Bain got its money back quickly. There would be logic in them saving some cash for a downturn. In Bain merged GS with another wire rod maker in Georgetown, South Carolina, to form one of the largest mini-mill steel producers in the U. The new company, dubbed GS Industries Inc. Already, though, there were warning signs that the company was not on a sustainable course.
Regelbrugge said he was concerned that the company would have to go through a painful restructuring if it had not sold shares through an initial public offering IPO by then. Regelbrugge had done one restructuring in the s at the South Carolina mill, laying off workers and haggling with creditors. He did not want to go through that painful process again. Meanwhile, managers struggled to forge a cohesive whole from two companies that made similar products but had different corporate cultures, different manufacturing processes and different labor contracts.
David Foster, the negotiator for the union, said labor talks were typically more tense at companies owned by private equity firms because the high level of debt left managers with less flexibility. Contract talks foundered and the union went on strike in April The first standoff since quickly turned nasty.
Workers shot bottle rockets at security guards, tossed nails in the roadways to flatten the tires of nonunion trucks and pounded on the windows of vehicles as they left the plant. After 10 weeks, the two sides reached a deal that boosted pensions and ensured that workers would get health and life insurance in the event of a shutdown.
A company insider said the suitor was the global behemoth Mittal Steel Company, but added that no formal offer was ever made. As GS Industries sought to cut costs, it hired line managers with no experience in the steel industry, workers said.
One had worked at Walmart; many others came straight out of the military. Paperwork proliferated. Cost-cutting efforts backfired. Managers skimped on purchases of everything from earplugs to spare motors and scaled back routine maintenance. They can sell off non-core assets, extract generous management fees, and pay themselves special dividends financed by debt issues.
Romney and Bain Capital did all of these things. Can you give me an example in which Bain Capital made a lot of money from a company that failed? Some of this money was subsequently reinvested in the company. In it sought a federal loan guarantee, and in it entered bankruptcy protection. More than seven hundred workers lost their jobs, health insurance, and some of their retirement benefits.
Even while G. The Reuters story about G. Our focus remains on building great companies and improving their operations. What about all those jobs Romney says he created? Is he right when he says the firms Bain Capital invested in have added about , jobs to the economy? But other companies associated with Bain Capital, such as the retail chain KB Toys, the media company Clear Channel Communications, and DDi Corp, a maker of circuit boards, eliminated thousands of positions. Romney says the , figure is a net one, meaning it is the number of jobs created minus the number of jobs eliminated.
But there are two potential problems with it. Should Romney be taking credit for jobs created after he left Bain? Since opening its first store in Brighton, Massachusetts, in , the retailer has expanded worldwide. At the end of , it employed 90, people, most of whom are sales associates. Romney certainly deserves credit for investing in Staples. The Boston Globe story and other accounts have made clear that he believed in the concept of an office superstore when many doubted it, agreeing to back the entrepreneur who founded Staples, Thomas Sternberg.
But how many of the Staples jobs should be counted in the overall calculation? For one thing, many of them are abroad. It was a startup. Newswire Powered by. Close the menu. Rolling Stone. Log In. To help keep your account secure, please log-in again.
You are no longer onsite at your organization. Please log in. For assistance, contact your corporate administrator. Arrow Created with Sketch. Calendar Created with Sketch. Romney says his Bain tenure shows he knows how to build businesses. Amid anecdotal evidence on both sides, the full record has largely escaped a close look, because so many transactions are involved.
The Wall Street Journal, aiming for a comprehensive assessment, examined 77 businesses Bain invested in while Mr. Romney led the firm from its start until early , to see how they fared during Bain's involvement and shortly afterward. You may change your billing preferences at any time in the Customer Center or call Customer Service.
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