Romney Economics: Dade

Jobs lost At least 2,937

Debt at time of bankruptcy $1.5 billion

Bain profits > $250 million

It was just a great place to work, with great people. Everybody really enjoyed it there—and then Bain Capital came in.
—Charlie DeAngelis, mechanical engineer who lost his job after eight years with Dade BehringBoston Globe, 11/19/09

"Bain and a small group of investors bought Dade in 1994 with mostly borrowed money, limiting their risk. They extracted cash from the company at almost every turn—paying themselves nearly $100 million in fees, first for buying the company and then for helping to run it."

New York Times, 11/13/11

They were just trying to milk as much out of us as they could.

William T. Mowrey, former Dade employee whose salary and pension were cut

My experience at Dade during those Bain Capital years was that it was strictly an investment, not to create jobs. ... No one came from Bain and said, ‘How can we hire more people?’ It was, ‘How do we turn our investment around and make a lot of money?’

—Michael Rumbin, vice president of technology management at Dade during Romney's tenure
Los Angeles Times, 12/4/11

Romney Economics: GST Steel

Jobs lost 750

Bain initial investment $8 million

Bain profits > $12 million

Romney Economics: Stage Stores

Jobs lost 5,794

Stores closed 331

Bain profits $170 million

1993Mitt Romney and his partners invest $8 million to acquire majority control of an Armco steel mill in Kansas City, Missouri, and rename it GS Technologies

Mitt Romney and his partners embark on an aggressive plan to buy up hundreds of successful small clothing stores and combine them into one large company called Stage Stores

“Bain got its money back quickly. The new company issued $125 million in bonds and paid Bain a $36.1 million dividend in 1994.”

Reuters, 1/6/12

Stage Stores more than doubles, quickly growing from 257 stores in 13 states to 607 stores in 24 states, and it begins trading shares on the New York Stock Exchange

1995Romney and his partners merge GS Technologies with a mill in South Carolina, calling the new company GS Industries. The company’s total debt grows to $378 million.

Romney and his partners sell their shares in Stage, just as stock prices reach a record high

“In 1997, with Armco's pension guarantees set to expire in one year, the United Steelworkers local at the Kansas City plant was worried that GS was not setting aside enough money to cover pension obligations and other benefits in the event of a shutdown.”

Reuters, 1/6/12

“In September of 1997, Bain Capital, which then owned 13 percent, and Acadia, which owned 12 percent, sold more than six million shares of their Stage Stores stock—virtually all they owned—for $208 million in the secondary offering. … The sales were made at record high stock prices of as much as $52 per share.”

Houston Business Journal, 4/9/99

1994Ratings agency Moody’s gives Dade’s bond offerings a “junk” rating due to Dade’s debt load

1998One year later, the stock price of Stage plummets and Romney’s partners repurchase shares

We were doing well and then Bain Capital bought us and they took everything they could out of the company without making the investments we needed to stay competitive. … They ran the company into bankruptcy.

—James Sanderson, who had worked at the mill since 1974McClatchy, 1/14/12

1997Dade CEO Scott Garrett says the company would continue to focus on acquisitions or mergers rather than pursue new technologies or invest in research and development.

Crain’s Chicago Business, 3/24/97

“[The stock price] plunged 58 percent in one day in August of 1998, when the company reported large sales declines and slashed its expected earnings by 25 cents per share. The company’s stock has continued to decline, now trading in the $6 to $7 range for a total loss in value of more than 70 percent.”

Houston Business Journal, 4/9/99

2001With more than $500 million in debt, GS Industries files for bankruptcy and informs workers that the company will not honor the guarantees it had promised them—including severance pay, health insurance, life insurance and pension supplements.

1999Dade takes on $420 million in new debt to pay Romney and the other owners. Romney and his investors take home $242 million from the payout, a 700% return on their initial investment.

I worked hard all my life and played by the rules, and they allowed this to happen.

—Joe Soptic, employee for 28 years, whose wife died of lung cancer after he lost his GST health planReuters, 1/6/12

2000Stage Stores files for bankruptcy

“In the case of Dade Behring, the debt the company piled on in 1999 to pay Bain and GS Capital a $365 million distribution eventually led to the company’s crash.”

