Sunday, June 24, 2012 3:57:06 AM
Mitt Romney, Outsourced
By Charles P. Pierce
at 10:46AM June 22, 2012
This vast new Washington Post report about how Willard Romney and his money-chewing friends got really wealthy [ http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_story.html (the post to which this is a reply)] by investing in companies dedicated to shipping American jobs overseas is yet one more reason why the Obama campaign really shouldn't have slacked off from tearing into Romney's career at Bain Capital just because Cory Booker, and Ed Rendell, and Bill Clinton got nervous about it. It also should set off another spate of really remarkable lying from the Republican candidate over the next few days.....
While economists debate whether the massive outsourcing of American jobs over the last generation was inevitable, Romney in recent months has lamented the toll it's taken on the U.S. economy. He has repeatedly pledged he would protect American employment by getting tough on China. "They've been able to put American businesses out of business and kill American jobs," he told workers at a Toledo fence factory in February. "If I'm president of the United States, that's going to end."
Willard Romney: friend of the working man. In Shanghai.
(Of course, the Post felt itself obligated to include the now-mandatory non sequitur disclaimer about the magic of the global economy. While the export of jobs has been disruptive for many workers and communities in the United States, outsourcing has been a powerful economic force. It has often helped lower the prices that American consumers pay for products and created a global supply chain that has made U.S. companies more nimble and profitable. Nimbleness! It takes some nifty footwork to tap-dance your way past your conscience [ http://www.pbs.org/moyers/citizensclass/capitol_crimes/abramoff_inc/ ] in the Marianas Islands Free Enterprise Zone.)
American business stopped caring about the political entity that is the United States of America a very long time ago. We have been propagandized repeatedly that the global economy was either the greatest thing that ever happened ever, or so unstoppable a force that the best our tired old democracy could do is get along within it the best it could. The basic questions of national sovereignty and corporate accountability were drowned out or brushed aside. Now, we have a presidential candidate who is a perfect product of that new transnational economic system. Willard Romney could be — hell, should be — the vehicle through whom we pass judgment on all of it.
©2012 Hearst Communications, Inc. (emphasis in original)
http://www.esquire.com/blogs/politics/romney-bain-overseas-jobs-9947349 [with comments]
===
Why Romney's job outsourcing record matters
Mitt Romney opened the door for attacks on Bain Capital's history of outsourcing American jobs.
By Dan Primack
June 22, 2012: 11:41 AM ET
FORTUNE -- Is Mitt Romney an American job creator, or an American job destroyer?
That's the question posed by a 1,632-word piece [ http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_story.html (the post to which this is a reply)] in today's Washington Post, which details how Bain Capital invested in several companies that both directly and indirectly encouraged American jobs to be shipped overseas.
For example, the WaPo delves into Bain's 1993 investment in Corporate Software Inc., a provider of outsourced services like call centers for U.S. technology companies like Microsoft (MSFT):
Initially, CSI employed U.S. workers to provide these services but by the mid-1990s was setting up call centers outside the country.
Two years after Bain invested in the firm, CSI merged with another enterprise to form a new company called Stream International Inc. Stream immediately became active in the growing field of overseas calls centers. Bain was initially a minority shareholder in Stream and was active in running the company, providing "general executive and management services," according to SEC filings.
By 1997, Stream was running three tech-support call centers in Europe and was part of a call center joint venture in Japan, an SEC filing show.
To be sure, there is nothing surprising about a private equity firm being involved in what is now known as "business process outsourcing." It's big business, with Pitchbook reporting that private equity firms have made 333 BPO investments valued at nearly $27 billion since the beginning of 2011 (although not all of them necessarily involve U.S. jobs being lost, as "outsourcing" is sometimes distinct from "offshoring").
Likewise, Romney's Bain Capital makes sense as one of the earlier adopters. Not only because it was one of the earlier private equity firms to exist, but also because of its strong ties to management consulting firm Bain & Company.
Similar lack of shock for WaPo's (fairly lackluster) case that Bain Capital also encouraged its non-BPO portfolio companies to take advantage of outsourcing trends. In fact, one of Romney's former colleagues recently told me: "In the 1980's, private equity made a lot of its money by stripping and flipping. In the 1990's and early 2000's, it was about outsourcing. Since then, it's been about growth." No shame or sense of regret. Just matter-of-fact.
