OBAMA MYTH: Destroying companies

Team Romney | June 12, 2012 Updated for blog commentary 4am, 7/24/2012
REALITY: Governor Romney’s private sector record is one of success and turnaround, despite many investments in companies that were failing at the time.
Eighty percent of the companies Bain Capital has invested in from its founding to today have grown revenues.  When companies grow, they are able to hire more workers and our economy grows.  
Bain Capital pursued an investment strategy that often included targeting companies in decline and trying to turn them around.  In most cases, it held the companies for many years and invested a significant amount of human and financial capital into improving operations to help revive these struggling companies.
When President Obama attacks Governor Romney’s record in the private sector, he’s also attacking our country’s greatest engine for job creation: the free enterprise system.

OBAMA MYTH: Rich businessmen profited most from the firm’s investments.

REALITY: The major investment beneficiaries of Mitt Romney’s work in private equity – and private equity in general – are the investors in the fund.  
The investors include pension funds, charities, and universities. In fact, over half the money invested in private equity is from pension funds and charitable foundations alone.  The success of private equity investments helps provide secure retirements for seniors, allows charities to serve their communities, and provides universities with the resources they need to educate our youth.
In addition, state and local governments depend on higher returns from private equity investments to fund employee retirements without cutting into operating budgets.  When investments don’t perform, state and local governments must offset gaps in investment returns by using tax dollars otherwise spent on local programs.  In California, for example, one study has shown that a 0.25% decrease in investment returns could cost local municipalities and school districts $300 million per year.  That’s $300 million less being spent on vital local programs.
When private equity succeeds, it is not just companies that thrive -- it is retirees, charities, local communities, and universities that benefit the most.

OBAMA MYTH: Bankrupting a successful steel mill in Kansas City, MO.

REALITY: The GS Technologies plant that Barack Obama has used to attack Mitt Romney was scheduled to be closed if Romney and his colleagues hadn’t bought the plant and tried to help turn it around.
In 1993, GS Technologies, a company Bain Capital had invested in, purchased a struggling Kansas City steel plant from Armco. Prior to this investment, Armco announced plans to close the Kansas City plant if a buyer could not be found.
This investment – and $170 million in upgrades – kept the Kansas City plant competitive in a tough international market and saved the steel workers’ jobs for eight years.
Two years after Mitt Romney left Bain Capital, the GS Technologies plant was closed because of foreign steel dumping into the U.S. market. Thirty-one other steel companies declared bankruptcy during the same period.
During his three and a half years in office, President Obama has consistently failed to take the steps necessary to protect American manufacturing from unfairly-subsidized Chinese imports.  On day one, President Romney will designate China a currency manipulator and take the steps necessary to make American manufacturing competitive again.

OBAMA MYTH: Shutting down a successful paper plant in Marion, IN.

REALITY: The paper plant in Marion, IN was losing money when Ampad bought it to try to turn it around.
In 1992, Bain Capital invested in American Paper; Pad, or Ampad.  Two years later – while Governor Romney was on a leave of absence to run for U.S. Senate against the late Ted Kennedy – Ampad purchased the assets of an unprofitable plant in Marion, Indiana from Smith Corona.
This was not a healthy plant: In the year preceding Ampad’s purchase, the Marion plant lost more than $1.6 million dollars. 
Though the Marion plant would later close, Ampad added nearly 2,500 jobs at other plants between Bain Capital’s initial investment and the sale of its majority interest.  During this same period, revenues grew dramatically from $8.8 million to more than $580 million.

OBAMA MYTH: A “Corporate Raider”

FACT:  Even President Obama’s supporters acknowledge this isn’t true. Steve Rattner, President Obama’s former car czar, said that Governor Romney was the “furthest thing” from a corporate raider. Governor Deval Patrick rejected the characterization of Bain Capital as a raider and said that Bain was a “perfectly fine company” with “a role in the private economy.” The truth is that Governor Romney wasn’t tearing down companies; he was building up strong companies like Staples, Sports Authority, Steel Dynamics, and Bright Horizons. This accusation is yet another failed attempt to smear Governor Romney’s “sterling” private sector record, and even President Obama’s supporters reject it.

[analysts at CNBC, Bloomberg and Charlie Gasparino, senior analyst at Fox Business after leaving Newsweek and, later,  CNBC --  currently contributes to the NYPost, The Daily Beast, Forbes and the Huffington Post -- nearly break out in laughter at the suggestion that Bain Capital is anything other than the highest rated,  most solid equity firm in the nation. In going after a Romney strength,  Obama has "picked on" one of the giants in the equities world and his strategy has failed.  Insiders tell the media that Obama is moving away from this line of attack and focusing on "Romney, the tax cheat"   ---   blog editor]   

OBAMA MYTH: Shipping Jobs Overseas

FACT: Under Governor Romney’s leadership, Bain Capital invested in over 100 companies. Of those, President Obama’s campaign has accused three of shipping jobs overseas. In two of these cases, the accusations are related to events that occurred in 2000 and 2001, well after Governor Romney left Bain Capital in February 1999 to lead the Winter Olympics. In the third case, the share of domestic production actually increased, not decreased, during the time the Obama campaign points to. This attack is merely an attempt to distract voters from President Obama’s failed economic record and his refusal to stand up to China’s unfair trade practices.

OBAMA MYTH: Closing Stores And Laying Off Employees

FACT: Under Bain Capital’s ownership, Stage Stores doubled the number of employees and doubled the number of stores. During this time, Stage Stores added locations in Ohio, Michigan, Wisconsin, and Iowa. Bain Capital sold its controlling interest in the company in 1997. Years later, Stage Stores filed for bankruptcy, but today it is a healthy business with 14,000 employees and hundreds of new stores nationwide.