Mitt Romney's Steel Mill Problem
So by now you've all seen that MoveOn.org anti-Romney ad, which gives a preview of the coming year in attack ads I fear. Now Reuters follows up on the story, painting an unsightly picture of the Kansas City steel mill's failed turnaround. My question is: How does Romney plan to respond to this thoroughly predictable line of attack?
Soon after, in October 1993, Bain Capital, co-founded by Mitt Romney, became majority shareholder in a steel mill that had been operating since 1888. It was a gamble. The old mill, renamed GS Technologies, needed expensive updating, and demand for its products was susceptible to cycles in the mining industry and commodities markets.
Less than a decade later, the mill was padlocked and some 750 people lost their jobs. Workers were denied the severance pay and health insurance they'd been promised, and their pension benefits were cut by as much as $400 a month.
What's more, a federal government insurance agency had to pony up $44 million to bail out the company's underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees.
There’s no question that in his career, Romney has created wealth. But among the broader voting populace, no impression exists that he created jobs. He has to correct that by connecting the two - that by creating wealth and profit he created jobs elsewhere even as some companies died - before it defines him.
His campaign needs a better response than the one they’re currently giving, that’s for sure. Perhaps Romney should give a speech like Danny DeVito’s in Other People's Money?
It'd be a start, at least.
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Comments:
Sep '10
Re: Mitt Romney's Steel Mill Problem
The Moveon.org ad is easy to counter, for a candidate with confidence and conviction. Mitt's been tagged as being "stuck in the 50's": what his team needs to do is steal a page from the late Steve Jobs's Cupertino experience and craft a message that resonates with a different generation.
Unfortunately, I'm not sure that he can do it.
Aug '10
Re: Mitt Romney's Steel Mill Problem
The coincidental release of this story by moveon.org and Reuters sure make it appear that Ezra Klein is a busy man again. Looks like Journolist is up and at 'em just in time for an election.
Dec '11
Re: Mitt Romney's Steel Mill Problem
Both arguements are substantively true.
Edited on January 6, 2012 at 5:02pmAug '10
Re: Mitt Romney's Steel Mill Problem
Seems like if the Dems wanted to face Mitt in the general they would hold their fire on this sort of stuff until after he gets nominated.
Great clip, btw.
Aug '10
Re: Mitt Romney's Steel Mill Problem
Was New England Wire & Cable owned by the same stockholders as Teldar Paper?
May '10
Re: Mitt Romney's Steel Mill Problem
Dec '11
Re: Mitt Romney's Steel Mill Problem
Frozen Chosen: Seems like if the Dems wanted to face Mitt in the general they would hold their fire on this sort of stuff until after he gets nominated.
Great clip, btw. · Jan 6 at 8:04am
Scare tactic to keep blue collar white voters from getting to enfranchised in the republican party, and sort out their overwhelming problem there.
Apr '11
Re: Mitt Romney's Steel Mill Problem
I'm a big fan of free-market capitalism, but this bit makes me nervous:
If this is accurate, Bain Capital should have had its investment wiped out, rather than making a profit. And receiving consulting fees from a failing company you've invested in sounds like the kind of self-dealing that is the legitimate target of financial regulation.
Dec '11
Re: Mitt Romney's Steel Mill Problem
First off know that I am commenting kind of blindly here as I cannot see the videos in question behind my firewall at work. My comment is this:
Why isn’t enough to posit that those 750 some workers had a job for close to a decade longer than they otherwise would have, had it not been for Bain Capital’s investment?
Re: Mitt Romney's Steel Mill Problem
Jonathan Cast: I'm a big fan of free-market capitalism, but this bit makes me nervous:
If this is accurate, Bain Capital should have had its investment wiped out, rather than making a profit. And receiving consulting fees from a failing company you've invested in sounds like the kind of self-dealing that is the legitimate target of financial regulation. · Jan 6 at 8:18am
You've hit on the real danger here. It's not just that this hurts among blue collar community. It hurts among those of us who are against bailouts (in this case via pension guarantees) in all their forms.
Dec '11
Re: Mitt Romney's Steel Mill Problem
The more I think about it, both are cautionary tales about the hobbesian jungle. If the town and unions go too far, and break the compact screw em. But if you lead with screw em, there isnt any reason to not bleed the company dry is there?
