Politics & Elections
Newton Mayor Chaz Allen Responds to Mitt Romney’s Record of Outsourcing Jobs PDF Print E-mail
News Releases - Politics & Elections
Written by Elizabeth Purchia   
Monday, 25 June 2012 09:10

DES MOINES – Today, Newton Mayor Chaz Allen released the following reaction to the Washington Post story, which exposed Mitt Romney's breathtaking hypocrisy. Romney campaigns all over this country vowing that he would be an advocate for American jobs, but his record at Bain Capital shows a history of making a fortune advising companies on how to outsource jobs to China and India:

“It’s like a punch in the gut to learn that Mitt Romney, the man who wants to be our next President was an outsourcing pioneer. On the campaign trail, he tells us that he supports American jobs. But as a new Washington Post article reveals, he was a corporate raider at Bain Capital, the financial firm he started. Romney made a fortune helping companies outsource jobs done by American workers to China and India.

“Clearly, Mitt Romney never personally experienced what happens when the main employer in your town picks and moves jobs overseas.  In Newton, we lived through that. Our friends and neighbors lost their livelihoods and were faced with the sudden crisis of wondering where their next paycheck would come from.

“Since day one, President Obama has been fighting for all of us, to strengthen the middle class and build an economy for the long-term. He has been to Newton twice, and because of his support for the wind industry, Newton is coming back with the support of new wind manufacturing jobs. Under his Presidency in fact, Iowa has added nearly 20,000 new manufacturing jobs.

“Mitt Romney’s record shows that was focused on maximizing profits for himself and his investors before workers, companies and communities.  He shows us once again that Romney Economics don’t work. The job of the President is to care about all Americans, not just the top few.”

 

Romney’s Bain Capital invested in companies that moved jobs overseas 

By Tom Hamburger, Thursday, June 21, 7:53 PM

Mitt Romney’s financial company, Bain Capital, invested in a series of firms that specialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.

During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components, according to filings with the Securities and Exchange Commission.

While economists debate whether the massive outsourcing of American jobs over the last generation was inevitable, Romney in recent months has lamented the toll it’s taken on the U.S. economy. He has repeatedly pledged he would protect American employment by getting tough on China.

“They’ve been able to put American businesses out of business and kill American jobs,” he told workers at a Toledo fence factory in February. “If I’m president of the United States, that’s going to end.”

Speaking at a metalworking factory in Cincinnati last week, Romney cited his experience as a businessman, saying he knows what it would take to bring employers back to the United States. “For me it’s all about good jobs for the American people and a bright and prosperous future,” he said.

For years, Romney’s political opponents have tried to tie him to the practice of outsourcing American jobs. These political attacks have often focused on Bain’s involvement in specific business deals that resulted in job losses.

But a Washington Post examination of securities filings shows the extent of Bain’s investment in firms that specialized in helping other companies move or expand operations overseas. While Bain was not the largest player in the outsourcing field, the private equity firm was involved early on, at a time when the departure of jobs from the United States was beginning to accelerate and new companies were emerging as handmaidens to this outflow of employment.

Bain played several roles in helping these outsourcing companies, such as investing venture capital so they could grow and providing management and strategic business advice as they navigated this rapidly developing field.

Over the past two decades, American companies have dramatically expanded their overseas operations and supply networks, especially in Asia, while shrinking their workforces at home. McKinsey Global Institute estimated in 2006 that $18.4 billion in global information technology work and $11.4 billion in business-process services have been moved abroad.

While the export of jobs has been disruptive for many workers and communities in the United States, outsourcing has been a powerful economic force. It has often helped lower the prices that American consumers pay for products and created a global supply chain that has made U.S. companies more nimble and profitable.

Romney campaign officials repeatedly declined requests to comment on Bain’s record of investing in outsourcing firms during the Romney era. Campaign officials have said it is unfair to criticize Romney for investments made by Bain after he left the firm but did not address those made on his watch. In response to detailed questions about outsourcing investments, Bain spokesman Alex Stanton said, “Bain Capital’s business model has always been to build great companies and improve their operations. We have helped the 350 companies in which we have invested, which include over 100 start-up businesses, produce $80 billion of revenue growth in the United States while growing their revenues well over twice as fast as both the S&P and the U.S. economy over the last 28 years.”

Until Romney left Bain Capital in 1999, he ran it with a proprietor’s zeal and attention to detail, earning a reputation for smart, hands-on management.

Bain’s foray into outsourcing began in 1993 when the private equity firm took a stake in Corporate Software Inc., or CSI, after helping to finance a $93 million buyout of the firm. CSI, which catered to technology companies like Microsoft, provided a range of services including outsourcing of customer support. Initially, CSI employed U.S. workers to provide these services but by the mid-1990s was setting up call centers outside the country.

Two years after Bain invested in the firm, CSI merged with another enterprise to form a new company called Stream International Inc. Stream immediately became active in the growing field of overseas calls centers. Bain was initially a minority shareholder in Stream and was active in running the company, providing “general executive and management services,” according to SEC filings.

