Special report: Romney's steel skeleton in the Bain closet (United Steelworks & Joe Soptic)

Reuters ^ | Sat Jan 7, 2012 7:06pm EST | Andy Sullivan and Greg Roumeliotis

[TexasCajun]

The young men in business suits, gingerly picking their way among the millwrights, machinists and pipefitters at Kansas City's Worldwide Grinding Systems steel mill. Gaping up at the cranes that swung 10-foot cast iron buckets through the air. Jumping at the thunder from the melt shop's electric-arc furnace as it turned scrap metal into lava.

"They looked like a bunch of high school kids to me. A bunch of Wall Street preppies," says Jim Linson, an electronics repairman who worked at the plant for 40 years. "They came in, they were in awe."

Apparently they liked what they saw. Soon after, in October 1993, Bain Capital, co-founded by Mitt Romney, became majority shareholder in a steel mill that had been operating since 1888.

[TexasCajun]

From January:

Very biased report from Reuters but good history on the plant, Bain,the United Steelworkers Union and even ole Joe Soptic is mentioned.

[TexasCajun]

A spokesman for Bain Capital said: "Over $100 million and many thousands of hours were invested in GSI to upgrade its facilities and make the company more competitive during a 7-year period when the industry came under enormous pressure and 44 U.S. steel companies went into bankruptcy. In the same period, we worked to turn around GSI, we helped launch and grow an innovative business called Steel Dynamics that is today a $6 billion global leader.... Our focus remains on building great companies and improving their operations."

GS Industries declared bankruptcy on February 7, 2001, and said it would shut down the Kansas City plant, eliminating 750 jobs. In a press release, the company said the bankruptcy was triggered in part by "the critical need to restructure the company's liabilities."

[AU72]

For every 1 laid off steel worker Obama can use, Romney can use 10 coal workers.

[mountainlion]

So Bain invested $100M in a $80M steel company and kept the doors open for several years. They made $12M on the sale. That is not a good investment. They did keep the doors open and helped the 750 workers for years though.
In Obama’s world all US companies would keep falling farther behind and go bankrupt.

[Kenny]

For every 1 laid off steel worker Obama can use, Romney can use 10 coal workers.

Exactly! How about all the businesses that closed their doors in the last three years, oil workers laid off with his moratorium, etc. When are these guys going to start fighting and stop this propaganda?

[Dr. Ursus]

Getting no media play is the non-union workers at Delphi
(GM bankruptcy) got screwed out of almost half their persions,while union workers get full pensions.

[BillyBonebrake]

I’m starting to think the answer is never.

[TexasCajun]

FEDERAL AID

The U.S. Pension Benefit Guaranty Corp, which insures company retirement plans, determined in 2002 that GS had underfunded its pension by $44 million. The federal agency, funded by corporate levies, stepped in to cover the basic pension payments, but not the supplement the union had negotiated as a hedge against the plant's closure.

For Joe Soptic, who worked at the plant for 28 years, that meant a loss of $283 per month, about 22 percent of his pension. Others lost up to $400 per month, according to documents supplied by the union.

[MileHi]

For Joe Soptic, who worked at the plant for 28 years, that meant a loss of $283 per month, about 22 percent of his pension. Others lost up to $400 per month, according to documents supplied by the union.

So Joe has a pension besides the school custodian job? But he didn't get insurance?

[pepsi_junkie]

"If you look at the steel companies that went under at the time, all of them were unionized," [Charles Bradford, an analyst at Bradford Research] said. "I'm not saying this was the only factor -- these firms faced other headwinds such as cheap labor and a strong dollar ... but the unions held them back."

Summary: only unionized mills closed, but don't blame the unions really because they also had to deal with cheap competition and the strong dollar. Hmm? Didn't the non-union mills also have those same problems and yet they still stayed open? Hmmm, well, okay, blame the unions after all.

[edcoil]

You have to remember at that time, China was dumping steel in the USA - none of the union shops could compete and all were in very big trouble. USX (US Steel) laid off tons was well because the unions refused to lower their demands.

Police/Fire/ are all doing this now destroying cities.

[southernerwithanattitude]

I JUST wish Bain would have bought Atlantic Steel in Atlanta! We went bankrupt in 1997. I needed 6 more years to retire. But guess what I did different than this guy? I got another job and moved on with my life. There are other places to work than an old dirty dangerous steel mill!

[Noamie]

Reuters slanted news summary guide:

Bain:
“We’re going to come in here with our own money and see if we can help you succeed because you are failing, we’re not going to cut your pay or benefits, and you can keep your health insurance. Oh, and by the way, you have some cool stuff here that we don’t normally keep in our corporate offices.

Tough Steelworker Dude:
“You rat BASTARDS!!”

[southernerwithanattitude]

I’ve gotten used to the union bashing on here and just ignore it. Unless you’ve worked somewhere where there is liquid steel a few inches from your head then I will respect your thoughts on Unions.

[norton]

So Joe has a pension besides the school custodian job? But he didn't get insurance?

My math is rusty but it looks like old Joe was/is taking in about 36K a year after his wife quit work. That's not a whole lot less than my 2 pensions plus SS.

His union salary must have been reasonably high for the area and his wife had an income and insurance until she quit.

Having quit, she didn't seek reemployment or private insurance (apparently she felt that an injured rotator cuff was enough to disable her but not enough to apply for disability or look into insurance).

I'm saddened by her death but note that neither spouse even looked into her health until 2 years after she quit her job and 22 days before her death.

These people didn't save, were not concerned about health, contingencies, or living standards and now Septic is making a new career as a long term Romney basher.

I know this response sounds pretty cold, but I also have to wonder how that new job is effecting his living standards today?

[MileHi]

These people didn't save, were not concerned about health, contingencies, or living standards ...

That is what it looks like.

[norton]

I said my math was rusty:
News Busters indicates that Septic Softic's income was $47K after his lay off;
Same as it had been before the mill closed it's doors.

http://newsbusters.org/blogs/tim-graham/2012/08/09/washpost-buries-damning-new-soptic-facts-under-democrats-call-joe-steelw