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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsHow Romney’s Firm Drove Steel Plant Into Bankruptcy, But Still Profited Thanks To Federal Bailout
By Travis Waldron on Jan 6, 2012 at 10:56 am
A Missouri steel company in which former Massachusetts Gov. Mitt Romneys (R) Bain Capital was the majority shareholder went bankrupt, laid off more than 750 workers, and had to turn to the federal government for a bailout of its pension funds in 2001, according to a special report from Reuters.
Romney, whose time as CEO of Bain Capital has been a centerpiece of his campaign, as he has criticized President Obama for not having experience in the real economy, opposed both the 2008 bank bailouts under President George W. Bush and Obamas rescue of the auto industry. But when Kansas Citys Worldwide Grinding Systems went belly-up less than a decade after Bain became its majority stakeholder, the company, which had been in operation since 1888, had to turn to a federal insurance agency to bailout its pension program in large part because Bain had saddled it with such a heavy debt load:
http://www.reuters.com/article/2012/01/06/us-campaign-romney-bailout-idUSTRE8050LL20120106
Less than a decade later, the mill was padlocked and some 750 people lost their jobs. Workers were denied the severance pay and health insurance theyd been promised, and their pension benefits were cut by as much as $400 (258 pounds) a month.
Whats more, a federal government insurance agency had to pony up $44 million to bail out the companys underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees.
While Romneys firm benefited from a federal bailout, he has been a vocal critic of such bailouts while on the campaign trail. At different times, Romney both supported and derided the federal bank bailouts, but he most recently referred to the Troubled Asset Relief Program as a slush fund that should be shut down. When Obama proposed bailing out the auto industry in 2009, a rescue that was ultimately successful, Romney famously criticized the plan in a New York Times editorial titled, Let Detroit Go Bankrupt.
And while Bain drove Worldwide Grinding Systems into bankruptcy, it didnt share in the misery. According to Reuters, Bain made at least $12 million from the invesment, and added another $9,000 a year from the company via management consulting fees. Meanwhile, by 1995, the company was carrying debt that amounted to 10 times more than its annual operating income. Six years later, it was bankrupt. Romney cost me lots and lots of sleepless nights and lots and lots of money, Ed Stanger, who worked at the plant for more than 30 years, told Reuters.
Read more: http://thinkprogress.org/economy/2012/01/06/399117/romney-bain-federal-bailout/
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How Romney’s Firm Drove Steel Plant Into Bankruptcy, But Still Profited Thanks To Federal Bailout (Original Post)
Cali_Democrat
Jan 2012
OP
Angry Dragon
(36,693 posts)1. Willard is a evil selfish man
you do not want this man behind you for he will stab you in the back and lift your wallet telling you he is just lightening your load
alcibiades_mystery
(36,437 posts)2. Blue Horseshoe loves Endicott steel
Repeat: Blue Horseshoe loves Endicott Steel.
bleever
(20,616 posts)3. Such a strange blend of mendacity and cluelessness.
The perfect GOP candidate.