruptcy. According to Politico:
- In 1992, the firm acquired American Pad & Paper. By 1999, the year Romney left Bain, two American plants were closed, 385 jobs had been cut and the company was $392 million in debt.
The next year, Ampad was forced into bankruptcy.
- Bain Capital and Goldman Sachs bought Dade International for about $450 million in 1994.
The firm quickly fired or relocated at least 900 workers. Over the next several years, it sunk increasingly into debt and laid off 1,000 workers.
In 2002 - after Romney had left Bain - it filed for Chapter 11 bankruptcy protection.
- A 1997 buyout ofLIVE Entertainment for $150 million resulted in 40 layoffs, roughly one in four of the company's 166 workers.
The job cuts affected all aspects of the company, from production and acquisition to legal and public relations.
- In 1997, Bain bought a stake in DDI Corp., a maker of electronic circuit boards.
Three years later, Bain took the company public and collected a $36 million payout.
But by August 2003, the company filed for bankruptcy protection, laying off more than 2,100 workers.
Four months after the bankruptcy, unhappy shareholders sued company executives, the initial public offering underwriters and Bain for mismanaging the IPO and failing to disclose company financial information. (Romney was not named in the suit.) [Politico, 1/18/08]
New York Post: Romney "Made Fortunes By Bankrupting Five Profitable Businesses." According to the New York Post:
He was not involved in decisions to take distributions from two Bain Capital businesses that later failed. New York Times, June 3, 2007
"People in America want to know who can get 15 million people back to work."
Owned a controlling interest in Bain Capital when it took payments from five companies that later failed.
Made fortunes by bankrupting five profitable businesses that ended up firing thousands of workers. [New York Post, 2/20/11, emphasis original]
- Five Businesses Under Bain Made Huge Profits But Eventually Went Bankrupt. According to Think Progress: "22 percent of the money Bain Capital raised from 1987 to 1995 was invested in five businesses - Stage Stores, American Pad & Paper, GS Indusries, Dade, and Details. These five made Bain $578 million in profit, even as all five eventually went bankrupt." [Think Progress, 4/12/11]
Former Romney Colleague: "They're Whitewashing His Career Now. ... We Had A Scheme Where The Rich Got Richer." According to the Los Angeles Times:
During Romney's tenure at Bain Capital, outside experts say, most of the companies he and his colleagues helped manage ended up stronger and more profitable. Although exact figures are impossible to obtain, more companies clearly added jobs than cut them.
Some of Romney's colleagues recall him as vain, however, and focused only on the bottom line. They saw him as impatient and unconcerned about those affected by his decisions.
"They're whitewashing his career now," said Marc B. Wolpow, a former managing director at Bain Capital who opposes Romney's White House bid. "We had a scheme where the rich got richer. I did it, and I feel good about it. But I'm not planning to run for office." [Los Angeles Times, 12/16/07]
Boston Globe: Romney Had "Chances To Fight To Save Jobs, But Didn't." According to the Boston Globe: "Romney's decision to stay on the sidelines as his firm, Bain Capital, slashed jobs at the office supply manufacturer stands in marked contrast to his recent pledges to beleaguered auto workers in Michigan and textile workers in South Carolina to 'fight to save every job.' Throughout his 15-year career at Bain Capital, which bought, sold, and merged dozens of companies, Romney had other chances to fight to save jobs, but didn't. His ultimate responsibility was to make money for Bain's investors, former partners said." [Boston Globe, 1/27/08]
Boston Globe: "Romney's Tenure [At Bain] Indicates That Job Growth Was Not A Particular Priority." According to the Boston Globe:
Much as he did when running for Massachusetts governor, Romney is now touting his business credentials as he campaigns for president, asserting that he helped create thousands of jobs as CEO of Bain. But a review of Bain's investments during Romney's tenure indicates that job growth was not a particular priority. [...]