By 1997, Stream was running three tech-support call centers in Europe and was part of a call center joint venture in Japan, an SEC filing shows. “The Company believes that the trend toward outsourcing technical support occurring in the U.S. is also occurring in international markets,” the SEC filing said.

Stream continued to expand its overseas call centers. And Bain’s role also grew with time. It ultimately became the majority shareholder in Stream in 1999 several months after Romney left Bain to run the Salt Lake City Olympics.

Bain sold its stake in Stream in 2001, after the company further expanded its call center operations across Europe and Asia.

The corporate merger that created Stream also gave birth to another, related business known as Modus Media Inc., which specialized in helping companies outsource their manufacturing. Modus Media was a subsidiary of Stream that became an independent company in early 1998. Bain was the largest shareholder, SEC filings show.

Modus Media grew rapidly. In December 1997, it announced it had contracted with Microsoft to produce software and training products at a center in Australia. Modus Media said it was already serving Microsoft from Asian locations in Singapore, South Korea, Japan and Taiwan and in Europe and the United States.

Two years later, Modus Media told the SEC it was performing outsource packaging and hardware assembly for IBM, Sun Microsystems, Hewlett-Packard Co. and Dell Computer Corp. The filing disclosed that Modus had operations on four continents, including Asian facilities in Singapore, Taiwan, China and South Korea, and European facilities in Ireland and France, and a center in Australia.

“Technology companies, in particular, have increasingly sought to outsource the business processes involved in their supply chains,” the filing said. “. . . We offer a range of services that provide our clients with a one-stop shop for their outsource requirements.”

According to a news release issued by Modus Media in 1997, its expansion of outsourcing services took place in close consultation with Bain. Terry Leahy, Modus’s chairman and chief executive, was quoted in the release as saying he would be “working closely with Bain on strategic expansion.” At the time, three Bain directors sat on the corporate board of Modus.

The global expansion that began while Romney was at Bain continued after he left. In 2000, the firm announced it was opening a new facility in Guadalajara, Mexico, and expanding in China, Malaysia, Taiwan and South Korea.

In addition to taking an interest in companies that specialized in outsourcing services, Bain also invested in firms that moved or expanded their own operations outside of the United States.

One of those was a California bicycle manufacturer called GT Bicycle Inc. that Bain bought in 1993. The growing company relied on Asian labor, according to SEC filings. Two years later, with the company continuing to expand, Bain helped take it public. In 1998, when Bain owned 22 percent of GT’s stock and had three members on the board, the bicycle maker was sold to Schwinn, which had also moved much of its manufacturing offshore as part of a wider trend in the bicycle industry of turning to Chinese labor.

Another Bain investment was electronics manufacturer SMTC Corp. In June 1998, during Romney’s last year at Bain, his private equity firm acquired a Colorado manufacturer that specialized in the assembly of printed circuit boards. That was one of several preliminary steps in 1998 that would culminate in a corporate merger a year later, five months after Romney left Bain. In July 1999, the Colorado firm acquired SMTC Corp., SEC filings show. Bain became the largest shareholder of SMTC and held three seats on its corporate board. Within a year of Bain taking over, SMTC told the SEC it was expanding production in Ireland and Mexico.

In its prospectus that year, SMTC explained that it was in a strong position to meet the swelling demand from other manufacturers for overseas production of circuit boards. The company said that communications and networking companies “are dramatically increasing the amount of manufacturing they are outsourcing and we believe our technological capabilities and global manufacturing platform are well suited to capitalize on this opportunity.”

Just as Romney was ending his tenure at Bain, it reached the culmination of negotiations with Hyundai Electronics Industry of South Korea for the $550 million purchase of its U.S. subsidiary, Chippac, which manufactured, tested and packaged computer chips in Asia. The deal was announced a month after Romney left Bain. Reports filed with the SEC in late 1999 showed that Chippac had plants in South Korea and China and was responsible for marketing and supplying the company’s Asian-made computer chips. An overwhelming majority of Chippac’s customers were U.S. firms, including Intel, IBM and Lucent Technologies.

A filing with the SEC revealed the promise that Chippac offered investors. “Historically, semiconductor companies primarily manufactured semiconductors in their own facilities,” the filing said. “Today, most major semiconductor manufacturers use independent packaging and test service providers for at least a portion of their . . . needs. We expect this outsourcing trend to continue.”

Research editor Alice Crites contributed to this article.

 
Loebsack, Cole Applaud Senate Passage of Language to Strip National Political Convention Funding PDF Print E-mail
News Releases - Politics & Elections
Written by Joe Hand   
Monday, 25 June 2012 08:51

Washington, D.C. – Congressmen Dave Loebsack (IA-02) and Tom Cole (OK-04) today applauded the Senate passage of language that would strip tax payer funding for this fall’s political party conventions. Cole introduced similar legislation in the House and Loebsack recently became the first Democrat to cosponsor the bill.  The Senate attached this language as an amendment to the Farm Bill by an overwhelming bipartisan vote of 95-4.