Daily Deal, 8/8/02

2002The U.S. Pension Benefit Guaranty Corporation determined that GST had underfunded its pension plan by $44 million. The federal agency stepped in to cover the basic pension payments, but workers never recovered the full pensions they had been promised.

“Company officials blame the Chapter 11 filing two years ago on ‘an expensive and expansive growth binge.’”

Houston Business Journal, 7/5/02

2002From 1999 to February 2002, a total of 5,795 workers at Stage Stores lose their jobs

2002Dade Behring files for bankruptcy

They leveraged this thing to the hilt and got out when they could. … We were left holding the bag. … These guys worked there for two years and ended up as millionaires.

—Michael Rumbin, a vice president of technology management at Dade during the Romney yearsBloomberg, 7/20/11

"An examination of the Dade deal, which Mr. Romney approved and presided over, shows the unintended human costs and messy financial consequences behind the brand of capitalism that he practiced for 15 years."

New York Times, 11/13/11

I never thought of what I do for a living as job creation. … The primary goal of private equity is to create wealth for your investors.

–Marc B. Wolpow, former managing partner at Bain Capital, the firm where Mitt Romney was CEO, who worked closely with Romney for nine yearsLos Angeles Times, 12/3/11

For nearly 20 years, Mitt Romney specialized in corporate buyouts.

It’s an experience he cites as a key credential for running for president. And while it’s true that Romney’s business philosophy often led to profit for him and his partners, far too often it came at great cost to American workers and their communities.

At first, Romney focused primarily on venture-capital deals, investing in start-ups or companies that were looking to expand. But by the early ’90s, Romney and his partners began looking for bigger payouts with less risk, believing there was more money to be made buying and selling existing businesses than growing new ones.

Using what’s called a “leveraged buyout,” Romney and his investors would take control of a successful business, paying only a fraction of the total price. The rest would be paid for by loading the company up with debt, using the firm they were buying as collateral—so ultimately the company, not Romney, would be responsible for paying back the debt.

That left Romney and his partners free to extract as much profit from the companies as possible.

In the face of mounting debt, the company would then be forced to cut costs—often by reducing wages and benefits, closing factories and stores, and laying off workers. Sometimes, this debt was enough to drive the company into bankruptcy.

Mitt Romney wasn’t trying to build companies for the long term. His plan was to maximize short-term profits, and then resell all or part of the business before the debts came due.

The goal was never to create jobs—the goal was to create wealth for investors, as even his former partner admitted.

All investments involve risk, but under Mitt Romney’s leadership he and his partners carefully structured deals so that even when the companies in question went bankrupt, Romney and his investors maximized their potential gain. Using this model, they made millions, even while driving some businesses into bankruptcy and leaving workers without jobs, health care, and pensions.

Mitt Romney and his partners played by their own set of rules, and practiced a model that was profitable for a handful of corporate investors, but sometimes devastating for local communities.

This is the experience that Mitt Romney now cites as his qualification to be president, and the economic philosophy he would bring to the entire country.

But the real strength of our economy is a growing, thriving middle class, where everyone plays by the same rules and everyone gets a fair shot.

These guys have figured out a way to make money even if the company loses money. … ‘It’s heads we win, tails we win.’

–MIT Sloan School of Management Senior Lecturer Howard Anderson on Romney and his tactics Boston Globe, 1/14/12

Romney Economics: Ampad

Bain initial investment: $5 million

Bain profits: $100 million

Jobs lost: 1,500

1992Mitt Romney and his investors purchase Ampad from Mead Corporation. They put in $5 million of their own money, and Ampad takes on $35 million in debt to pay for the rest of the purchase.

“Bain Capital, Romney's Boston-based firm … took over a Marion, Indiana, paper plant and laid off one-fifth of its workers, cut wages, sharply reduced health benefits and eliminated the company retirement plan.”

Boston Globe, 9/23/94

We were just fired … They came in and said, ‘You’re all fired. If you want to work for us, here’s an application.’ We had insurance until the end of the week. That was it. It was brutal.

—Randy Johnson, former worker at the Marion, Indiana, plantLA Times, 12/16/07

1995Romney and his partners continue their “roll-up” strategy, buying up companies within the industry and merging operations, cutting jobs along the way.

