Corporate Raider and Outsourcer?President Barack Obama and his allies have attempted to turn Mitt Romney into one of the villains from a Captain Planet cartoon (or any typical Hollywood movie.) The first charge i that Romney is a "corporate raider" who set out to purchase businesses with the sole purpose of taking all of the companies assets and firing their employees in order to turn a profit. (One of those businesses, AMPAD, will be discussed later). The second charge, that Romney was a "pioneer in outsourcing", has been regularly dismissed by non-partisan fact-checking organizations. Even if their arguments were true, the number of companies they claim that Romney either "raided" or outsourced jobs with numbered in the single-digits out of hundreds of companies.
The True Purpose of Bain CapitalThe purpose of Bain Capital, like almost any other capital investment firm, is to make money through successful business ventures. While Romney was at Bain, they did this in two main ways. The first business model was to invest in start-up companies and it's hard to drive through a city today without passing a start-up business involved with Romney in one way or another. (Clearly, the "corporate raider" argument falls flat because this required pouring millions of dollars into a company that did not yet exist.) The other method went to buying a stake in companies that were either heading towards bankruptcy or had potential to be even better than they currently were. Romney's goal was to make inefficient business operations efficient and profitable. Not all of these ventures were successful, s business just couldn't be saved while some failed due to the changing times. (Imagine taking over a thriving beeper business in the mid 1990s just before cell phone use became a regular thing).
Highlights of Romney's Tenure
So, did Romney create over 100,000 jobs while at Bain Capital? Was his business model to create successfull businesses or to be the evil villain who shuts them down? Below is a brief overview of Romney's top business ventures and whether they were successful or not and how many employees the company has today.
Staples Inc. today has over 90,000 employees in over 1,500 locations in the United States and another 700 locations throughout the world. Staples is headquartered in Farmington MA and was initially funded by a $4.5 Million investment by Mitt Romney’s Bain Capital in 1986. when he liked the concept of a box store for office supplies.
The Sports Authority was started by Romney's Bain Capital and a handful of other venture capital firms in 1987 and was the first company to create a warehouse-style shopping store for sports enthusiasts. After a successful start, The Sports Authority was sold to Kmart in 1990 and they merged their own sporting chain stores into the Sports Authority model. Today, the company has over 450 locations and 7,000 employees.
Totes-Istoner came into existence when Bain Capital purchased and merged two companies together. Headquartered in Cincinnati, Ohio, umbrella-maker Totes was acquired by Bain in 1994. Isotoner, a leather glove producer, was purchased a few years later and Bain saw the overlap and potential of merging the two businesses. The results was Totes-Isotoner, formed in 1997, and which is today the world's largest weather accessory company and they make umbrellas, gloves, and rain shoes. They have more than 1,000 employees worldwide.
AMPAD is one of the businesses Romney is accused of "raiding." But is it true?. Ampad was acquired by Bain from MEAD Corporation in 1992, as the company did not know how to run it properly and merge it with their other businesses. far from raiding the newly purchased AMPAD company, they actually enjoyed a 500% sales increase from 1992 through 1996. AMPAD - a manufacturer of paper products - began to see sales fall dramatically, however, as the internet boom started making its impact on the writing world. Not surprisingly, the world of e-mail and online expediency made the paper and stationary industry a tough sell. Eventually, the company filed for bankruptcy in 2001, more than 2 years after Romney left his management position there. The claims that AMPAD was purchased solely to take money and shut it down is disproved by the fact that the company saw several years of major sales growth after the Bain purchase, culminating in a listing on the NYSE, and eventually shuttered after almost a decade of operation.
Seally Mattresses was acquired by Bain in 1997. Nope, it wasn’t “shut down” by Mitt Romney and today it has expanded to over 4,500 employees. Bain sold the company in 2005 and it is headquartered in Trinity, North Carolina.
Dominoes Pizza was Acquired by Bain in 1998. The business was expanded over the years and went public in 2005. Today, the company has over 9000 locations (company owned and franchises) and employs more than 140,000 people.
Steel Dynamics is located in Fort Wayne, Indiana. The company was founded in 1993, and Mitt Romney and Bain Capital began heavily investing a year later after seeing the potential for growth and success. Steel Dynamics is of the top steel producers today, has a multi-billion dollar company revenue, and employs over 6,300 people.
Brookstone was taken over by Bain, the home gadget retailer, in 1991 and they worked to change the way the company did business. Under Bain, they began offering their products through a multi-pronged business model that used traditional stores, kiosks to sell products, and eventually the internet. Today, Brookstone has over 300 stores and continues to exist in a market where most of their competitors have failed.
The purpose of Bain Capital, which is in itself a wildly successful company started by Mitt Romney, was to grow businesses and grow profits. Some of the companies were started from scratch, some were already small start-ups, and some were larger struggling businesses. The goal was always to make those companies succeed. While it didn't always work out, it's clear that a lot of it did. While his record will be cherry-picked, and the operations of a small handful of business will be politicized, the reality is that the number of pure successes dwarfs and other distortions about his record.
Today, Bain Capital is a wildly successful business that supports, manages, and owns dozens and dozens of companies. Unfortunately, they also have to deal with their name being dragged through the mud for political gain. Bain Capital continues to do good work today, over a decade after Mitt Romney left the business operations. Romney's business experience should be a net positive for him as it shows his desire for business efficiency and success, and how he would translate that into helping fix the economy.