Posted by AzBlueMeanie:
The Washington Post's "Fact Check" editor is Glenn Kessler, he of the four Pinnochio scale fame. I will frequently cite his fact checking, even though Kessler sometimes suffers from the same malady as PolitiFact, inserting his own subjective interpretation to provide "context" that turns a factual statement into "somewhat misleading."
I now have to question Kessler's credibility as a fact checker. On Thursday, Kessler gave the Obama campaign 4 Pinocchios for Obama’s newest anti-Romney ad for this claim: “Running for governor, Mitt Romney campaigned as a job creator. But as a corporate raider, he shipped jobs to China and Mexico. As governor, he did the same thing: Outsourcing state jobs to India.”
On Friday, the page one lead story in the Washington Post is Romney’s Bain Capital invested in companies that moved jobs overseas. How does a "fact checker" miss his own editorial board meeting about the big investigative report being published on page one, and how does he get his facts so wrong? What's happening here?
Reporter Tom Hamburger's investigative report has the facts. Romney’s Bain Capital invested in companies that moved jobs overseas:
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.
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.
* * *
Romney campaign officials repeatedly declined requests to comment on Bain’s record of investing in outsourcing firms during the Romney era.
* * *
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. . . 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. . .
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.
* * *
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.
* * *
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.
* * *
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.
* * *
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.
So if you are happy with the outsourcing of good American jobs abroad, Romney's your guy. You may want to keep your passport up to date since you will have to go abroad to find work.
UPDATE: here is the Obama campaign ad that Glenn Kessler got wrong.
Recent Comments