Would someone please explain to me how Romney made money by closing factories?

[lunamagica]

I saw the Ohio ad with the worker who build the platform from where he and the rest of the workers tor fired. He said that Myth earned 100 million (!) by closing the plant.

How does that work?

[sharp_stick]

2. Are you sure?

and fuck off already.

[TheCowsCameHome]

3. Care for some basil on your pizza?

Open wide, asshole.

[NecklyTyler]

8. The Washington Times????

What does your posted article have to do with Bain Capitol?

[NecklyTyler]

11. Poor Henry

He lasted only nine minutes.

I hope he had a good nine minutes.

[ellenfl]

12. are you in the wrong forum? this is democratic underground, not free republic. eom

[Patiod]

15. It's called "destroying America" via LBO

and to quote Clint Eastwood - go fuck yourself

[sharp_stick]

4. Pretty simple

you buy a company that's having financial difficulties. If you're a true corporate raider a'la Carl the prick Ichan you simply fire everyone after you buy it at a steep discount and then sell the pieces, like the presses, the machinery and the land. You then take your profit and try to find some other group of people to screw.

If you're Bain Capital you pretend that you're buying the company to "turn it around". You fire just enough people to make it look like you mean to improve productivity. Then you get a bunch of suckers... I mean investors, to plow a shitload of money into the company. You continue to cut workers...improve productivity... until it's beyond hope then you fire the rest of them and carry on as Carl Ichan above taking all the cash from the "investors" that you never really planned to plow back into the company.

[mr_hat]

10. You don't even need to sell the assets.

You simply borrow against them.

Use the borrowings to pay your original, small investment off. Continue to pay yourself dividends and consulting fees from the cash flow. Once it crashes, others are left holding the worthless debt. Then it's time to move on!

[Dan]

24. company does not have to have financial difficulties...

the company could just be undervalued relative to its stock price. Acquire company (and even better if it financially sound) and then terminate all employees and make them reapply (that results in an immediate expense reduction) for their jobs at a lower hourly rate. Reduce benefits, eliminate the unions - all positive to the management bottom line. Terminate the company's original management team and replace with the bandits... and if you are real lucky - figure out how to steal the pension funds; taking loans out on the company assets and selling off the parts of the company is just icing on the cake.... work hell out the employees maximizing profits - eventually you bleed the company dry... pack up the equipment - move it to China, prior to that have employees train their replacements...evenually nothing left... oh, as you indicated...default on the loans - all while paying the bandits huge bonuses and salaries for their outstanding management (death spiral) of the company.

Then, the poor 47% are left with nothing - but their part of the ownership society....see it is the workers fault that they cannot work for $2.00 a day - thus making them competitive with the global market. Plus, since there are regulations (OSHA, Worker Safety, pollution controls, etc.,) all those pesky little things that you don't have to worry about in some foreign land - which increase the cost of doing business in the USA, all of these factors which the vulture capitalist use to justify outsourcing jobs and moving factories to foreign lands. Now, since there are few tariffs (fear of a trade war) the goods that were once made in the USofA are now made overseas, and sold here - at the same price or slightly cheaper.... money in the bank for everyone, but us...

It also helps if the foreign country where you place your factories doesn't concern itself with the wellbeing of their workers - so you can work the hell out of them at very low wages... no pesky oversight... and finally even better if you can use substandard materials - helped by lower inspection and oversight combined with reduced inspections by American agencies (as a result of reduced governmental funding)...

I get mad thinking about it...

anyway, my opinion...

[Squinch]

28. Exactly like what Tony Soprano did to the sporting goods store!

[NecklyTyler]

5. Simple formula

Take a failing company and surgical divided it up.

Sell off the good parts and keep this money as profit.

Sell off as much of what is left as can be sold, and give it to the former owners.

Wave adiós mi amigo to the poor suckers who were left in the part of the company that could not be sold as they hurl over the waterfall.

[ellenfl]

6. i believe it works this way . . .

Last edited Sun Sep 23, 2012, 12:54 PM - Edit history (1)

they buy a company; borrow a lot of money; pay themselves; let the company go bankrupt. if that is correct then, essentially, they steal money from the lender and go their merry way.

ellen fl

[FreakinDJ]

7. Wall St. Outsource Monkeys sending Jobs to China

[pnwmom]

9. You convince the company you're "turning around" to take out a huge loan.

You take your profit off the top, with money from that huge loan.

Then you leave. If the company can't make it, tough luck.

[titaniumsalute]

14. There's no convincing

They OWN the company. They just take out the loan.

[pnwmom]

29. They did it both ways. n/t

[titaniumsalute]

13. Leveraged buyouts

Yup they are legal and the they are highly immoral.

Take a company. Buy it cheap with venture capital. (That's other people's money.) First thing you do is cut costs. Since most costs on a spreadsheet at company is salary and benefits...guess what gets cut? Positions, benefits, wages, etc.

If that isn't enough to help generate quick profits they will take a loan out on the company. As soon as the loan is taken the venture capital group takes their FEE off the top. They win already. If the company is able to keep generating profit they may keep for awhile to reward themselves with more cash. If not, they file bankruptcy and restructure, outsource, liquidate, whatever. At that point they don't care. Remember, they go their FEE up front.

By the way...when I speak of FEES it is in the tens of millions.

[Patiod]

16. One of my girlfriends explained it to me 10 years ago

She's the business. As she said "these people are destroying our country" (and they pay her salary)

It's just raping and pillaging, 2000's style.

[demwing]

22. Mitt, you've become a pirate!

[Big Orange Jeff]

19. See the movie "Wall Street"

nt

[lunamagica]

20. Thank you all for explaining. It's so disgusting and immoral, not to mention heartless.

Couldn't expect less from good 'ol Myth.

BTW, I had to step off the computer after posted. Looks like I missed some goof stuff! Bye bye, Basil!

[Jim__]

21. In addition to what was mentioned above, when Bain got contolling interest in a company ...

... the company then "bought" expensive services from Bain. At the time, a company could invest its employees pension funds into the company itself (I don't believe that's legal any more), so Bain could put all of the companies pension funds into the comapny, then spend those funds on Bain's services.

Essentially, once they got control of a company they could loot it. All they needed was the capital to take over and William Bain and Bain's investors supplied that. It's legalized theft. It doesn't require any deep understanding of economics. Romney was just a white-collar thief with lots of political protection.

[demwing]

25. Fuck you, pay me

[thelordofhell]

23. Here ya go.........

[ArcticFox]

26. Ellen and Mr. Hat are right on.

[Indpndnt]

27. Bain destroyed KBToys like this.

Now Bain is crushing Dunkin' Donuts the same way.

It's all here:

http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829|

[HopeHoops]

30. Simple. Use borrowed money to buy a company, borrow against it, then bankrupt it.

They keep the returns and everyone who works at the factory is out on their asses. Tragically, it is legal to do this.