The problem with this history, however, is that it runs counter to Mitt Romney's own narrative. And he only has himself to blame.
On the campaign trail, Romney has a tendency to talk about a job creation record. Specifically, that he helped create 100,000 "net jobs." As we've previously reported [ http://finance.fortune.cnn.com/2011/12/22/why-bain-capital-doesnt-track-lost-jobs/ ], it's a figure that no one, including Romney, can actually calculate. Bain Capital never tracked the number of jobs it created, let alone the number it destroyed or outsourced. Nor did it track any collateral employment damage, such as a mom-and-pop stationary store put out of business by Staples (SPLS).
Had Romney been more honest, he simply would have said that Bain Capital had a singular mission: Make money for its investors. And, if he wanted to make it sound a little less Gordon Gekko, he could have added that many of those investors were nonprofit institutions like universities and charitable foundations. His responsibilities as an elected official, of course, would be different.
But Romney chose to highlight Bain's job creation record, rather than its financial performance. And, by doing so, invited analysis like today's Washington Post story.
It should be interesting to see how the Romney campaign responds, particularly if someone is able to ask the candidate for the number of U.S. jobs that were outsourced by Bain Capital portfolio companies during Romney's tenure. After all, he must have that number if he's so sure about 100,000 jobs being created.
© 2012 Cable News Network. A Time Warner Company
http://finance.fortune.cnn.com/2012/06/22/romney-outsourcing-bain/ [with comments]
===
Axelrod: Mitt Romney Running To Be ‘Outsourcer-In-Chief’
Evan McMorris-Santoro
June 22, 2012, 12:48 PM
After Friday’s Washington Post article [ http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_story.html (the post to which this is a reply)] detailing Bain Capital’s work with outsourcing during the time Mitt Romney was at the helm of the firm, the Obama campaign seems to think its point about Romney has been made.
“People really have a fundamental choice in this election,” Obama campaign strategist David Axelrod said on a conference call with reporters Friday. “The question is, do they want an outsourcer-in-chief in the Oval Office or do they want a president who’s going to fight for American jobs and American manufacturing and the American middle class.”
Romney, of course, is the “outsourcer-in-chief” in that sentence. Despite Romney campaign protestations [ http://www.politico.com/blogs/burns-haberman/2012/06/romney-campaign-outsourcing-does-not-equal-offshoring-127021.html ] that the Post article doesn’t make the distinction between “off-shoring,” in which American firms are replaced by workers in foreign locations, and “outsourcing,” which can often include moving jobs from one domestic firm to another to save costs, the Obama campaign says the story shows a presumptive Republican nominee who made his money helping companies pay American workers less and less.
“For those of us who looked at that story today, there’s a bright line between offshoring American jobs, that’s moving them ouside of this country, and outsourcing them,” Obama surrogate Leo Hindery, partner at a media industry private equity fund, told reporters on the call. “Bain was a company that preponderantly off-shored jobs. And even in those where it outsourced domestically, it did so into lower-cost settings at the expense of workers and their union organizers. “
© 2012 TPM Media LLC
http://2012.talkingpointsmemo.com/2012/06/david-axelrod-mitt-romney-outsourcer-in-chief.php [with comments]
===
Report: Romney talks tough on China, but Bain was key player in outsourcing trend
)
June 22, 2012 7:44 AM
UPDATED 3:45 p.m. ET
(CBS News) While Mitt Romney campaigns on "getting tough" with China, the firm he founded nearly 30 years ago, Bain Capital, was a key player in the acceleration of the outsourcing trend that has shifted millions of American jobs overseas, the Washington Post reported Friday [ http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_story.html (the post to which this is a reply)], citing its analysis of the financial company's securities filings with the government.
"While Bain was not the largest player in the outsourcing field, the private equity firm was involved early on, at a time when the departure of jobs from the United States was beginning to accelerate and new companies were emerging as handmaidens to this outflow of employment," the newspaper wrote.
The newspaper noted that outsourcing jobs has negative effects on individuals, specific firms and some communities. It has also lowered prices for American consumers and made many U.S. companies more profitable from the global supply chain it has created.
"Bain played several roles in helping these outsourcing companies, such as investing venture capital so they could grow and providing management and strategic business advice as they navigated this rapidly developing field," the newspaper said.
That reality is in sharp contrast to the presumptive Republican presidential nominee's rhetoric in his 2012 bid for the White House.
