According to the Washington Post, Mitt Romney and Bain Capital were pioneers in shipping U.S jobs overseas:
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.
Well, let’s take the WaPo’s examples one by one (though here are others). First up, GT Bicycles. WaPo:
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.
Stop the tape!
Before Bain bought GT Bicycles in November 1993, the company already had overseas suppliers. This from a August 1993 story in the Orange County Business Journal:
Possibly just as important to GT as the enterprise zone incentives is Santa Ana’s other, less-discussed designation as a foreign trade zone. … That’s a big plus for manufacturers who do a lot of importing or exporting, because it exempts them from customs duties. GT does both, importing parts from Asia, including precision parts from Japan, and shipping an increasing number of finished bikes to China and other growing markets
And GT would sell products manufactured in Asia to … other overseas customers. This from a 1997 10-K form:
GT Bicycles currently distributes bicycle products internationally through 56 independent distributors who supply 65 countries and through its wholly-owned distributors, Riteway Japan, Riteway France and Caratti. The Company sells to its independent international distributors directly from its Santa Ana, California facility. In addition, large orders are shipped in containers directly to these distributors from the Company’s Taiwan and People’s Republic of China suppliers.
The only company moving jobs oveseas was Schwinn, which acquired GT in 1998. And there is no indication in the WaPo piece that Schwinn moved GT jobs or any other jobs overseas after the purchase. The story says Schwinn already had “moved much of its manufacturing offshore as part of a wider trend in the bicycle industry of turning to Chinese labor.”
Apparently in WaPo land, if Romney and Bain invest in a company that a) has overseas operations or b) expands overseas operations or c) is purchased by a company that previous moved manufacturing operations overseas, it somehow means Romney and Bain were stealing jobs from America.
I’ll let Team Romney worry about the political ramifications here. That’s their business.
My real worry is that the Washington Post and the Obama campaign seem to be prompting a destructive neo-protectionism where it is a bad thing for domestic companies to make products overseas or expand their international business or service their overseas customers with local personnel in those markets.
And that is the last thing either the U.S. or global economy needs right now — or ever, for that matter.