Obama's campaign is directly responsible for this ad and keeping it on a site it has produced. Obama is allowing this even though it contains downright lies and significantly misleading misrepresentations. I would not vote for anyone who keeps allowing or suborning the equivalent of perjury to the American people. It is just plain dishonest and I will not tolerate that in a President.
"I just don't think America's going to buy that nonsense" Joe Scarboro on Morning Joe MSNBC.
Wanna bet?
(I hope this type of thing is successfully fought, though I don't expect Obama and Axelrod to be honest after this - in my opinion, politics rule here, instead of ethics.
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LEFT OUT:
Romney had left Bain Capital in 1999, two years before GST’s 2001 problems.
Nearly half of U.S. steel companies filed for bankruptcy around the same time that GS Industries did. Major customers of the Kansas City plant did, too. The problem was due to Chinese steel dumped on the market below cost, thus driving away all profits and ability to compete.
The subsequent buyer closed the plant, not Bain. The mill reopened in 2005 with 300 employees (was 450).
All the voices were of union workers, with the union's abuse of power being the primary problem (see quote below)..
Mark Essig, GS Industries’ former CEO, never met Romney. Essig came aboard in January 1998, the year before Romney left to run the Salt Lake City Winter Olympics.
"His name never came up in conversation," Essig told PolitiFact. "In my tenure at GSI, he wasn't involved at all."
The company survived and is a huge global success, see their site: GS Industries.
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ON THE UNION FACTOR
A reader who used to work at GST e-mails some context about the union situation there:
I nearly choked on my Cheerios when I read that GST employees were blaming Bain for their downfall. I worked at GST Steel in Kansas City for four months in 1997 immediately after leaving the Navy.
Why only four months? Quickly after I started, I surprised to learn that several of my fellow USW Local 13-represented employees, mostly millwrights and electricians, we’re making between $100-130k. This was mainly due union-mandated overtime which, at least on a few occasions, consisted of the employees bringing in sleeping bags and pillows and sleeping in the shop. It would be hard for any company to stay competitive while paying double-time union wages to get their beauty sleep, but that’s not the half of it. The union employees obviously didn’t think they had it easy enough, so they went on strike in March of ‘97. The plant shut down for a couple of weeks until it re-started under the operation of management and non-union workers. The strike lasted a couple more months. I had a family to support, so I couldn’t afford to wait. I took another (non-union) job with another company. They shuttered the plant for good a few years later.
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For those interested in going a little further, though I'm sure you've got the idea.
THE PURCHASE
In 1993, owner Armco was looking to sell it, and selected Bain because the firm "had earned a sterling reputation for turning companies around," according to a Reuters story from January 2012 about Bain’s takeover.
Bain "undertook an ambitious plan in 1993 to turnaround GSI, a struggling manufacturer of specialty steel products that was slated for closure if no investor could be found. We invested more than $100 million and many thousands of hours into this turnaround, upgrading its facilities in an attempt to make the company competitive."
DECEPTIVE MISREPRESENTATION AND OMISSION
Ad:
After they bought GST Steel, "Mitt Romney and his partners loaded it with debt, closed the Kansas City plant and walked away with a healthy profit, leaving hundreds of employees out of work with their pensions in jeopardy."
They did take a dividend that was relatively small compared to the overall debt, as they did have investors include pension plans and unions. Most of the financing was used for acquisitions, as is normal in such businesses.
Ad: ‘Leaving hundreds of employees out of work with their pensions in jeopardy’
Following the bankruptcy, GS Industries announced it would not provide workers with severance pay, health insurance, life insurance and pension supplements that had been promised.
GS Industries also left the company’s pension underfunded by $44 million and in 2002 the U.S. Pension Benefit Guaranty Corp. bailed it out.
Basic pension payments were covered, Reuters wrote, but not the supplement agreed to with the union.
THE GS INDUSTRIES CHALLENGE
GS Industries is a global leader, even after China dumping of steel caused huge problem
1993: GS Industries had suffered a large decline, to the point where Armco sought to sell the mill. In the sale Armco was to cover the employee pension obligation [not Bain!]. [the pension gap at the Kansas City mill was an unforeseen consequence of a falling stock market and adverse market conditions.] Note that it is a baldfaced lie or ignorance of the facts that accusers accuse Bain of taking advantage of the government, when it had no involvement at all! Bain took a large dividend, based on issuance of bonds, where the financial condition of the firm justified it (otherwise lenders wouldn't have lent the amount that was far larger than the dividend!).
In 1995 Bain merged GS with another wire rod maker in Georgetown, South Carolina, to form one of the largest mini-mill steel producers in the U.S. The new company issued another $125 million in bonds to pay for the merger. Bain doubled down, reinvesting $16.5 million of its earlier dividend. Over the next two years, GS Industries completed its upgrade of the Kansas City plant and laid the groundwork for an IPO to pay down some of the debt. (Don't take the "conjecture" statements that are made as true or the attributing of motives as accurate - as that would be one very big logic critical thinking error.) The company foundered when a wave of cheap imports from Asia drove steel prices down sharply, while costs for natural gas and electricity rose. (it went into bankruptcy in 2001, two years after Romney had left permanently.)
A spokesman for Bain Capital said: "Over $100 million and many thousands of hours were invested in GSI to upgrade its facilities and make the company more competitive during a 7-year period when the industry came under enormous pressure and 44 U.S. steel companies went into bankruptcy. In the same period, we worked to turn around GSI, we helped launch and grow an innovative business called Steel Dynamics that is today a $6 billion global leader....
Bain sold the mill in 2003, a year after the bankruptcy from the china dumping, The subsequent buyer closed the plant, not Bain. The mill reopened in 2005 with 300 employees (was 450).
Was Romney a “predator” when GS went bankrupt in 2001? He had left Bain in 1999. The decision to deny the GS workers their pensions and health benefits was not Romney’s - and Armco had guaranteed the obligation, not Bain. To protect pensions, the firm had contracted with the government's Pension Guaranty Corporation, which had to make up the difference and cover the employees.. Romney was out of the picture by then. The Truth About Bain Capital, at DickMorris.com
Mark Essig, GS Industries’ former CEO, never met Romney. Essig came aboard in January 1998, the year before Romney left to run the Salt Lake City Winter Olympics.
"His name never came up in conversation," Essig told PolitiFact. "In my tenure at GSI, he wasn't involved at all."
Nearly half of U.S. steel companies filed for bankruptcy around the same time that GS Industries did. Major customers of the Kansas City plant did, too, Essig said.
"Prices went down, costs had gone up, and it was kind of the perfect storm," he said. "Our debt load was a factor, no question about it. But there were companies without that debt load that also filed bankruptcy."
Meanwhile, Essig pointed out, closing the Kansas City plant allowed GS Industries to save other plants.
"No matter how you look at it or what side of the fence you're on, a plant closing is a tragedy for people. I think when you try to tie it to a person and say, Mitt was responsible for this — a lot of steel companies went out of business at that time, and Mitt had nothing to do with it," he said. "That was a macro-industry tidal wave that hit that plant. I bet if the Bain folks had to do it over again, they wouldn't have gotten involved with it. It can't be treated lightly, but to lay it at the doorstep of Mitt, I think, is not accurate."