Speaking to workers at a Toledo fence factory in Ohio earlier this year, Romney said China has "been able to put American businesses out of business and kill American jobs."
"If I'm president of the United States, that's going to end," he said.
The Romney campaign issued a statement denouncing the story.
"This is a fundamentally flawed story that does not differentiate between domestic outsourcing versus offshoring nor versus work done overseas to support U.S. exports," said Andrea Saul, spokeswoman for the Romney campaign, adding that if Romney wins the White House, "he will implement policies that make it easier and more attractive for companies to create jobs here at home."
And President Obama's campaign predictably touted the report as evidence that Romney does not care about average workers, calling it a "breathtaking hypocrisy" in a press release early Friday morning.
"It's particularly egregious coming on a day when Gov. Romney began running an ad in Ohio promising to stand up to China, demanding a level playing field for our businesses and workers, when it turns out his companies were actually involved in shipping jobs to China and India," Obama campaign strategist David Axelrod later told reporters on conference call.
Mr. Obama plans to reference the report in a speech Friday afternoon at a community college in Tampa, Florida.
"Today it was reported in The Washington Post that the companies [Romney's] firm owned were 'pioneers' in the outsourcing of American jobs to places like China and India. Pioneers!" Mr. Obama plans to say, according to his prepared remarks. "Tampa, we don't need an outsourcing pioneer in the Oval Office. We need a president who will fight for American jobs and American manufacturing. And that's what my plan will do."
Additional reporting by Jillian Hughes.
Copyright © 2012 CBS Interactive Inc.
http://www.cbsnews.com/8301-503544_162-57458601-503544/report-romney-talks-tough-on-china-but-bain-was-key-player-in-outsourcing-trend/ [with comments]
===
Bain Capital Horror Stories Continue to Haunt Mitt Romney’s Campaign
Bain, back in the day.
By Caroline Bankoff
June 23, 2012 at 4:08 PM
The double-edged sword that is Mitt Romney's career at Bain Capital will not stop causing image problems for the candidate. This time, it's a pair of articles chronicling the private equity firm's outsourcing of American jobs and methods for draining money out of the failed companies it controlled. The Washington Post has the former story [ http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_story.html (the post to which this is a reply)], which reporters gleaned from Bain's Securities and Exchange Commission filings. While campaigning, Romney has frequently promised to bring jobs currently done by overseas workers back to the United States, but the filings show that Bain began investing in companies that specialized in outsourcing in the early nineties.
Bain’s foray into outsourcing began in 1993 when the private equity firm took a stake in Corporate Software Inc., or CSI, after helping to finance a $93 million buyout of the firm. CSI, which catered to technology companies like Microsoft, provided a range of services including outsourcing of customer support. Initially, CSI employed U.S. workers to provide these services but by the mid-1990s was setting up call centers outside the country.
Two years after Bain invested in the firm, CSI merged with another enterprise to form a new company called Stream International Inc. Stream immediately became active in the growing field of overseas calls centers. Bain was initially a minority shareholder in Stream and was active in running the company, providing “general executive and management services,” according to SEC filings.
By 1997, Stream was running three tech-support call centers in Europe and was part of a call center joint venture in Japan, an SEC filing shows. “The Company believes that the trend toward outsourcing technical support occurring in the U.S. is also occurring in international markets,” the SEC filing said.
The piece goes on to describe four other major outsourcing-related acquisitions and deals made during Romney's tenure at the firm, though it notes that "Bain was not the largest player in the outsourcing field," and that some of their most aggressive expansion in that arena took place after he left in 1999. Either way, the campaign has responded with a statement criticizing the article [ http://www.politico.com/blogs/burns-haberman/2012/06/romney-campaign-outsourcing-does-not-equal-offshoring-127021.html ] as "fundamentally flawed":
[The] story that does not differentiate between domestic outsourcing versus offshoring nor versus work done overseas to support U.S. exports. Mitt Romney spent 25 years in the real world economy so he understands why jobs come and they go.
