Mitt Romney, Vampire?

[Geee]

National Review:

Mitt Romney went into the wrong line of work. If only he had been a lecturer in constitutional law, he wouldn’t have a business record vulnerable to distortion by a desperate incumbent president.

Barack Obama’s hands, in contrast, are clean. He taught at the University of Chicago Law School and didn’t make the mistake of attempting to start, acquire, or turn around companies. He has no business failures because he has no business successes — if you don’t count selling books about himself to the adoring multitudes.

The president’s reelection campaign is out with a scorching advertisement hitting Romney for one of Bain Capital’s flops, a steel firm that it bought and that eventually went under. This is an instance, according to one of the former steelworkers appearing in the ad, of “vampire” capitalism. The nefarious Romney swooped down on the thriving company and drained it of its life force. If it were a business-school case study, it could have been authored by Bram Stoker.

Or so we’re told. GS Industries is hardly the morality tale the Obama reelection campaign makes of it. Bain Capital didn’t acquire the company to drive it into the ground for fun and profit. Bain wanted to make it work — despite its outdated equipment, union strife, and punishing competition, foreign and domestic. Bain failed, but not for lack of trying over the course of seven years.

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Soon after Bain acquired the steel company in 1993, it announced a $98 million plant modernization and merged with another firm to form, in the words of a Reuters report, “one of the largest mini-mill steel producers in the U.S.” This is a funny way to go about deliberately destroying a company. Bain loaded the firm up with debt and took out a dividend, but it reinvested part of the dividend in the operation. It reportedly spurned a potential offer to buy the firm around the end of 1997.

All the effort went for naught. The management proved incompetent. Cheap imports undercut prices. And the firm was unionized, a factor common to steel companies that couldn’t survive the new low-cost environment.

GS went bankrupt in 2001 (two years after Romney left Bain, as it happens). It was a messy affair, with the U.S. Pension Benefit Guaranty Corp. picking up the pieces from the company’s underfunded pension fund. GS’s experience wasn’t unusual, alas. Dozens of steel companies died in the same period, including the iconic Bethlehem Steel. If the workers at GS had never heard the name Mitt Romney, there is still a good chance they would have been out of jobs.