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View Diary: New DNC web ad "Outside the Circle" SURGICALLY REMOVES THE ENTRAILS of Mitt Romney (153 comments)

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  •  Well, they do some management stuff (3+ / 0-)
    Recommended by:
    FiredUpInCA, susanWAstate, BusyinCA

    They will sell off under-performing divisions. Trim costs, including staff. That can actually be a positive if the company was running in the red or close to it. But this is counter-balanced by the fact that the private equity firm gets paid first of all, and often out of the company's own assets. Private equity firms really like targets that have under-performing businesses but a lot of cash on the balance sheet. That cash disappears fast - into their pockets.

    •  So I am happy to be corrected if wrong (1+ / 0-)
      Recommended by:
      FiredUpInCA

      Did Bain save any of these hapless companies, or just funnel their assets into their pockets and sell off the rest?

      Or let's use another metric:  Any "jobs created" at those foundering plants?

      •  They are not long-term investors (1+ / 0-)
        Recommended by:
        FiredUpInCA

        so they didn't keep ownership in any companies. Some companies were successful during and after Bain's ownership and may even have added jobs. (Romney though tried to take credit for companies like Staples most of whose growth occurred years after they were not owned by Bain). But a substantial number went bankrupt and/or were left in a weakened state by the debt Bain took on and the layoffs they engineered. There is a WSJ article with some details and examples. The damning thing though is that Bain could make money even if the business they owned failed. They might make more if it didn't, but they sometimes had gains even if it did.

        •  Thanks, appreciated (0+ / 0-)

          Quite specifically, I wanted to know if there is any truth to Romney giving himself credit for turning around troubled companies.  It's one thing to make bundles of money with good investments.  It's one thing to justify killing off companies by claiming they were going under any way (so, hey, why not help myself to their last assets while delivering the coup de grace?)

          But he has often proclaimed that he can turn around a bad economy, because he turned around troubled businesses.  And it occurred to me, I've never heard of any such success story.

          •  WSJ mentioned a small optical company (0+ / 0-)

            that was a big winner for Bain. It appears they bought it when it was tiny and it grew significantly while they owned it. So that was one example. If they were poison to every company they touched, it would be hard to get investors for their funds and hard for a company to accept a takeover offer fromj them. They weren't quite that bad, but quite a few companies wish they hadn't ever had Bain ownership.

            •  I don't doubt or dispute (0+ / 0-)

              that Bain made good investments, and that they added value.  Probably, mostly, by having enormous capital to throw at the company, maybe through their wonderful management skills.

              IIRC, that medical waste company, the fetus-disposal-are-R guys, that went wildly successful when Bain bought out its main competitor.  There's lots you can do with money.

              But: I still have never heard of a company that was struggling, going under, that Mitt "turned around."

        •  Bain ALLWAYS had gains from its dealing (0+ / 0-)

          with the target companies. Bain didn't own Staples; they just financed it. They never controlled it.

          I'm asking you to believe. Not in my ability to bring about real change in Washington ... *I'm asking you to believe in yours.* Barack Obama

          by samddobermann on Tue Sep 25, 2012 at 05:18:22 AM PDT

          [ Parent ]

    •  Pension plans. They are fat in (0+ / 0-)

      older companies. And they have the target company borrow the money to finance its own buyout. Then they issue bonds (more debt) and give themselves huge dividends.

      There is nothing in the dealings about making the company particularly successful before they unload or let go bankrupt.

      I'm asking you to believe. Not in my ability to bring about real change in Washington ... *I'm asking you to believe in yours.* Barack Obama

      by samddobermann on Tue Sep 25, 2012 at 05:16:05 AM PDT

      [ Parent ]

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