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Thursday, 26 July 2012 05:14

Mitt Romney Turns a Deaf Ear to Pleas of Illinois Workers Whose Jobs Are Being Outsourced to China by Bain

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MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

More than 170 workers in Freeport, Illinois, are about to lose their jobs, outsourced to China by the majority shareholder in their company: Bain Capital. Sensata is the name of the firm, and the soon to be former employees sent a direct appeal to Mitt Romney to get his former colleagues to keep their plant in the United States, according to the Associated Press:

Since early 2011, Cheryl Randecker and her co-workers have known their jobs making electronic sensors at a factory in Freeport, Ill., would be lost to China. Some even were asked to train their replacements, who were flown in from overseas.

But with the presidential election campaign in full swing, workers at the Sensata Technologies plant came up with a novel idea, a Hail Mary pass to save their jobs: Ask Mitt Romney for help.

Sensata is owned by Bain Capital, the private equity investment firm that the Republican presidential candidate once led and that has been the subject of a campaign debate about jobs and outsourcing. Romney had long since left his leadership position at Bain when Sensata bought the plant in 2010, but the Freeport City Council recently passed a unanimous 8-0 resolution calling on him to come visit and help keep the jobs in town. The workers have written him directly.

Of course, Romney hasn't responded, and he would likely use his current excuse for the outsourcing that occurred when he was CEO, president, and sole stockholder from 1999-2002: he wasn't around when it happened. Of course, that is belied, as BuzzFlash has pointed out, by Bain's investment, as early as the beginning of the 1990s, in firms that facilitate outsourcing.

The governor of Illinois, Pat Quinn (D), is visiting Freeport today to show his solidarity with the Sensata workers about to lose their jobs.

There is little hope for the workers and Romney -- who is campaigning as a job creator -- will not likely ever respond to their plea. But the real question to Romney is what would he do if he were still the owner and CEO of Bain Capital? Would he take less profit and save the US jobs in Freeport, or would he make the decision that would increase his own quarter billion dollar in assets?

Romney's entire history at Bain indicates that he would send the jobs overeas and pocket the profit from the difference in labor costs. It's really that simple.

Some reporter should hammer him with the question about what he would do about these jobs, where US workers are being forced to train their replacements in China before being axed. But Romney would likely avoid answering by saying he has nothing to do with Bain anymore, when he is the person who made the ruthless profiteering of outsourcing and closing plants a central part of the Bain Capital financial juggernaut.

Reuters just published an article discussing how a Bain managing director details how the Sensata acquisition is an excellent example of the Bain strategic playbook:

Sensata Technologies Holding NV recently became a flashpoint in Mitt Romney's presidential campaign, after workers at an Illinois factory appealed to the former Bain Capital executive to prevent the closing of their plant and the transfer of work to China.

From Bain Capital's point of view, however, the maker of automotive sensors has been a huge success, quadrupling the firm's investment since it acquired the business from Texas Instruments in 2006. Seth Meisel, a managing director at the Boston-based buyout shop, discussed the company at an industry conference last month, using it as a central example of the way Bain Capital can profit from its investments despite troubles in the macro economy, through what Meisel described as "second-order effects...."

Bain Capital took Sensata public through an IPO in March 2010. The firm's $770 million investment is now valued at $3.2 billion, including more than $1 billion in realized value. Bain Capital still owned 51 percent of the company at the end of 2011, a regulatory filing showed.

Bain doesn't subscribe to a goal of creating jobs in America; it is built on a model that relies heavily on maximizing profit by minimizing labor expense - and that means moving jobs overseas.

Indeed, Reuters quotes Meisel, the proud Bain managing director, as bragging, "What I'm doing every day looking for themes and investment opportunities against those [economic downturn] themes so even if the macro rains I hope to be smiling; and I hope we'll all be smiling."

But the workers, such as the ones in Freeport, Illinois, who played by the rules and put in a day's work for a humble day's pay are not smiling. They are scared to death about how they are going to pay their bills and survive because of Bain.

This is Mitt Romney's legacy and vision for America.