Tuesday, October 16, 2012
Mitt Romney & Bain: Profits over people
When Mitt Willard Romney commented that he do could nothing about 47 percent of the American people because they were slackers and takers, he did not misspeak. His words were not taken out of context. When people believe they are not being recorded they often speak their minds. What Mr. Romney said was exactly what he intended to say and what he said was what he meant and what he believes. The media has failed miserably to deal with Romney's tour of duty at Bain Capital. This is an egregious error as Romney's tenure at Bain provides confirmation of Romney's beliefs and gives us a detailed perspective as to what kind of person he is - his core beliefs.
Gary Cohn is a Pulitzer Prize winning investigative journalist. Most recently he's been engaged in writing a series of articles for Mesothelioma.com. His latest article, "A Promise Not Kept: Profits Over People," appeared yesterday on that website.
It begins thusly:
A Promise Not Kept
John Cottrell had health problems, but in his heart he believed he was covered. After all, GS Industries, the Kansas City steel company where he had worked for 30 years had guaranteed his health insurance and pensions in the event of a shutdown. John retired in poor health from asbestos-related respiratory problems in 2000, but he and his wife Shirley felt secure knowing that their most critical employee benefits were guaranteed for life.
Then everything changed. Bain Capital, the private equity firm which gained control of GS Industries in 1993, declared bankruptcy for the mill in 2007, and quickly shut down the plant. A few months later, Bain dropped another hammer on the workforce: it was reneging on its promise to cover the lifetime worker benefits. Suddenly, the Cottrell's future was very much in doubt.
"He thought these things couldn't be touched. He and the other workers trusted the company's promises." -- Shirley Cottrell
These are the personal stories of Coltrell and other GS Industry workers and how their peace of mind and medical safety net were ripped apart. It will portray the suffering on an individual level, and show the damage done when people's futures are controlled by a company that bases life-changing decisions primarily on financial considerations, regardless of the promises it made and the healthcare repercussions suffered by its workforce.
[...] Bain merged Worldwide [Grinding Systems] with a steel mill in South Carolina, and renamed the new company GS Industries (GSI). In 1997, it endured a nasty 10-week worker strike that was motivated by the union's skepticism that, if there was a shutdown, GSI had not earmarked sufficient reserves to cover its benefit and pension commitments.
Ultimately, a settlement was reached that increased employee pensions and guaranteed that employees would continue to receive health and life insurance, even if the plant closed down.
Which it did. In 2001, just one year after Coltrell retired with guaranteed lifetime benefits, Bain elected to put GSI into bankruptcy and close down the plant, along with its 750 jobs. The private equity firm then announced it would no longer honor its recent promise to cover employee healthcare and pension benefits if the plant closed.
Bain's decision under Romney is ironic, considering the candidate's recently released statement where he classified 47% of Americans as freeloaders who refuse to "take personal responsibility." The sole reason that GSI's workers did not lose their entire pension was because the mill's Bain-backed management applied for, and received, a bailout from the U.S. Pension Benefit Guarantee Corp. This federal handout came to $44 million; a sum that covered only the non-supplemental portion of the workers' "guaranteed" pensions.
Complicating matters is the fact that a number of workers contracted lung problems, including asbestosis, which "is a degenerative respiratory condition that often manifests as a pre-cursor to mesothelioma, an aggressive occupational-related cancer that develops in the lining of the lungs and abdominal cavity. There is no known cure for mesothelioma."
There is much more in Mr. Cohn's article with regard to the suffering of GSI's employees and the company's rejection of responsibiity for that suffering. And Mr. Romney's culpability is palpable.
"Romney ran Bain until 1999, when he left to run the Salt Lake City Olympics. He was in a position of oversee the majority of operational and financial changes the private equity firm made for GS Industries before Bain put it into bankruptcy in 2001. Despite his departure, Romney still maintained a significant financial stake in Bain, and continued to collect dividends from Bain afterwards."
From other sources, I understand that Romney did very well under Bain's vulture-like financial attacks; he personally profited to the tune of $20,000 for every employee who was fired or otherwise put out of work. Please read Mr. Cohn's complete article here. And then ask yourself if Romney is the kind of person you want in charge of the well-being of the citizens of the United States of America.
Posted by Lowell at 3:13 PM