However, as Politico notes, the statement does not address one of the article's main points, which is that Bain was directly involved with companies that created jobs outside the United States that could have been done here. Meanwhile, the New York Times has a piece [ http://www.nytimes.com/2012/06/23/us/politics/companies-ills-did-not-harm-romneys-firm.html?pagewanted=all ] (also based on Securities and Exchange Commission filings) detailing a number of instances in which Bain made a profit off of taking over companies that eventually went bankrupt. While some of the companies profiled may have simply been "too troubled to rescue" (or brought down by larger economic or industry trends), there are examples like steel manufacturer GS Industries:
In at least three of the seven bankruptcies, however, companies appear to have been made more vulnerable by debt taken on to return money to Bain and its investors in the form of dividends or share redemptions.
That was arguably the case with GS Industries, a troubled Midwest steel manufacturer that Bain acquired in 1993, investing $8.3 million. The private equity firm took steps to modernize the steelmaker. A year later, the company issued $125 million in debt, some of which was used to pay a $33.9 million dividend to Bain, securities filings show.
The private equity firm plowed an additional $16.2 million into the steelmaker, but when the industry experienced a downturn in the late 1990s, the company could not manage its heavy debt. It filed for bankruptcy in 2001, but Bain’s investors still earned at least $9 million.
Even when Bain investors lost money on a collapsed company, the firm was able to walk away with millions of dollars in advisory and other fees. During bankruptcy proceedings, a lawyer for one such company, Cambridge Industries, which was required to pay fees and penalties to Bain even when it was insolvent, wrote: "We have been unable to identify what, if any, 'reasonably equivalent value' the Company received in exchanges for these exorbitant fees ... It appears, instead, these fees were nothing more than a device used by Bain to provide a return on its equity."
To be sort of fair, this is basically how private equity firms do business. However, that fact isn't going to do much to eliminate the public's discomfort with Romney's old job, as the Democrats are well aware. Just today, pro-Obama PAC Priorities USA put out yet another attack ad
Copyright © 2012, New York Media LLC
http://nymag.com/daily/intel/2012/06/bain-horror-stories-continue-to-haunt-romney.html [with comments]
===
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By Charles P. Pierce
at 10:46AM June 22, 2012
This vast new Washington Post report about how Willard Romney and his money-chewing friends got really wealthy [ http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_story.html (the post to which this is a reply)] by investing in companies dedicated to shipping American jobs overseas is yet one more reason why the Obama campaign really shouldn't have slacked off from tearing into Romney's career at Bain Capital just because Cory Booker, and Ed Rendell, and Bill Clinton got nervous about it. It also should set off another spate of really remarkable lying from the Republican candidate over the next few days.....
While economists debate whether the massive outsourcing of American jobs over the last generation was inevitable, Romney in recent months has lamented the toll it's taken on the U.S. economy. He has repeatedly pledged he would protect American employment by getting tough on China. "They've been able to put American businesses out of business and kill American jobs," he told workers at a Toledo fence factory in February. "If I'm president of the United States, that's going to end."
Willard Romney: friend of the working man. In Shanghai.
(Of course, the Post felt itself obligated to include the now-mandatory non sequitur disclaimer about the magic of the global economy. While the export of jobs has been disruptive for many workers and communities in the United States, outsourcing has been a powerful economic force. It has often helped lower the prices that American consumers pay for products and created a global supply chain that has made U.S. companies more nimble and profitable. Nimbleness! It takes some nifty footwork to tap-dance your way past your conscience [ http://www.pbs.org/moyers/citizensclass/capitol_crimes/abramoff_inc/ ] in the Marianas Islands Free Enterprise Zone.)
American business stopped caring about the political entity that is the United States of America a very long time ago. We have been propagandized repeatedly that the global economy was either the greatest thing that ever happened ever, or so unstoppable a force that the best our tired old democracy could do is get along within it the best it could. The basic questions of national sovereignty and corporate accountability were drowned out or brushed aside. Now, we have a presidential candidate who is a perfect product of that new transnational economic system. Willard Romney could be — hell, should be — the vehicle through whom we pass judgment on all of it.
©2012 Hearst Communications, Inc. (emphasis in original)
http://www.esquire.com/blogs/politics/romney-bain-overseas-jobs-9947349 [with comments]
===
Why Romney's job outsourcing record matters
Mitt Romney opened the door for attacks on Bain Capital's history of outsourcing American jobs.
By Dan Primack
June 22, 2012: 11:41 AM ET
FORTUNE -- Is Mitt Romney an American job creator, or an American job destroyer?
