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To assess Romney, look beyond the bottom line — He created jobs, closed factories, made enemies and inspired colleagues — By Bob Drogin, Los Angeles Times Staff Writer — December 16, 2007
This is a prominent article in Sunday’s Los Angeles Times. I meant to post it about 24 hours ago, but my computer was acting up and could not finish the post. Though most of this article is very positive to Governor Romney’s skill, experience, strengths, they go out of their way to point out some failures along the way. For the most part, those failures happened after Bain relinquished control to management. Nevertheless, as Governor Romney progresses toward the White House, there is a high probability that the media will try to dig up stories from these ventures to show him in a negative light.
From 1984 until 1999, Romney led Bain Capital, a Boston-based private equity group that earned jaw-dropping profits through leveraged buyouts, debt hedge funds, offshore tax havens and other financial strategies. In some cases, Romney’s team closed U.S. factories, causing hundreds of layoffs, or pocketed huge fees shortly before companies collapsed.
Even Romney’s staunchest supporters acknowledge that his business record exposes him to criticism.
“The story that gets written is he made lots of money and he’s an evil person, that he’s a robber baron,” said Charles Baird Jr., a former managing director at Bain Capital. “People should be proud of the people he hired, the jobs he created and the pension funds he helped.”
During Romney’s tenure at Bain Capital, outside experts say, most of the companies he and his colleagues helped manage ended up stronger and more profitable. Although exact figures are impossible to obtain, more companies clearly added jobs than cut them.
Romney joined Bain & Co., a management consulting group, in 1978. He quickly drew notice in Bain’s hypercompetitive climate. At one point, he helped anxious colleagues save a business proposal to help an ailing hospital group.
“It was due the next day, and we were in tough shape,” recalled Baird. “He got involved and literally stayed up all night, writing huge portions of the proposal, driving us all, and we ultimately got the biggest bid that Bain had ever gotten. He didn’t yell or scream, or blame other people. He focused on fixing the problem.”
In 1984, William W. Bain Jr., the consulting group’s founder, tapped Romney to lead a spinoff they called Bain Capital.
“We were all younger than the people we were dealing with,” recalled Geoffrey S. Rehnert, one of the co-founders. “But Mitt had a personal network from his family background that gave him the ability to carry himself with greater stature. He was the adult in our group.”
From the start, colleagues recall, Romney enforced a discipline of aggressive analysis, sharp-elbowed deals and intense peer review. He embraced a Socratic style in meetings, asking endless questions and taking an opposing view to understand all the options.
“He felt his role was to be the devil’s advocate,” said Michael F. Goss, now a managing director and chief operating officer of Bain Capital. “Mitt was the guy you had to convince.”
The article provides the pros/cons of taking on the Staples account, all the naysayers, etc…
“They really did their homework,” Stemberg said. “And the night before we opened our first store, Mitt came over and bought everyone pizza and gave a motivational speech.”
Bain Capital cleared $13 million when Staples went public three years later. Today, Staples Inc. is the world’s largest office products retailer.
The last part of the article criticizes Romney for a handful of bus
“It’s a puzzle that people criticize him for making a lot of money” said Steven N. Kaplan, professor of entrepreneurship and finance at the University of Chicago Graduate School of Business. “He ran his company for his shareholders. That was his job.”
~ Vic
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