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Throughout this presidential election cycle, we’ve heard attacks on the business practices of Bain Capital, the private equity firm co-founded by Mitt Romney in 1984. Most recently, a political action committee that supports the re-election of President Obama released an ad featuring Joe Soptic, a former steelworker who lost his job, and hence health insurance for himself and his family, after the closing of the Bain-owned plant where he worked. Soptic’s wife subsequently died of cancer; in the ad, he blames Bain and Romney for the fact that she didn’t get care in time to detect and treat her disease.
“I don’t know how long she was sick,” Soptic says, “and I think maybe she didn’t say anything because she knew that we couldn’t afford the insurance.”
The ad’s veracity has been questioned (and defended), but evidence of Bain’s deleterious impact on workers continues to surface.
In the most recent news in that vein, The Guardian reports that Bain has for months been dismantling and shipping to China, “piece by piece,” a car parts plant, of which it is majority owner, in Freeport, Ill. — even as it requires the workers to train personally their Chinese replacements, who have been flown in by management.
“It’s not easy to get up in the morning, training them to do your job so that you can be made unemployed,” Bonnie Borman told the paper. Borman, 52, has worked at the Sensata auto sensors plant for 23 years. She has three children and predicts that soon, “I am going to be competing for minimum wage jobs with my own daughter.”
Although Romney left Bain around the turn of the century — pinpointing the exact year is difficult, which has itself become a source of controversy — he maintains financial ties to the company, receiving millions of dollars annually in profits from buyout and investment funds. Which means that Romney stands to gain if Bain’s plan to cut costs at Sensata by eliminating U.S. jobs succeeds in increasing profitability.
Needless to say, such an arrangement strikes the company’s current employees as deeply unjust. “I understand business needs to make a profit,” Tom Gualrapp told The Guardian. “But this product has always made a ton of money. it’s just that they think it is not enough money. They are greedy.” Gaulrapp, 54, is a 33 year veteran of the plant, and says that homelessness “is a real possibility” in his near future.
Bain has already quadrupled its initial 2006 investment in Sensata, The Guardian says. The closing of the Freeport plant will cost the city 170 well-paying jobs, further damaging an already enfeebled economy. The process of transferring the machinery to China will be complete by the end of the year.
Still, the workers are keeping up the fight to save their livelihoods. Having already hand-delivered a letter asking for Romney’s support to campaign headquarters in Madison, Wis., they’re now planning to protest at the Republican National Convention, to be held in Tampa, Fla., at the end of the month.
Attacks on Bain Capital have been controversial: Democrats including Newark Mayor Corey Booker, Massachusetts Gov. Deval Patrick, and former President Bill Clinton have expressed their discomfort with the way the Obama campaign has impugned the morality of the private equity business.
But the critiques are starting to gather momentum as the human toll of Bain’s business practices becomes increasingly obvious: Writing about the deal that left Joe Soptic embittered and bereft, Bloomberg’s William D. Cohan (no socialist; a former investment banker, in fact) asks, “Is there any fairness in a system where a group of people can borrow a bunch of money to buy a company and pay themselves millions of dollars in dividends and fees, while the company itself ends up bankrupt and its employees lose their jobs, health insurance and pensions?”