Bain Capital, headed by Mitt Romney, destroyed GST Steel and the lives of its employees. Please understand, this is not an isolated incidence. This is the Mitt Romney/Bain Capital modus operandi.
Here’s how it appears to work:
Bain Capital purchases a business with a bit of cash, finances the rest and transfers the financing as a debt to the business. It then cuts expenses by laying employees off and refusing to invest the necessary money for the business to operate competitively. Bain sells bonds, takes dividends for itself, while allowing the business to go deeper into the hole. Bain takes money to pay itself bonuses, runs the business into bankruptcy and closes the business, and because of the bankruptcy, all the money business debt that Bain ran up is forgiven. When there is no money to pay the guaranteed pensions, the federal government has to make good on a portion of the pensions. And when all of the employees are laid off….guess who gets to pay for unemployment? That would be me and you. And then these assholes have the audacity to complain about the federal deficit.
Nice little racket, eh?
Kansas City’s GST Steel was a successful company that had been making steel rods for 105 years when Mitt Romney and his partners took control in 1993. They cut corners and extracted profit from the business at every turn, placing it deeply in debt. When the company eventually declared bankruptcy, workers were denied their full pensions and health insurance, and the federal government was forced to step in and bail out the pension fund.
1993 – Mitt 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
“Bain got its money back quickly. The new company issued $125 million in bonds and paid Bain a $36.1 million dividend in 1994.”