Bloomberg Businessweek
Go To Businessweek.com
During the past 20 years, the author has watch China move from being a developing country into an industrial superpower
Money Moves, 5/24: Chocomize Co-Founder Fabian Kaempfer talks with Bloomberg’s Deirdre Bolton about the business of customizing chocolate
The president's campaign has a new rule—no cell phones allowed
In honor of remote control inventor Eugene Polley, we recognize other influential but neglected inventors who have felt the sting of stolen glory
Forget Adderall. Traders now pop chia seeds to stay focused and energized
The Italian automaker and others are adding hybrid technology to elite cars
The storied bridge that links San Francisco and Marin County changed the face of California
Schools cultivate ties with startups before they're big successes
Dave McClure's traveling venture capital show scours the world for promising startups
Romney in 1993 Justine Schiavo/The Boston Globe/Getty Images
If there’s one thing Mitt Romney wants you to remember as he campaigns for President, it’s that he’s all about putting people to work. “You’d have a President who has spent his life in business—small business, big business—and who knows something about how jobs are created,” the Republican candidate recently told voters in Florida. Romney spokeswoman Andrea Saul says the candidate’s business experience means he is better equipped than his rivals or President Barack Obama to “focus on job creation.”
What Romney doesn’t mention in his speeches is that he also knows a thing or two about eliminating jobs. Romney made his fortune sitting atop Bain Capital, a Boston private equity firm he co-founded in 1984 and ran until 1999. With cash from wealthy investors, Romney bought and sold companies at a rapid clip, sometimes helping to build them up and creating hundreds or thousands of jobs, sometimes taking them apart and sending employees packing. Whether the businesses boomed or filed for bankruptcy under his watch, Romney and his investors often came out ahead.
Private equity firms, of course, concentrate on returns, not head count. And Romney was great at it. On his most recent disclosure forms, from 2007, he listed his personal fortune at as much as $250 million. But if the story of his years at Bain is one of business success, it’s not one that fits easily with his efforts to market himself as a candidate who spent his career looking out for the little guy.
Romney is aware of this. In the past, political opponents have attacked him for business transactions in which he made money while employees lost jobs—and his current rivals for the White House are already preparing to do so again. That’s left Romney in the awkward position of trumpeting his business experience while shying away from it at the same time. His campaign refused to provide details about his Bain deals, and Romney declined to be interviewed for this article. In a statement, Bain Capital said the firm’s record “will undoubtedly” be distorted in the political debate. “We are proud of the role that our people-intensive, analytical approach has played in growing companies and delivering superior investment returns.”
Romney’s campaign points to a few prominent investments that he oversaw. “Bain Capital helped to launch or rebuild hundreds of companies, including household names such as Staples, Domino’s Pizza, and the Sports Authority,” his website says. Other Bain deals don’t find their way into Romney’s campaign literature. In 1994, Bain, together with Goldman Sachs, bought Dade International, a medical diagnostics company in Deerfield, Ill. Michael Rumbin, who was a vice-president of technology at Dade, says he was told to cut half of his division’s research projects, eliminating those that had little chance of success and letting go people who worked on them. It had to be done, but it was a “relatively traumatic experience” for workers, he says. Dade was combined with other companies, got a new name, Dade Behring, and became one of the largest makers of diagnostic tests. Job cuts followed each acquisition as unnecessary plants were closed and redundant positions eliminated. At least 1,600 employees were dismissed from 1996 to 1999, according to Securities and Exchange Commission reports. Scott Garrett, who was Dade’s chief executive officer from 1994 to 1997, says the downsizing was a normal part of companies merging. “It’s very unfair to suggest that Mitt Romney was anything but a very good businessperson,” he says.
