Playing By Rigged Rules, Pretending To Be Fair
By James P. Hoffa, General President, International Brotherhood of Teamsters
Published In The Detroit News on May 9, 2012
There’s nothing funny about a factory closing, unless you’re Mitt Romney.
While campaigning in Wisconsin recently, he shared a “humorous” story about his father closing an auto plant and laying off workers in Michigan.
He was criticized for being “out of touch.” But I think the problem with Mitt Romney is that he doesn’t believe working families should have good jobs at good wages.
That’s a frightening thought. Right now, the last thing America needs is a president who doesn’t understand that a vibrant economy requires a vibrant middle class. Someone has got to build things and someone has got to buy them if our economic system is to work.
Throughout his business career, Romney made his fortune from companies he helped destroy. Under his leadership at Bain Capital, companies stopped making things and workers bought fewer things -- because they lost their jobs.
Romney founded Bain, a vulture capital firm, in 1984. While there he made hundreds of millions of dollars. He devised a system of buying a company, slashing costs, firing workers and halting investment and modernization. It didn’t matter to him if a company failed because he pulled out plenty of cash, early and often.
His track record is what you’d expect. Of all Bain’s investments under Romney, 22 percent went bankrupt or went under within nine years.
In 1992, Bain bought a hanging file folder company in Indiana called SCM. On July 5, 1994, security guards surrounded the building and told all 258 union workers they were fired. They could reapply for their jobs at lower wages. Some did. Eventually the workers were forced to strike. Bain closed the plant.
In 1993, Bain purchased a Kansas City steel mill, GS Industries, and drove it into bankruptcy. Bain partners did just fine, making $50 million. But more than 700 workers lost their jobs, their health insurance, their severance pay and some of their pension benefits. Taxpayers picked up the tab for the company’s underfunded pension plan.
In 1994, Bain led a group of investors to buy Dade International, a medical technology firm in Miami. They fired close to 2,000 workers and loaded the company with debt -- while taking hefty management fees, of course. Dade went bankrupt within eight years.
Between 1987 and 1995, Bain made $587 million from five businesses and all five eventually went bankrupt.
Teamsters are all too familiar with vulture capitalists like Mitt Romney. We have suffered at the hands of hedge funds and private equity firms that follow the blueprint he perfected during his years at Bain. We have watched as inept managers cut costs, laid off workers and halted investment while helping themselves to boatloads of cash. Then when the company fails, they blame the union – just as Romney blames unions for the recession.
This is not the “free market.” This is not “free enterprise.” This is playing by rigged rules and pretending to play fair.
While at Bain, Romney sniffed out tax breaks, subsidies and bailouts, as happy to loot the taxpayer as the companies he wrecked. He himself wasn’t keen on contributing to the public treasury that helped support his ventures. He stashed his money in a Swiss bank account while Bain set up 138 offshore funds in the Cayman Islands.
It’s predatory capitalism and it’s destroying our economy.
To read archived articles from General President Hoffa, click here.