Not so, Hoodat. Read the following from Murdoch's conservative paper, the NY Post:
Former Dade CEO Scott Garrett, who managed the business for the first few years after the takeover, said Romney "was far more in tune with what was going on throughout his firm, and even the portfolio companies, than you might expect."Bain reduced Dade's research and development spending to 6 to 7 percent of sales, while its peers allocated between 10 and 15 percent. Dade in June 1999 used the savings as part of the basis to borrow $421 million. Dade then turned around and used $365 million from the loan to buy shares from its owners, giving them a 4.3 times return on their investment.
A Dade executive, who requested anonymity, said he confronted new CEO Steven Barnes after a boardroom meeting within a week of the distribution.
"You really think it's a good idea to borrow, you know, one times sales?" he asked.
"Oh. Yeah. Yeah. You know, that's fine," Barnes responded. "You know companies do that all the time."
The executive then told Barnes, "Well, that'd be like me going out and borrowing the amount of money I make in a year and then trying to pay it off and pay for my house and feed myself and everything else. That doesn't make sense." The executive said he let it drop after that.
In August 2002, Dade filed for bankruptcy. Read more: http://www.nypost.com/p/news/business/ad_mitt_mistakes_jRmd2LHaPIb0bbNn1ZkgaJ#ixzz1jQC1Lm9j
Wow, good catch Mt FRiend. That kind of business practice is clearly skirting the boundaries of illegality. I didn’t even have a clue that this was going on, but if you have corporate raiders running a business this is exactly the kind of predatory scheme one would expect if the purpose in raiding the company was to loot it and then scuttle the ship.
What are you doing up so late? Or are you just up early?
Do you realize that Dade Behring was a huge success story? The bankruptcy filing was only temporary. The company boomed after that. When they were finally sold to Siemens in 2007, they employed over 6,000 people. They boasted worldwide sales of $1.7 billion and had a net worth of 0ver $6 billion. It is hard to find that caliber of success in the business world. Going from $440 million to $6 billion in only 13 years? Who else do you know that can deliver a 14-fold ROI? Voters are going to see this and think that Mitt is some kind of business genius. It’s better to stick with things like Romneycare instead of bringing up what amounts to business miracles.
Xzins, this is an extremely weak line of argument. Not only will you lose, conservatism will lose. Newt and Perry are wrong on this.
Did you read those books I recommended?
http://www.fee.org/nff/the-myth-of-the-robber-barons/
Please do so asap. You’re embarrassing yourself and our great cause. You sound like an FDR Democrat, which leads to an LBJ Democrat. You’re being waved off, take another pass and land safely.
In August 2002, Dade filed for bankruptcy.
This was not an isolated case.
* Bain in 1988 put $5 million down to buy Stage Stores, and in the mid-’90s took it public, collecting $100 million from stock offerings. Stage filed for bankruptcy in 2000.
* Bain in 1992 bought American Pad & Paper (AMPAD), investing $5 million, and collected $100 million from dividends. The business filed for bankruptcy in 2000.
* Bain in 1993 invested $60 million when buying GS Industries, and received $65 million from dividends. GS filed for bankruptcy in 2001.
* Bain in 1997 invested $46 million when buying Details, and made $93 million from stock offerings. The company filed for bankruptcy in 2003.
Romney’s Bain invested 22 percent of the money it raised from 1987-95 in these five businesses, making a $578 million profit.
While I have not investigated all of Romney’s Bain investments and there may be cases where he made money and improved businesses, there’s little question he made a fortune from businesses he helped destroy.
Read more: http://www.nypost.com/p/news/business/ad_mitt_mistakes_jRmd2LHaPIb0bbNn1ZkgaJ#ixzz1jS4jxauE
This line of attack is so insidious. Did the business do anything illegal, no! When the business failed we have a bunch of people come out and say the business owners should have sacrificed everything to protect their way of life. I don't buy any of this and think this line of attack on free enterprise is going to backfire and get the one guy we don't want the nomination.
I do appreciate your post from the NY Post. At least it was from a conservative commentator But I must respecfully disagree.
I was with an investment firm in the eighties and nineties that did precisely what Bain does except the firm
acquired troubled banks and S and Ls. The objective was to buy the troubled bank, recapitalize it with either
public investors or private funds we raised, restructure it, hold it for a period of time and then sell it to
attain profit for all investors in the fund as well as the firm. Sometimes we would buy it from other owners and
sometimes we would bid on failed banks the government took over so the government could offset some of the
taxpayer loss they sustained in paying out the depositors thru FDIC. From a business person’s perspective it is
cheaper to buy a distressed entity like a bank if you want entre into the industry than starting it up from
scatch because the shell (or the “carcass” as progressives would characterize it in the vulture storyline)
already has a base of depositors you do not have to go out and find.Sometimes we would get ahead of ourselves as
the bank valuation upticked and the industry soared and borrow a bit too much (”loot” in progressive terms) to
take out profits and try to grow into the next deal and sometimes we were not aggressive enough in our laying on
debt to grow into the next deal.It is a judgement call and those with a hindsight crystal ball could criticize
the judgement calls in retrospective as does the author of the article you posted. As with any portfolio, there
were failed bank investments in the portfolio, most were marginally profitable and a small minority were
spectacular winners that accounted for well above average returns for the overall portfolio of banks.Pretty much
fit the overall profile of a Bain returns.
Our objective was neither noble or nefarious. It was profit and the nobility of saving and creating jobs is
oftimes the byproduct of the purest form of free enterprise that Bain and the investment firm I worked for
practiced.
But I suppose if one wants to encapsulate what we did in political terms for a soundbite:A bunch of fat cat
vultures picked over the carcass of a company, looted it, fired the employees and went on vacation!