"You don't think my flags are the right size? Well, then you're fired." (Rebecca Cook/Reuters)
On Wednesday, Mitt Romney brings his campaign
to Florida for a speech and a fundraiser. He will no doubt brag that he alone has the experience to create jobs in America ... but somehow I imagine he won't be telling any stories about this aspect
of his experience: the story of how Bain Capital loaded up medical company Dade Behring with debt, allowing it to extract $342 million in profit before firing 850 of the company's Florida-based employees and declaring bankruptcy. As the New York Times reported
Bain settled on a common tactic in private equity: In April 1999, it pushed Dade to borrow hundreds of millions of dollars to buy half of Bain’s shares in the company — and half of those of its investment partners.
Bain pocketed the $242 million. Goldman received $121 million. Top Dade executives got $55 million, records show. The total payout to shareholders reached $420 million — nearly as much as the purchase price for Dade.
The strategy of sharply increasing Dade’s debt alarmed several executives. Mr. Garrett, the former chief executive of Dade who stood to gain from the transaction, said he had argued unsuccessfully against it.
“It was too aggressive,” Mr. Garrett said. “It was done right up to the limit of what the company could borrow.”
With the amount of money that Dade owed to creditors and vendors at nearly $2 billion, some executives worried that the company would have little maneuvering room if its financial situation suddenly deteriorated.
Soon enough, it did. Interest rates rose, increasing Dade’s debt payments. The value of the euro, then a new currency, slid, reducing Dade’s European revenue. And a new distribution center had unexpected delays.
Creditors, unsettled by deteriorating finances and high debts, began to pounce. More layoffs followed. And in August of 2002, Dade filed for bankruptcy protection.
Bain's initial investment was $30 million. It cashed out $342 million—more than 1,000 percent of what it originally paid, yet the company still went bankrupt and nearly 1,000 Florida workers lost their jobs.
This is the experience Mitt Romney wants to bring to the Oval Office. No thanks.