“In 1995, several months after shuttering a plant in Indiana and firing roughly 200 workers, Bain Capital borrowed more money to have Ampad buy yet another company, and pay Bain and its investors more than $60 million—in addition to fees for arranging the deal.”

The Boston Globe, 6/26/07

1996Romney’s firm takes Ampad public in order to sell some of its shares. Romney and his investors receive between $45 million and $50 million on the sale, in addition to a $2 million fee for arranging the public offering.

“By 1999, Ampad’s debt reached nearly $400 million, up from $11 million in 1993, according to government filings.”

The Boston Globe, 6/26/07

2000Ampad declares bankruptcy

“The result: Ampad couldn’t pay its debts and plunged into bankruptcy. Workers lost jobs and stockholders were left with worthless shares. Bain Capital, however, made money—and lots of it.”

The Boston Globe, 6/26/07

I would not vote for [Mitt Romney] for anything. ... I’d like to see the jobs that he’s created. He has taken away jobs.

—Phyllis Detro, who lost her job when the Ampad plant in Marion, Indiana, closed in 1995Bloomberg, 7/20/11


Romney: Mitt Romney claims that while governor of Massachusetts, he cut spending and balanced the budget. The Reality: Governor Romney left behind a $1 billion budget deficit for the next governor and saddled Massachusetts taxpayers with more debt per person than any other state.


Romney: “As governor I cut taxes 19 times and didn't raise taxes.”
—Mitt Romney [Iowa debate, 8/11/2011]

The Reality: As governor, Romney increased taxes and fees by as much as $750 million per year. [, 1/31/08]


Romney: “We didn’t just slow the rate of growth of our government, we actually cut it.”—Mitt Romney, 2012

The Reality:During Romney’s term as governor, state budget spending increased every single year.

Mitt Romney ran for governor of Massachusetts promising more jobs, decreased debt, and smaller government.

Here’s what Massachusetts got instead:

Watch the video to see why Romney economics didn't work then, and won't work now:


Romney: Mitt Romney claims the unemployment rate in Massachusetts fell during his tenure as governor, and that he created 40,000 jobs in his last year in office. The Reality: As the nation’s economy grew and the median income rose, under Romney, Massachusetts plummeted from 36th to 47th out of 50 states in job creation, and the median income declined.

When Mitt Romney took office, unemployment in Massachusetts was below the national average—but economic growth trailed the rest of the country every year he was governor, and job growth failed to keep up with population growth, even as the reverse was true in the rest of the country. When he left office, Massachusetts’ unemployment rate was higher than the national average for the first time since 1995.

Bureau of Labor Statistics, Annual Average Unemployment Rate, Accessed 9/16/11

State spending under Governor Romney increased by more than $6 billion:

2004: increased $409 million
2005: increased $930 million
2006: increased $1.8 billion
2007: increased $3.3 billion

The U.S. economy was growing in 2001 and creating jobs by July 2003. Romney served during a nationwide economic expansion, and when he took office Massachusetts’ unemployment rate had been below the national average for nearly a decade.

But the recovery was slower in Massachusetts: Under Romney, the economy was not at the top or even in the middle, but close to the bottom of all the states. The state lost jobs through the end of 2003, lagging behind the rest of the country by six months. And by the time he left office, the state’s unemployment rate was above the national average.

During his first year in office, Governor Romney proposed higher fees for hospitals, nursing homes, motor vehicles, buying a house, the blind, disabled people, and getting married, and that first year Massachusetts increased fees more than any other state in the nation.

Governor Romney left behind a budget deficit of $1 billion, using what incoming Governor Deval Patrick described as “all kinds of patches and plugs” to hide the extent of the shortfall.

Associated Press, 1/5/07

Long-term debt increased by 16% in just four years, leaving Massachusetts with the highest debt per person in the nation.

Tax Foundation, Facts & Figures, 2009

“As Mitt Romney pursues his bid for the presidency, his record as Massachusetts governor will come under scrutiny, including how the state’s economy performed during his administration. Our analysis reveals a weak comparative economic performance of the state over the Romney years, one of the worst in the country.”

—Andrew Sum and Joseph McLaughlin, Center for Labor Market Studies at Northeastern University
Boston Globe, 7/29/07

For the average person in Massachusetts, that meant an increase of $1,227 in state and local fees and taxes.

