Claim: “Mitt Romney and Bain Capital made millions for themselves and then closed this steel plant.” (text on-screen)
Sponsor(s): Priorities USA Action
Air Date(s): August 14
Total Estimated Spending On This Claim: $1,096 ($2,193 Total)
Washington Post The Fact Checker Summary: “After Bain made its investment, and the company issued new debt, the plant was able to invest in new equipment. Still, the record is clear that Bain reaped a substantial return on its investment – at least $12 million – while the company’s debt burden soared to $378 million.
But how much of this was Bain’s fault – or Romney’s?
The Reuters article quoted union officials as blaming Bain for saddling the company with too much debt. But Reuters also quoted an analyst as blaming the union – which mounted a strike in 1997 over pension benefits – and noting that all of the steel companies that failed in that period were unionized. And Regelbrugge, the former chief executive, blamed his successor for hiring poor managers. “I have no question that the company would have survived under different management,” he said. (One could argue that was also Bain’s fault.) […]
In any case, Romney had left day-to-day management of Bain in February 1999 to help organize the Salt Lake City Olympics. So he was running Bain when GS Industries settled the 1997 strike with workers by promising guarantees on their pensions, but he was not there when the company used the bankruptcy process to break those promises and slash those benefits. […]
We have given the Obama campaign Pinocchios for blaming Romney for Bain deals that took place entirely after he left for the Olympics gig. This case is a different matter. It falls into a gray area, because the investment and many key decisions were made while Romney was running Bain, as he has acknowledged – even if the denouement came when he was no longer in charge. ”
FactCheck.org Summary: As we have written repeatedly in the past, Romney left day-to-day operations at Bain Capital in early 1999 to head up the Salt Lake City Organizing Committee, and we have criticized the Obama campaign for blaming Romney for the offshoring of jobs by Bain-controlled companies after that time. But this case is a little different. Although the steel company declared bankruptcy in 2001, the debt was incurred at GS Industries under Romney’s leadership. […]
It was a very bad time in general for the steel industry in the United States. A 2003 report from the U.S. International Trade Commission found that between 1999 and 2003, “31 steel companies producing products subject to the safeguard measures [including tariffs on foreign imports] have filed for bankruptcy protection.”
In short, whether Romney or Bain is responsible for the demise of the company is a matter for legitimate debate.