Mitt Romney has made his success in the business world a central theme of his presidential campaign, suggesting that it demonstrates a level of economic understanding that President Obama cannot match.
But as the Washington Post documents, Romney and his company, Bain Capital, achieved that success in part by taking jobs once held by American workers and moving them overseas to places such as China and India, where those jobs could be performed more cheaply:
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.”….
The Post documents a series of cases in which Bain-related companies relocated customer-support, call-center and manufacturing operations overseas to cut costs and raise profits. In addition, Bain was deeply involved in the creation and expansion of Modus Media, which specialized in helping other companies relocate manufacturing facilities overseas:
“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.”
For Mitt Romney the business person, such a record would be unremarkable. A lot of people have made a lot of money in the last 25 years by moving jobs offshore, and if Romney and Bain Capital were pioneers in the field, as the Post suggests, there was nothing unusual, illegal or even unethical in what they did. Speaking strictly in business terms, their job was to wring out inefficiencies and maximize shareholder profit in a global economy, not to protect the jobs of American workers, and as the Romney campaign likes to stress, they did their job very well and were well-rewarded for it.
For Romney the presidential candidate, however, the situation becomes more complicated. It’s one thing for Lee Raymond, then head of Exxon Mobil, to say that “I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.” In a business sense that may be understandable; in another sense it comes across as a grating reminder that the search for profit makes no allowance for national loyalty.
In Romney’s case, will an attitude that’s acceptable and perhaps even necessary in a modern business executive be equally acceptable in a person seeking to lead the country? For some Americans — especially those who have watched as their jobs were moved overseas — the details of how Romney achieved his remarkable financial success may turn out to matter a great deal.
– Jay Bookman