That's the question posed by a 1,632-word piece [ http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_story.html (the post to which this is a reply)] in today's Washington Post, which details how Bain Capital invested in several companies that both directly and indirectly encouraged American jobs to be shipped overseas.
For example, the WaPo delves into Bain's 1993 investment in Corporate Software Inc., a provider of outsourced services like call centers for U.S. technology companies like Microsoft (MSFT):
Initially, CSI employed U.S. workers to provide these services but by the mid-1990s was setting up call centers outside the country.
Two years after Bain invested in the firm, CSI merged with another enterprise to form a new company called Stream International Inc. Stream immediately became active in the growing field of overseas calls centers. Bain was initially a minority shareholder in Stream and was active in running the company, providing "general executive and management services," according to SEC filings.
By 1997, Stream was running three tech-support call centers in Europe and was part of a call center joint venture in Japan, an SEC filing show.
To be sure, there is nothing surprising about a private equity firm being involved in what is now known as "business process outsourcing." It's big business, with Pitchbook reporting that private equity firms have made 333 BPO investments valued at nearly $27 billion since the beginning of 2011 (although not all of them necessarily involve U.S. jobs being lost, as "outsourcing" is sometimes distinct from "offshoring").
Likewise, Romney's Bain Capital makes sense as one of the earlier adopters. Not only because it was one of the earlier private equity firms to exist, but also because of its strong ties to management consulting firm Bain & Company.
Similar lack of shock for WaPo's (fairly lackluster) case that Bain Capital also encouraged its non-BPO portfolio companies to take advantage of outsourcing trends. In fact, one of Romney's former colleagues recently told me: "In the 1980's, private equity made a lot of its money by stripping and flipping. In the 1990's and early 2000's, it was about outsourcing. Since then, it's been about growth." No shame or sense of regret. Just matter-of-fact.
The problem with this history, however, is that it runs counter to Mitt Romney's own narrative. And he only has himself to blame.
On the campaign trail, Romney has a tendency to talk about a job creation record. Specifically, that he helped create 100,000 "net jobs." As we've previously reported [ http://finance.fortune.cnn.com/2011/12/22/why-bain-capital-doesnt-track-lost-jobs/ ], it's a figure that no one, including Romney, can actually calculate. Bain Capital never tracked the number of jobs it created, let alone the number it destroyed or outsourced. Nor did it track any collateral employment damage, such as a mom-and-pop stationary store put out of business by Staples (SPLS).
Had Romney been more honest, he simply would have said that Bain Capital had a singular mission: Make money for its investors. And, if he wanted to make it sound a little less Gordon Gekko, he could have added that many of those investors were nonprofit institutions like universities and charitable foundations. His responsibilities as an elected official, of course, would be different.
But Romney chose to highlight Bain's job creation record, rather than its financial performance. And, by doing so, invited analysis like today's Washington Post story.
It should be interesting to see how the Romney campaign responds, particularly if someone is able to ask the candidate for the number of U.S. jobs that were outsourced by Bain Capital portfolio companies during Romney's tenure. After all, he must have that number if he's so sure about 100,000 jobs being created.
© 2012 Cable News Network. A Time Warner Company
http://finance.fortune.cnn.com/2012/06/22/romney-outsourcing-bain/ [with comments]
===
Axelrod: Mitt Romney Running To Be ‘Outsourcer-In-Chief’
Evan McMorris-Santoro
June 22, 2012, 12:48 PM
After Friday’s Washington Post article [ http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_story.html (the post to which this is a reply)] detailing Bain Capital’s work with outsourcing during the time Mitt Romney was at the helm of the firm, the Obama campaign seems to think its point about Romney has been made.
“People really have a fundamental choice in this election,” Obama campaign strategist David Axelrod said on a conference call with reporters Friday. “The question is, do they want an outsourcer-in-chief in the Oval Office or do they want a president who’s going to fight for American jobs and American manufacturing and the American middle class.”
Romney, of course, is the “outsourcer-in-chief” in that sentence. Despite Romney campaign protestations [ http://www.politico.com/blogs/burns-haberman/2012/06/romney-campaign-outsourcing-does-not-equal-offshoring-127021.html ] that the Post article doesn’t make the distinction between “off-shoring,” in which American firms are replaced by workers in foreign locations, and “outsourcing,” which can often include moving jobs from one domestic firm to another to save costs, the Obama campaign says the story shows a presumptive Republican nominee who made his money helping companies pay American workers less and less.
