Posted on 01/11/2012 7:40:30 AM PST by Qbert
"At its peak in 1970, the Kansas City plant, then owned by Armco Steel Corp, employed 4,500 people. Poor market conditions forced a wave of layoffs in the early 1980s and led the company to prune its product line. By the early 1990s, the plant focused on two items: wire for products such as mattress springs and tires; and high-carbon balls and rods used by the mining industry to pulverize rocks. It was around that time that the mill workers started noticing the suits.
(Where's all the hand-wringing over Democrat/liberal policies that killed nearly 4000 jobs? Carter & the Democratic Congress are responsible for the bad economy. Remember the gas lines?)
Armco wanted to sell its Kansas City plant to concentrate on other aspects of its business. Jack Stutz and a few of the other Armco managers were looking for backers to help them buy it. They spoke to GE Capital, which, in turn, contacted Bain Capital because it had earned a sterling reputation for turning companies around. The risks were obvious. The mill's equipment was out of date and it faced stiff competition from Nucor Corp, which also made grinding balls.
(They took a risk - that's capitalism. They made money, they risked money.)
Nevertheless, Bain and its partners decided to buy the mill for $75 million. Bain put up about $8 million to gain majority control of the company, renamed GS Technologies Inc. GE Capital, former Armco executives and Leggett & Platt, a major customer for the mill's wire rods, chipped in the rest of the equity. As part of the deal, Armco agreed to cover employee pension obligations if the plant closed within five years – a $120 million liability, according to the Kansas City Business Journal.
Some analysts say Bain should not be blamed for the company's failure, noting that a wave of cheap imports forced nearly half of the U.S. steel industry into bankruptcy during that period. Another company set up around the same time, in which Bain took a minority stake, Steel Dynamics in Fort Wayne, Indiana, thrived."
"GS and Steel Dynamics were about as different as it gets," industry analyst Michelle Applebaum said. GS's core products were vulnerable to competition while Steel Dynamics became "one of the country's lowest-cost manufacturers of steel sheet," a product with more staying power. Steel Dynamics was also a non-union shop."
(Clue - non-union shop thrives)
'Vulture capitalism' is a Left wing term used to disparage making money. Bain did a great job here. They caught a falling knife and made money. So now some union hacks (who went on strike as the company was dying), one of whom is a 'conservative' is taking a shot at, not Romney, but capitalism. Don't let your disgust with Romney blind you to this obvious attack.
This is just another example of why I say that there is NO daylight between Romney and Obama.
Except that Obama hasn’t passed a gun control bill. Romney has.
I’m astounded at the number of people carrying water for Romney here on FR. When a person really looks into Romney’s record, it is very, very difficult to see ANY substantive difference on policy from Obama.
We need to hold the Congress for 2 generations to undo the mess. We don’t need anymore Souters or Kennedys.
His name is different and he has an R in front of his name. That’s about all it takes for many party-line Republicans to pull the lever.
I know that some of the Romney sympathizers I talked with the other day are reading this thread. I hope this causes you all to reconsider your positions.
Great photo graphic, and caption, with your post, Cobol2!
Nobody (that I’ve heard so far)
is yet reporting this as a GAFFE.
And I never heard the media report Romney’s “I like to fire people!” as a GAFFE.
I can’t wait to hear what Gingrich and his fresh Superpac money does with Romney’s latest GAFFES.
Gingrich has stated that he would have voted for TARP had he been in office. Santorum and Perry didn't support it. I can't vouch for Huntsman and Paul, although I highly doubt Paul would have supported it.
Yes, not a good move. I thought Mittens had better debate skills than that.
Here's Romney on GM on 31 May 2009, just before Zero took it over:
The difference between Romney and Obama is that Romney is a liberal pretending to be conservative, while Obama is a traitor pretending to be liberal.
Well... yes and no.
On the top, highest level “optics,” it is a bad comparison. But hey, Romney is the guy who made the comparison, so he’s welcome to the results of his own doing.
Both situations often involve stiffing people in BK court. GM’s bond holders were stiffed, Bain stiffed people holding debt on the companies they strip-mined for capital.
The way some LBO firms work is to load up their acquisitions with debt, the interest on which is deductible, and pull out equity and cash via fat dividend payments. When they’re done pulling out the equity through financial engineering, they can toss the husk onto the junk heap in BK court.
GM involved a bunch of financial and legal maneuvering to stiff owners of the common and preferred stock, as well as debt holders. Those who gained were the new owners, the UAW and their pension funds.
The ideas were similar - what is tantamount to theft, but through financial engineering and tax arbitrage. The beneficiaries were different.
And hey, Harvard MBA’s were involved in both situations, so there’s that similarity too. GM’s CEO Wagoner was a Harvard MBA... and like so many Harvard MBA’s, he got his, and screwed the owners of the company.
If I had my way, Harvard Business School would be used as a USAF ordnance range. Why bomb perfectly nice pieces of the high western deserts of the US when there are so many more deserving pieces of real estate?
“I’m astounded at the number of people carrying water for Romney here on FR.”
Party vassals, most of them. Remoras.
“If I had my way, Harvard Business School would be used as a USAF ordnance range. Why bomb perfectly nice pieces of the high western deserts of the US when there are so many more deserving pieces of real estate?”
Thank you! That image brightened my day.
(Do not forget Harvard Law . . .)
Willie Mitty is the white and delightsome Obama
Obasma is the lost black brother of the Romneys..
The 6th son...
and they are the same religion...
I do think leverage buyouts are more like vulture capitalism and much preferred Cain's Main Street background, but what Romney did was legal. However, it also sounds like the taxpayers were on the hook for some of the money on some of the deals that were done by Bain.
But, I don't know how Obama got away with taking over GM and giving it to the unions without paying off the lenders. Romney's comparison between Obama’s GM takeover and Bain’s leverage buy outs was just nuts. Romney doesn't seem to have a grasp on capitalism.
Romney can tout his experience at Bain, but this experience is going to take him out in the general election. I don't see anything to admire here on some of the leverage buyout deals. If he really did create all those jobs, why won't they release the information to check it out.
I do think leverage buyouts are more like vulture capitalism and much preferred Cain's Main Street background, but what Romney did was legal. However, it also sounds like the taxpayers were on the hook for some of the money on some of the deals that were done by Bain.
But, I don't know how Obama got away with taking over GM and giving it to the unions without paying off the lenders. Romney's comparison between Obama’s GM takeover and Bain’s leverage buy outs was just nuts. Romney doesn't seem to have a grasp on capitalism.
Romney can tout his experience at Bain, but this experience is going to take him out in the general election. I don't see anything to admire here on some of the leverage buyout deals. If he really did create all those jobs, why won't they release the information to check it out.
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