Romney Economics: A Threat for the Middle Class
Romney economics does not make Romney a job creator. He was in business to make money for himself and his investors, not to create jobs. His partners have said it, he’s said it and everyone knows it.
- Please see this new DNC video titled “Mitt Romney: Not A Job Creator.”
Today the Vice President is in New Hampshire talking about Romney economics and another company Romney and his partners bankrupted – a paper company called Ampad. Like in so many cases across the country, Romney and his partners got a huge return on their investment while workers and communities lost out.
- Kansas City: Romney and his partners walked away with millions after closing a 105-year-old steel mill and putting 750 people out of work.
- Florida: They walked away with a quarter of a billion dollars after closing two medical-equipment manufacturing facilities and putting 850 people out of work.
Indiana: Romney economics helped Romney and his partners multiply their initial investment in a paper company 20 times over while 1,500 Americans lost their jobs.
- Romney and his fellow investors bought the company in 1992 for $40 million – $35 million of which they borrowed.
- Two years later, Romney and his partners bought a plant in Marion, Indiana. All the workers were forced to reapply for their jobs with reduced pay and benefits.
- Less than a year later, Romney and his partners shut down the Marion, Indiana, plant, which cost all 250 workers their jobs. More than 1,500 workers were laid off when they loaded Ampad up with debt, drove it into bankruptcy, and closed factories across the country.
- Romney and his partners made $100 million on the deal, walking away with a major profit off of their initial investment after driving a company into bankruptcy and driving workers out of a job.
An outstanding question was what would happen to the unsecured creditors who lost out on $170 million when Ampad went bankrupt. Now we’re learning that they’re getting two-tenths of a cent for every dollar they were owed – they waited 11 years to find out they’re getting a fraction of a fraction of a fraction of what they’re owed.
- Please see this Politico article on the subject.
Romney and his partners were involved in Ampad from buyout to bankruptcy. Until August 2001, Romney was president and CEO of his financial buyout firm, which as late as 1998 and 1999 squeezed nearly $4 million from Ampad in yearly advisory fees.
We’re not challenging the virtues of the private equity business, or Romney’s right to run his business as he saw fit – or even his right to run other businesses into the ground while turning a profit for himself and his investors. There are many ways to run a business, and many ways to measure businesses’ success.
Instead we’re pointing out that Romney economics puts short-term profit for himself and his investors ahead of long-term growth for the companies he bought and sold. Those same “heads I win, tails you lose” values would have severe consequences for middle-class families if he were elected President.