“I applaud the Senate for including language to strip this unnecessary funding.  Both Democrats and Republicans are fully capable of funding their own party conventions and do not need to have this tax payer subsidy,” said Loebsack.  “I am hopeful the House will move on Congressman Cole’s legislation after such a strong, bipartisan vote in the Senate.”

"The overwhelming Senate vote in favor of ending taxpayer funding of political conventions is proof that it's time to terminate this outrageous waste of taxpayer dollars,” said Cole. “After 40 straight months of 8 percent unemployment and massive budget deficits, it would be an embarrassment to go into this year's conventions with this policy still in place.  The House has already voted to end funding once.  With passage of the Senate amendment, I'm hopeful that we can build on the growing bipartisan support to sign this commonsense reform into law before another dollar of taxpayer money is wasted on conventions."

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Vice President Biden to Travel to Iowa, Highlight President Obama’s Record on Strengthening the Middle Class PDF Print E-mail
News Releases - Politics & Elections
Written by Obama for America Press Office   
Monday, 25 June 2012 07:30

Two-day tour will include stops in Waterloo, Dubuque and Clinton

DES MOINES – This week, June 26-27, Vice President Biden will travel to Eastern Iowa on the Strengthening the Middle Class Tour to highlight President Obama’s ongoing efforts to grow Iowa’s rural economy and bolster middle-class security for Iowa’s workers. The two-day tour will include stops in Waterloo, Dubuque and Clinton, Iowa.

In remarks during the tour, the Vice President will discuss how President Obama is helping create an economy built to last – one focused on reclaiming the security of the rural middle class and restoring the basic values of hard work and fair play that made our country great. Under President Obama, Iowa’s economy is improving and benefiting from record national farm incomes and exports, with nearly 20,000 additional manufacturing jobs created and a growing renewable energy sector.

Vice President Biden will also lay out the clear economic choice in this election--between the President’s vision for moving our country forward, ensuring an economy built to last and economic security for the middle class, and Mitt Romney’s vision, which would take us back to the same failed economic policies that brought on the worst economic crisis since the Great Depression.

Additional details are forthcoming.

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Obama for America Releases New Television Ads: “Mosaic” and “Come and Go” PDF Print E-mail
News Releases - Politics & Elections
Written by Obama for America Press Office   
Wednesday, 20 June 2012 13:05

DES MOINES -- As Mitt Romney continues to evade his record as governor of Massachusetts, Obama for America today released two new television advertisements – “Mosaic” and “Come and Go” – as part of its continuing effort to highlight the reality of his failed economic policies.

When Romney ran for governor, he promised that he wouldn’t raise taxes and that he would use the values he learned in business to create jobs. But today’s ads make clear that he broke those promises and left Massachusetts worse off.

As highlighted in “Mosaic,” Romney raised more than 1,000 taxes and fees totaling more than $1.5 billion.  He raised each resident’s tax burden by $1,200 per person, an increase of 30 percent. Romney increased fees for everything from milk to nursing homes, from school bus rides to poultry inspections. Fees also increased for gun owners and electricians.

And as highlighted in “Come and Go,” Mitt Romney brought the same values he learned in the private sector to the state house, outsourcing call center jobs to India instead of hiring workers from his own state.

Even today, as he runs for president, Mitt Romney still doesn’t have a jobs plan -- instead relying on the same failed ideas that he implemented in Massachusetts. They didn’t work then, and they won’t work now.

“Mosaic” and “Come and Go” are airing in New Hampshire, Pennsylvania, Virginia, North Carolina, Florida, Ohio, Iowa, Colorado, and Nevada.

Please click HERE to watch “Mosaic” and HERE to read the backup.

Please click HERE to watch “Come and Go” and HERE to read the backup.

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20,000 YOUNG ADULTS IN IOWA BENEFITTING FROM OBAMACARE PDF Print E-mail
News Releases - Politics & Elections
Written by Obama for America Press Office   
Wednesday, 20 June 2012 08:26

Department of Health and Human Services today releases new data; nationwide 3.1 million have benefitted

DES MOINES --- Today, the Department of Health and Human Services published new data that shows 20,000 young adults in Iowa who would otherwise be uninsured remained covered on their family’s plan, thanks to the Affordable Care Act. Nationwide, approximately 3.1 million young people have benefitted from the law, passed in March, 2010, which allows young adults under 26 to stay on their parents’ health insurance plan.

Before Obamacare, adult children would usually be kicked off the family plan when they turned 18 or graduated from school, but young adults often have entry level jobs that don’t provide health insurance.  As a result, young people were the age group most likely to be uninsured.  Under the health care law, that’s changing.  Obamacare requires insurance companies to allow young people to stay on their family health insurance until they turn 26, which has provided a critical bridge for millions of young people across the country.

To learn more about this announcement, visit: http://www.healthcare.gov/news/factsheets/2012/06/young-adults06192012a.html

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