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View Diary: Laid Off by Bain—My Story (143 comments)

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  •  From what I have read (14+ / 0-)

    Bain rarely took any risks with its money but rather the normal mode of operation was to gut a company and its employees for buried assets that they stuffed into their own pockets.

    Corporate raiding is not a noble profession no matter how much spin the "capitalists" doing it put on it.

    •  Or run up lots of debt while taking the cash (9+ / 0-)

      And leaving the company to go bankrupt.

      That was a trick they performed again and again.

      Democrats want to build a better America. Regressives want to take away everything we have built in the last 100 years.

      by NCJim on Sun Jan 08, 2012 at 03:45:12 PM PST

      [ Parent ]

    •  Risk is for chumps. (4+ / 0-)

      Modern monopoly capitalism is about guaranteed profits. That's why "business leaders"  are always complaining about uncertainty.  

      ¡Viva Baja Libre!

      by Azazello on Sun Jan 08, 2012 at 03:46:26 PM PST

      [ Parent ]

    •  Re (2+ / 0-)
      Recommended by:
      squarewheel, nextstep

      If it is possible to do this, the only reason can be that the affected company has assets that are being utilized in an economically suboptimal way. By breaking up the company, the employees and equipment can be put to more optimal uses.

      If the company was in an optimal economic position, it would be impossible to make any money from this type of activity since the asset value of the company would exceed that of its constituent parts.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Sun Jan 08, 2012 at 05:45:28 PM PST

      [ Parent ]

      •  A question for you (3+ / 0-)
        Recommended by:
        jts327, NCJan, DianeNYS

        Suppose you have a small company that you want to grow.  You have a million dollars in the bank but need 50 million to go to the next level and the business is such that the opportunity will be gone by the time you would be able to have enough money to grow.

        You bite the bullet and go out and get some money to expand but must give control of the company over to the investors.

        They come in and say that expansion is not viable after claiming to have done some studies and proceed to start laying off most of the staff and pocketing their 50 million in addition to your million.

        I'm not saying this isn't a very simplistic example, but I've seen this basically happen a few times over my career.

        •  Re (1+ / 0-)
          Recommended by:
          nextstep
          They come in and say that expansion is not viable after claiming to have done some studies and proceed to start laying off most of the staff and pocketing their 50 million in addition to your million.

          Why would I sign an agreement that gave them the power to do this? The capitalization company and I can sign any agreement we mutually agree to. If they lay off most of my staff and dismantle the company, it's only because I allowed them to do so.

          Or, I don't take the funding.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Mon Jan 09, 2012 at 09:59:46 AM PST

          [ Parent ]

      •  as much as I appreciate your capitalist dogma (3+ / 0-)
        Recommended by:
        jts327, Jackson L Haveck, DianeNYS

        you always assume that there is an element of integrity in these decisions.

        "they", in all probability, did not come in to do anything optimally, other than skirt the edge of the law to destroy the company and raid the assets.

        the fact that wanton, and it is wanton, destruction can be so easily manifested is reason why your purist strain of capitalism can be said to be quite rare in these here modern united states.

        the 1%'s are not trying to do anything that involves making a better product or pleasing their customers.  they are sucking the competitiveness out of the US as short term profit and causing a great deal of long term damage.  they get away with this because they write the laws that make it legal.  vampire squids indeed.

        Even Obama thinks they are all a bunch of savvy businessmen acting legally.

        big badda boom : GRB 080913

        by squarewheel on Sun Jan 08, 2012 at 11:39:23 PM PST

        [ Parent ]

        •  Re (0+ / 0-)
          "they", in all probability, did not come in to do anything optimally, other than skirt the edge of the law to destroy the company and raid the assets.

          If the assets are worth more than the company is, then "raiding" them will produce a more optimal use of the capital investment of these assets.

          How did Bain manage to buy the company so cheaply? If the company was profitable enough (or potentially so), it would be too expensive to buy for such a purpose.

          the 1%'s are not trying to do anything that involves making a better product or pleasing their customers.  they are sucking the competitiveness out of the US as short term profit and causing a great deal of long term damage.  they get away with this because they write the laws that make it legal.  vampire squids indeed.

          Maybe, but someone has to give "the 1%" money in exchange for some service or other. There is no evidence that anything illegal happened in this case, or even that there was any kind of "skirting of the law", or Congressional influence peddling, or anything else.

          If you as a company don't want what the 1% are offering, you can always turn it down.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Mon Jan 09, 2012 at 10:05:21 AM PST

          [ Parent ]

      •  Define Economically Suboptimal (2+ / 0-)
        Recommended by:
        Jackson L Haveck, DianeNYS

        Many small closely-held companies, especially in New England, had survived 100, 150, or 200 years of (frequently very severe) business cycles by using very conservative, cash-weighted, low-debt financial management techniques to support long-term survival---because recessions, depressions, and bad times are inevitable on a time horizon of 50--100 years.  

        Current MBAs do not share this philosophy, and companies like Bain systematically bought out many such companies  in the 1970s and 1980, and loaded them up with so much debt that they went under when the economy hit the next small bump.

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