The Tax Foundation, 8/7/08

In Romney’s first two years, wages fell by 5%—the steepest in the nation. While the median income nationwide was on the rise, it was dropping in Massachusetts.

Bureau of Labor Statistics Average Annual Pay,

During Governor Romney’s term, state government employment grew at six times the rate of private sector jobs.

Stagnant job growth:
During Governor Romney’s term, Massachusetts fell from 36th to 47th out of 50 states in job creation, while the overall U.S. economy grew. Of the jobs that were created in Massachusetts, state government jobs grew at six times the rate of private sector jobs.

Even as his state failed to keep up, Governor Romney slashed funding for the Massachusetts Manufacturing Extension Partnership [MassMEP], a program that “helped hundreds of small manufacturers compete, survive, and save thousands of jobs.”

Boston Globe, 11/23/2006

Over $2.6 billion in debt was added while Romney was governor:

2003: $694 million
2004: $653 million
2005: $1.028 billion
2006: $257 million

Source: Massachusetts Treasurer

Instead of rooting out waste, Governor Romney tried to eliminate the state agency tasked with finding fraud and waste in government.

Associated Press, 2/27/03

Declining manufacturing: By the end of Governor Romney’s term, Massachusetts had lost more than 40,000 manufacturing jobs—a rate twice the national average.

While increasing fees and taxes for middle-class families, Governor Romney cut taxes for 278 of the state’s wealthiest individuals, costing taxpayers more than $75 million.

Boston Globe, 11/10/05

Higher taxes:
Governor Romney raised taxes and fees on the middle class while cutting taxes for millionaires like himself and 278 of the wealthiest individuals in Massachusetts.

Manufacturing payroll employment throughout the nation declined by nearly 1.1 million or 7% between 2002 and 2006, but in Massachusetts it declined by more than 14%, the third-worst record in the country.

—Andrew Sum and Joseph McLaughlin, Center for Labor Market Studies at Northeastern University
Boston Globe, 7/29/07

The state bureaucracy grew while Romney was governor, and he filled important positions with party loyalists and allies. As he was leaving office, Romney appointed his communications director, Eric Fehrnstrom, to a housing board that would have earned him a lucrative state pension.

Boston Globe, 11/23/06

Governor Romney promised to set strict limits on debt, but he broke that promise. And every year he was in office the state’s debt liability increased.

Op-Ed, Eric Kriss, Boston Herald, 11/3/03; Massachusetts Treasurer
The Promise: Romney campaigned on the promise that he would cut taxes on the middle class. The Record: As governor, Romney increased taxes and fees by as much as $750 million per year—and average folks saw their state and local taxes increase by $1,227 per person.

Did he make government smaller and simpler—no, it looked very much like what it did four years earlier. … There was very little reform to show for his four years.

—Michael Widmer, president of the nonpartisan Massachusetts Taxpayers Foundation
Salon, 12/31/11

Highest debt in the nation:
Under Mitt Romney, Massachusetts’ debt burden grew to the highest per person in the nation.

In 2004, Romney proposed a plan that would have added $8 billion more in debt, using 40-year bonds. The Massachusetts Treasurer’s Office said the interest rates on the bonds would be simply “astronomical.”

The Bond Buyer, 4/14/04

Still, Romney tried to cut unemployment benefits, and vetoed or cut more than $100 million in economic development spending, including:

  • Training for health professionals, older workers, and low-wage workers
  • Investments in high-tech manufacturing and entrepreneurs
  • Support for the Massachusetts Mathematics, Science, Technology and Engineering grant fund for students

By the end of Governor Romney’s term, Massachusetts had lost more than 40,000 manufacturing jobs—a rate twice the national average. As jobs disappeared, Massachusetts lost 222,000 residents—3.5% of the state’s population, and the third-highest rate of departures in the country.

Bureau of Labor Statistics, Accessed 3/18/12; Boston Globe, 7/29/07
The Promise: Mitt Romney said his time in the private sector had given him the experience he would need to streamline government. The Record: The state bureaucracy grew while Romney was governor, and he was unable to rein in government spending.

Increased government spending:
State spending increased every year while Romney was in office, and he left behind a $1 billion deficit for the next governor.