“For those of us who looked at that story today, there’s a bright line between offshoring American jobs, that’s moving them ouside of this country, and outsourcing them,” Obama surrogate Leo Hindery, partner at a media industry private equity fund, told reporters on the call. “Bain was a company that preponderantly off-shored jobs. And even in those where it outsourced domestically, it did so into lower-cost settings at the expense of workers and their union organizers. “
© 2012 TPM Media LLC
http://2012.talkingpointsmemo.com/2012/06/david-axelrod-mitt-romney-outsourcer-in-chief.php [with comments]
===
Report: Romney talks tough on China, but Bain was key player in outsourcing trend
June 22, 2012 7:44 AM
UPDATED 3:45 p.m. ET
(CBS News) While Mitt Romney campaigns on "getting tough" with China, the firm he founded nearly 30 years ago, Bain Capital, was a key player in the acceleration of the outsourcing trend that has shifted millions of American jobs overseas, the Washington Post reported Friday [ http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_story.html (the post to which this is a reply)], citing its analysis of the financial company's securities filings with the government.
"While Bain was not the largest player in the outsourcing field, the private equity firm was involved early on, at a time when the departure of jobs from the United States was beginning to accelerate and new companies were emerging as handmaidens to this outflow of employment," the newspaper wrote.
The newspaper noted that outsourcing jobs has negative effects on individuals, specific firms and some communities. It has also lowered prices for American consumers and made many U.S. companies more profitable from the global supply chain it has created.
"Bain played several roles in helping these outsourcing companies, such as investing venture capital so they could grow and providing management and strategic business advice as they navigated this rapidly developing field," the newspaper said.
That reality is in sharp contrast to the presumptive Republican presidential nominee's rhetoric in his 2012 bid for the White House.
Speaking to workers at a Toledo fence factory in Ohio earlier this year, Romney said China has "been able to put American businesses out of business and kill American jobs."
"If I'm president of the United States, that's going to end," he said.
The Romney campaign issued a statement denouncing the story.
"This is a fundamentally flawed story that does not differentiate between domestic outsourcing versus offshoring nor versus work done overseas to support U.S. exports," said Andrea Saul, spokeswoman for the Romney campaign, adding that if Romney wins the White House, "he will implement policies that make it easier and more attractive for companies to create jobs here at home."
And President Obama's campaign predictably touted the report as evidence that Romney does not care about average workers, calling it a "breathtaking hypocrisy" in a press release early Friday morning.
"It's particularly egregious coming on a day when Gov. Romney began running an ad in Ohio promising to stand up to China, demanding a level playing field for our businesses and workers, when it turns out his companies were actually involved in shipping jobs to China and India," Obama campaign strategist David Axelrod later told reporters on conference call.
Mr. Obama plans to reference the report in a speech Friday afternoon at a community college in Tampa, Florida.
"Today it was reported in The Washington Post that the companies [Romney's] firm owned were 'pioneers' in the outsourcing of American jobs to places like China and India. Pioneers!" Mr. Obama plans to say, according to his prepared remarks. "Tampa, we don't need an outsourcing pioneer in the Oval Office. We need a president who will fight for American jobs and American manufacturing. And that's what my plan will do."
Additional reporting by Jillian Hughes.
Copyright © 2012 CBS Interactive Inc.
http://www.cbsnews.com/8301-503544_162-57458601-503544/report-romney-talks-tough-on-china-but-bain-was-key-player-in-outsourcing-trend/ [with comments]
===
Bain Capital Horror Stories Continue to Haunt Mitt Romney’s Campaign
Bain, back in the day.
By Caroline Bankoff
June 23, 2012 at 4:08 PM
The double-edged sword that is Mitt Romney's career at Bain Capital will not stop causing image problems for the candidate. This time, it's a pair of articles chronicling the private equity firm's outsourcing of American jobs and methods for draining money out of the failed companies it controlled. The Washington Post has the former story [ http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_story.html (the post to which this is a reply)], which reporters gleaned from Bain's Securities and Exchange Commission filings. While campaigning, Romney has frequently promised to bring jobs currently done by overseas workers back to the United States, but the filings show that Bain began investing in companies that specialized in outsourcing in the early nineties.