In many cases, such as Staples Inc., the Framingham retailer, and Steel Dynamics Inc., an Indiana steelmaker, the companies expanded and added thousands of jobs. In other cases, such as Ampad and GS Industries, another steelmaker, Bain-controlled companies shuttered plants, slashed hundreds of jobs, and landed in bankruptcy.
But in almost all cases Bain Capital made money. In fact, the firm earned substantially more from Ampad than Staples. Staples returned about $13 million on a $2 million investment; Ampad yielded more than $100 million on $5 million, according to reports to investors. [Boston Globe, 1/27/08]
Laid-Off Factory Workers Helped Bring Down Romney's 1994 Senate Campaign
Under Bain Management, Ampad Workers Were Fired, Benefits And Salaries Were Slashed, And Strikebreakers Were Hired. According to the Los Angeles Times:
Bain Capital had bought a controlling interest in a paper products company called Ampad for $5 million in 1992. Two years later, after Ampad bought a factory in Marion, Ind., the new management team dismissed about 200 workers, slashed salaries and benefits, and hired strikebreakers after the union called a walkout.
"We were just fired," Randy Johnson, a former worker and union officer at the Marion plant, recalled in a telephone interview. "They came in and said, 'You're all fired. 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." [Los Angeles Times, 12/16/07]
Former Ampad Employees Protested Romney's Unsuccessful 1994 Senate Campaign. According to the Los Angeles Times:
In October 1994, [former Ampad worker Randy] Johnson and other striking workers drove to Massachusetts to protest Romney's Senate campaign. "We chased him everywhere," Johnson recalled. "He took good jobs with benefits, and created low-wage, part-time, no-benefit jobs. That's what he was creating with his investments."
At first, Romney tried to justify the Indiana layoffs as necessary in "the real world." He then sought to distance himself, arguing that he took a leave of absence from Bain Capital before Ampad bought the factory. The dispute proved potent, however, and Kennedy trounced him in the election. [Los Angeles Times, 12/16/07]
Ads Showing Unhappy Former Ampad Employees Were "The Back-Breaker" In Unsuccessful 1994 Senate Campaign. According to the Huffington Post:
The back-breaker for Romney was a series of television ads produced by Bob Shrum (author of the book, due out shortly, No Excuses: Concessions of a Serial Campaigner). Charlie Baker, the Kennedy campaign's senior strategist that year, told The Huffington Post that the ads were designed "to get on the record all sides of Romney's business career" -- a hugely successful leveraged-buyout practice that Romney claimed had created jobs.
The Kennedy campaign discovered that Ampad, a company purchased by Romney's Bain Capital in 1992, had recently bought SCM, an office products company in Marion, Indiana. All 350 workers at the SCM plant were laid off, then offered their jobs back at reduced wages. They went on strike. The Kennedy campaign sent a crew to Marion to film the workers. A half dozen ads resulted from the interviews, most of them quoting workers denouncing Romney for lining his pockets at their expense. A women [sic] tells viewers: "I'd like to say to the people of Massachusetts, if you think it can't happen to you, think again, because we thought it couldn't happen here either." Romney nosedived in the polls. [Huffington Post, 5/30/07]
Romney On Ampad Layoffs: "Sometimes The Medicine Is A Little Bitter." According to the New York Times:
But leveraged buyouts often lead to layoffs, a business reality that has impinged on Mr. Romney's political hopes at least once before. In his 1994 campaign for the Senate, Mr. Romney's efforts to unseat Edward M. Kennedy were derailed in part because of accusations that Bain Capital had fired union workers at an Indiana company it controlled. Mr. Kennedy's campaign cut a series of commercials, focusing on laid-off workers, that cut to the quick. (Those ads are available on The Huffington Post.) Mr. Romney has said that he had nothing to do with the firings.
In an interview with The Times, Mr. Romney acknowledged that Bain Capital's acquisitions has sometimes led to layoffs, but that he could explain them to voters.
"Sometimes the medicine is a little bitter but it is necessary to save the life of the patient," he said. "My job was to try and make the enterprise successful, and in my view the best security a family can have is that the business they work for is strong." [New York Times, 6/4/07]