DAVID CORN EXCLUSIVE: Romney Invested Millions in Chinese Firm That Profited on US Outsourcing

[FourScore]

EXCLUSIVE: Romney Invested Millions in Chinese Firm That Profited on US Outsourcing
The GOP candidate decries China poaching US jobs. But at Bain he held a large stake in a Chinese company that did just that.
—By David Corn
Wed Jul. 11, 2012 8:10 PM PDT

Last month, Mitt Romney's campaign got into a dustup with the Washington Post after the newspaper reported that Bain Capital, the private equity firm the GOP presidential candidate founded, invested in several US companies that outsourced jobs to China and India. The campaign indignantly demanded a retraction, claiming that these businesses did not send jobs overseas while Romney was running Bain, and the Post stood by its investigation. Yet there is another aspect to the Romney-as-outsourcer controversy. According to government documents reviewed by Mother Jones, Romney, when he was in charge of Bain, invested heavily in a Chinese manufacturing company that depended on US outsourcing for its profits—and that explicitly stated that such outsourcing was crucial to its success.

This previously unreported deal runs counter to Romney's tough talk on the campaign trail regarding China. "We will not let China continue to steal jobs from the United States of America," Romney declared in February. But with this investment, Romney sought to make money off a foreign company that banked on American firms outsourcing manufacturing overseas...

SNIP

...At the time Romney was acquiring shares in Global-Tech, the firm publicly acknowledged that its strategy was to profit from prominent US companies outsourcing production abroad. On September 4, 1998, Global-Tech issued a press release announcing it was postponing completion of a $30 million expansion of its Dongguan facility because Sunbeam, a prominent American consumer products company and a major client of Global-Tech, was cutting back on outsourcing as part of an overall consolidation. But John C.K. Sham, Global-Tech's president and CEO, said, "Although it appears that customers such as Sunbeam are not outsourcing their manufacturing as quickly as we had anticipated, we still believe that the long-term trend toward outsourcing will continue." Global-Tech, which in mid-1998 announced fiscal year sales of $118.3 million (an increase of 89 percent over the previous year), also manufactured household appliances for Hamilton Beach, Mr. Coffee, Proctor-Silex, Revlon, and Vidal Sassoon, and its chief exec was hoping for more outsourcing from these and other American firms.

The Romney campaign and Bain Capital have insisted that Romney departed Bain in February 1999 to head the troubled 2002 Winter Olympics in Salt Lake City and had no involvement in the private equity firm's deals after that point—a contention that has been challenged by the Obama campaign. But the Global-Tech Appliances transactions occurred long before Romney jetted off to Utah.
At the time Romney was acquiring shares in Global-Tech, the firm publicly acknowledged that its strategy was to profit from prominent US companies outsourcing production abroad.

SNIP

...Sankaty is a story in itself. It was recently the focus of an Associated Press investigation that reported that Sankaty "is among several Romney holdings that have not been fully disclosed" and that there is a "mystery surrounding" Sankaty. Reporting on this Romney entity, Vanity Fair noted that "investments in tax havens such as Bermuda raise many questions, because they are in 'jurisdictions where there is virtually no tax and virtually no compliance,' as one Miami-based offshore lawyer put it." With Sankaty, Romney was using a mysterious Bermuda-based entity to invest in a Chinese firm that thrived on US outsourcing...

http://www.motherjones.com/politics/2012/07/bain-capital-mitt-romney-outsourcing-china-global-tech

[reformist2]

1. Closing factories and moving them to China - the easiest and sleaziest way to make money.

And Mitt Romney was right there in the thick of it. This is a fact everyone in the country should know.

[Lex]

3. And THEN investing in the Chinese firm.

Nice tidy little circle of screwing America.

[CatWoman]

2. David Corn coming up on Lawrence O'Donnell to discuss this

[lovuian]

4. He is a sleazy and AntiAmerican as they come

Romney is so bad

[fascisthunter]

5. unscrupulous piece of shit

that is what he and the GOP as a whole represent.

[Lex]

7. Filling their pockets is always more important than being an American

who cares about this country and its resources, people, or well-being.

[fascisthunter]

9. all their flag waving is for fools

[myrna minx]

6. K&R n/t

[senseandsensibility]

8. Very important story

Kick

[Nancy Waterman]

10. This completely dispels the myth of the "job creators"

This is what happens to all that extra money the rich have sloshing around. Tax cuts DO NOT encourage them to become job creators, at least not in the US. Maybe in China or India or elsewhere. I hope the Dems start making this connection, since it is the GOP justification for tax cuts for the rich.