There has to be a certain amount of intra-group loyalty for a society to survive. Towns like Rochester and Detroit and soon california who bleed the golden goose dry dont deserve a golden goose, but the opposite is true as well. Dont expect people to not get while the getting is good if at the first sign of trouble you are just going to cut bait and run.
Besides wouldnt it suck to get out of the copper business just a few short years before essentially every company in the world went on huge copper cabling projects, and the pancea of fiber optics and wireless never materializes?
I see your other people's money and raise you a sexy boots.
Jul '10
Re: Mitt Romney's Steel Mill Problem
That speech doesn't work at all.
He's talking to the investors of the company, not the employees who will be out of work.
(But we'll retrain the field engineers to be HR managers!)
That response, one might say if one were on the left, is a typical GOP screed of favoring the rich investor class over the working man.
Feb '11
Re: Mitt Romney's Steel Mill Problem
I think talking about what happened in 1993 would be ludicrous. I mean, that was almost 20 years ago. And the world has changed.
Romney would be far better off talking about how steel industry in the US can be revived and why he and not Obama would be better off for reviving steel and other manufacturing jobs. Steel will revive because it is a resource-intensive industry requiring iron ore and energy. Obama's EPA will restrict iron ore production because the EPA hates using up non-renewable resources, which iron ore is. Obama's EPA will be opposed to fracking and horizontal drilling and try to ban it rather than trying to mitigate the environmental effects which would give American gas drillers an even larger competitive advantage when Europeans decide to exploit their natural gas. In addition, Romney should talk about decreasing American corporate tax rates which place Americans at a large disadvantage compared to other OECD and NIC countries.
That and not something about what happened in the last century is what Romney should talk about.
Edited on January 6, 2012 at 5:33pmFeb '11
Re: Mitt Romney's Steel Mill Problem
Jonathan Cast: I'm a big fan of free-market capitalism, but this bit makes me nervous:
If this is accurate, Bain Capital should have had its investment wiped out, rather than making a profit. And receiving consulting fees from a failing company you've invested in sounds like the kind of self-dealing that is the legitimate target of financial regulation. · Jan 6 at 8:18am
Who says America has free-market capitalism. It doesn't. And never will.
Aug '10
Re: Mitt Romney's Steel Mill Problem
What do the American people know about the steel business ? Here's Bethlehem Steel, it's a good picture of the steel business in this country for the last 40 years- dead.
Aug '10
Re: Mitt Romney's Steel Mill Problem
Jonathan Cast: I'm a big fan of free-market capitalism, but this bit makes me nervous:
If this is accurate, Bain Capital should have had its investment wiped out, rather than making a profit. And receiving consulting fees from a failing company you've invested in sounds like the kind of self-dealing that is the legitimate target of financial regulation. · Jan 6 at 8:18am
Agreed. Romney's biggest "challege", IMHO, is that Bain Capital has received it's fair share of taxpayer bailouts and government subsidies over the years.
Aug '10
Re: Mitt Romney's Steel Mill Problem
flownover: What do the American people know about the steel business ? Here's Bethlehem Steel, it's a good picture of the steel business in this country for the last 40 years- dead.
Is that a photograph or a painting?
Aug '11
Re: Mitt Romney's Steel Mill Problem
Was there ever any doubt? It worked so well the first time, I can't imagine they wouldn't do it again.
Dec '11
Re: Mitt Romney's Steel Mill Problem
Misthiocracy
Jonathan Cast: I'm a big fan of free-market capitalism, but this bit makes me nervous:
If this is accurate, Bain Capital should have had its investment wiped out, rather than making a profit. And receiving consulting fees from a failing company you've invested in sounds like the kind of self-dealing that is the legitimate target of financial regulation. · Jan 6 at 8:18am
Agreed. Romney's biggest "challege", IMHO, is that Bain Capital has received it's fair share of taxpayer bailouts and government subsidies over the years. · Jan 6 at 8:44am
I wonder how long we find out bain capitals lobbying history? Or do we really think they were always on the side of angels?
Feb '11
Re: Mitt Romney's Steel Mill Problem
Flownover...the steel business in the US isn't dead at all. Companies that innovated with mini-mills and continuous casting, such as Nucor, are very much alive.