As he was leaving office, Romney’s aides released a budget blueprint to the public that was far rosier than their internal projections. Privately, they warned incoming Governor Patrick’s aides that the state’s finances were grim, including a budget deficit of $1 billion.

Boston Globe, 12/30/06

Sending jobs overseas: Governor Romney failed to protect good jobs in Massachusetts, and actually directed the outsourcing of state jobs to other countries.

When he talks about a turnaround, we really haven’t had a turnaround.

—Michael Widmer, president of the nonpartisan Massachusetts Taxpayers Foundation
New York Times, 3/16/07

He was going to be our CEO governor, the state's top salesman who could talk businessman-to-businessman and bring home those good-paying jobs. It was all bunk, of course.

—Steve Bailey, Boston Globe columnist, 2/15/06
The Promise: Mitt Romney promised that he could use his business experience to solve Massachusetts’ budget problems. The Record: As a corporate buyout specialist, Romney routinely saddled companies with huge debts, sometimes to the point of bankruptcy. As governor, Romney led Massachusetts to higher deficits and the highest per person debt in the nation.
The Promise: As a candidate, Mitt Romney promised that his experience as a corporate CEO made him uniquely qualified to create jobs. The Record: In the private sector, Romney focused on profits for his shareholders—not creating jobs. As governor, Romney cut jobs training and economic development programs—and as unemployment dropped across the U.S., Massachusetts lagged behind.


Romney: “I will help usher in a revival in American manufacturing.” —Mitt Romney, 5/8/2012 Reality: Under Romney’s leadership, Massachusetts manufacturing declined by double the national rate, and was the third-worst overall in the country.


Romney: “The idea that we have to see more and more products move from our shores to China is unacceptable.” —Mitt Romney [Detroit News, 9/5/11] Reality: The Washington Post reports that as CEO, Mitt Romney advised companies that were “pioneers” in outsourcing jobs overseas. As governor, Romney drew from the same playbook and outsourced state jobs. And today, Romney has proposed eliminating all taxes on companies’ foreign profits—which would actually encourage companies to send jobs overseas.

Over the course of Romney’s term, Massachusetts was 48th in the nation in manufacturing job growth, and lost more than 40,000 manufacturing jobs.

2004Governor Romney vetoed a bill that would have banned state contractors from outsourcing state work overseas. [Boston Globe, 6/26/04]

Massachusetts’ economic growth trailed the rest of the country every year Romney was governor.

“To save a little bit of money, we're actually putting people out of work here and sending this work to India, and employing those people with taxpayer dollars.”

—Massachusetts State Sen. Jack Hart, who sponsored the anti-outsourcing budget measure Romney vetoed [Boston Globe, 6/18/04]

Even as job growth lagged, Governor Romney vetoed more than $100 million in funding for economic development projects and the promotion of manufacturing—including programs for skills training and investments in high-tech manufacturing and entrepreneurs.

2005Under Romney, Massachusetts outsourced jobs in child support enforcement, food stamps, and unemployment insurance overseas. [GAO report, “Offshoring In Six Human Services Programs,” 3/2006]

“Manufacturing payroll employment throughout the nation declined by nearly 1.1 million or 7% between 2002 and 2006, but in Massachusetts it declined by more than 14%, the third worst record in the country.”

—Andrew Sum and Joseph McLaughlin, Center for Labor Market Studies, Northeastern University

“When Romney was governor of Massachusetts, his administration signed a $160,000-per-month contract with Citigroup to operate an electronic food stamp system that included a consumer call center in India.”

[Boston Globe, Political Intelligence, 5/1/12]

“Romney’s recent move to slice $425 million from state spending will hamper the efforts of a program that has helped hundreds of small manufacturers compete, survive, and save thousands of jobs.”

[Boston Globe, 11/23/06]

“Last week, representatives from the Commonwealth’s Human Resources Division confirmed that approximately $1 million in Medicaid data entry work has been outsourced to a firm in India for several years. As a governor who promised to bring jobs to Massachusetts, you must be as disturbed by this news as I am.”

Letter to Mitt Romney from SEIU/NAGE Local 207 President Theresa McGoldrick, 5/20/2004
View the Romney Economics Timeline