Bain’s foray into outsourcing began in 1993 when the private equity firm took a stake in Corporate Software Inc., or CSI, after helping to finance a $93 million buyout of the firm. CSI, which catered to technology companies like Microsoft, provided a range of services including outsourcing of customer support. Initially, CSI employed U.S. workers to provide these services but by the mid-1990s was setting up call centers outside the country.
Two years after Bain invested in the firm, CSI merged with another enterprise to form a new company called Stream International Inc. Stream immediately became active in the growing field of overseas calls centers. Bain was initially a minority shareholder in Stream and was active in running the company, providing “general executive and management services,” according to SEC filings.
By 1997, Stream was running three tech-support call centers in Europe and was part of a call center joint venture in Japan, an SEC filing shows. “The Company believes that the trend toward outsourcing technical support occurring in the U.S. is also occurring in international markets,” the SEC filing said.
The piece goes on to describe four other major outsourcing-related acquisitions and deals made during Romney's tenure at the firm, though it notes that "Bain was not the largest player in the outsourcing field," and that some of their most aggressive expansion in that arena took place after he left in 1999. Either way, the campaign has responded with a statement criticizing the article [ http://www.politico.com/blogs/burns-haberman/2012/06/romney-campaign-outsourcing-does-not-equal-offshoring-127021.html ] as "fundamentally flawed":
[The] story that does not differentiate between domestic outsourcing versus offshoring nor versus work done overseas to support U.S. exports. Mitt Romney spent 25 years in the real world economy so he understands why jobs come and they go.
However, as Politico notes, the statement does not address one of the article's main points, which is that Bain was directly involved with companies that created jobs outside the United States that could have been done here. Meanwhile, the New York Times has a piece [ http://www.nytimes.com/2012/06/23/us/politics/companies-ills-did-not-harm-romneys-firm.html?pagewanted=all ] (also based on Securities and Exchange Commission filings) detailing a number of instances in which Bain made a profit off of taking over companies that eventually went bankrupt. While some of the companies profiled may have simply been "too troubled to rescue" (or brought down by larger economic or industry trends), there are examples like steel manufacturer GS Industries:
In at least three of the seven bankruptcies, however, companies appear to have been made more vulnerable by debt taken on to return money to Bain and its investors in the form of dividends or share redemptions.
That was arguably the case with GS Industries, a troubled Midwest steel manufacturer that Bain acquired in 1993, investing $8.3 million. The private equity firm took steps to modernize the steelmaker. A year later, the company issued $125 million in debt, some of which was used to pay a $33.9 million dividend to Bain, securities filings show.
The private equity firm plowed an additional $16.2 million into the steelmaker, but when the industry experienced a downturn in the late 1990s, the company could not manage its heavy debt. It filed for bankruptcy in 2001, but Bain’s investors still earned at least $9 million.
Even when Bain investors lost money on a collapsed company, the firm was able to walk away with millions of dollars in advisory and other fees. During bankruptcy proceedings, a lawyer for one such company, Cambridge Industries, which was required to pay fees and penalties to Bain even when it was insolvent, wrote: "We have been unable to identify what, if any, 'reasonably equivalent value' the Company received in exchanges for these exorbitant fees ... It appears, instead, these fees were nothing more than a device used by Bain to provide a return on its equity."
To be sort of fair, this is basically how private equity firms do business. However, that fact isn't going to do much to eliminate the public's discomfort with Romney's old job, as the Democrats are well aware. Just today, pro-Obama PAC Priorities USA put out yet another attack ad
[ http://www.youtube.com/watch?v=oLo0Jwj03JU (via http://www.politico.com/blogs/burns-haberman/2012/06/new-antibain-ad-my-own-coffin-127072.html )] featuring former employees [ http://nymag.com/daily/intel/2012/05/new-obama-ad-mitt-romney-bain-job-killers.html ] of a company taken over by Bain. In this installment, a laid-off worker recalls being told to assemble a 30-foot stage, purpose unknown, outside his plant. As it turns out, the structure was assembled so Bain executives would have something to stand on when they announced they were shutting the place down.
Copyright © 2012, New York Media LLC
http://nymag.com/daily/intel/2012/06/bain-horror-stories-continue-to-haunt-romney.html [with comments]
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Greensburg, KS - 5/4/07
"Eternal vigilance is the price of Liberty."
from John Philpot Curran, Speech
upon the Right of Election, 1790
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