In our September 1 issue, John Stoehr reports on working-class perceptions of Mitt Romney. But what do Romney and his cohorts think of the people who work for them? Financial writer Josh Kosman devotes a chapter of The Buyout of America to Bain Capital, the company that Mitt Romney founded. The passages below are a snapshot of Bain’s relationship with its newly acquired employees.
“…Bain in 1992 bought American Pad & Paper (Ampad) from Mead Corp. in a $56 million buyout. Just as with Dade, Bain’s strategy was to build the company through acquisitions. In 1994, Ampad bought Smith Corona’s Marion, Indiana, paper-pad and hanging-file-folder operations. On Independence Day weekend that year, the company dissolved the union that represented the Marion employees, laying off 320 workers—though it did offer to hire some of them back at lower wages and reduced benefits.”
“Soon after Bain’s purchase of Baxter’s division, DuPont began seeking a buyer for its similar lab-equipment business. Bain was interested. When news of a possible sale got out, Robert Brightfelt, who ran the DuPont subsidiary, addressed employees…. ‘Don’t worry,’ he told the crowd of four hundred people. ‘We’re not going to sell you out to investment banks.’ He also made a point of reassuring the anxious audience that benefits would remain intact…”
“…In June 1999, Bain was thinking about how to get out [and] changed the benefits it gave to the former DuPont workers…. The company froze their pensions and converted them from a defined-benefit plan, in which employees upon retirement were entitled to 75 percent of the average of their combined salary in their last three working years, to a cash-balance plan in which they would get a lump sum equal to what they were owed in 1999.”