Mitt Romney Profits From Sensata Workers’ Pain, In China And America
Posted by Phoenix Woman on October 22, 2012
This is something Mitt Romney is hoping doesn’t get broadcast to most Americans:
Republican presidential candidate Mitt Romney started the “private equity” firm Bain Capital. Bain Capital makes its money by purchasing companies using “leveraged buyouts” that borrow huge sums using the purchased company’s own assets as collateral. They often use part of the borrowed money to immediately pay itself. Bain then cuts costs by doing things like sending jobs to China, cutting wages and manipulating tax rules to cut taxes owed, along with standard big-business practices like consolidating business units, taking advantage of economies of scale not available to smaller competitors, squeezing distribution channels for price cuts, and other practices that bring competitive advantages. (Please see So DID Mitt Romney Really “Create Jobs” At Staples? for a look at how this works.) Then, after reorganizing the purchased companies Bain “harvests” them for profit. (“Harvest” is Romney’s word, watch the linked video.)
Bain Capital purchased a sensor manufacturer that makes key components for our automobile supply chain, and named it Sensata. They immediately announced they closing a factory in Freeport, Ill., and sending the manufacturing and jobs to China to save money. (This is significant because China is engaged in efforts to dominate American auto supplies. See China Cheating Costs 400K Auto Parts Jobs and Why The Latest Trade Complaint Against China Matters. )
Bain/Sensata brought in Chinese workers and made the Freeport workers train them. Bain/Sensata is moving the equipment out of the Freeport factory and shipping it to China right now. The Freeport employees have set up a camp outside the factory that they call Bainport and are trying to stop the Bain trucks that are moving the equipment out for shipment to China. Supporters were arrested this week, trying to stop those trucks.
The Sensata employees have asked Romney to come to Freeport/Bainport and help them. Read on to learn about Romney’s response to the Sensata workers, and how Romney is actually making big money right now from shipping their jobs to China.
Of course, the Romney campaign announced that Romney would refuse to lift a finger to save the Freeport plant, much less assist the horrifically exploited Chinese Sensata workers who get paid the equivalent of 99 cents to $1.35 an hour, work twelve hours a day and seven days a week, and are
forced to live on site in the factory with no rights to speak of even as Sensata rakes in the cash and sticks American taxpayers with the bill:
Sensata enjoyed record revenues last year – this isn’t about making the “hard choices” necessary to save a failing enterprise. The workers in Freeport have been working 24 hours a day, in three shifts. They make $14-17 per hour, with benefits.
According to a report by the Institute for Global Labour and Human Rights, one of Bain’s first actions after buying Sensata was to set up “12 Sensata/Bain capital funds ‘organized under the laws of the Cayman Islands’ so as to avoid paying taxes.” They’ll get a small tax break for relocating the plant – the one Mitt Romney insisted did not exist during the first debate – and then use those offshore funds to defer taxes on some of the income the company generates.
American tax-payers, on the other hand, have paid $780,000 to retrain some of Sensata’s laid off workers in Illinois, according to the New York Times . One would be hard pressed to come up with a clearer example of capturing private gains while socializing the costs.
Instead, Romney campaign spokesman Curt Cashour tried to deflect the responsibility from Romney, Bain’s founder — the man who up to 2002 was the sole shareholder, owning 100% of the company per SEC filings) and a man who still gets a few million dollars a month from his Bain involvements — onto President Obama. Gee, how brave and principled of you, Willard. Not.
Sorry, the comment form is closed at this time.