After Bain firing, sick workers struggle

Tue, 16 Oct 2012 18:53:00 +0000

For many Americans Mitt Romney’s long campaign has been a primer in private equity, the quiet business of buying and selling companies in which the candidate made his fortune. Romney has talked up his role as a job creator at companies like Staples and Dominos Pizza and journalists have learned about other investments Romney would rather not discuss.

In January, Reuters published an investigation into another of those investments, a 1993 takeover of Kansas City, Mo., steel mill Worldwide Grinding Systems:

It was a gamble. The old mill, renamed GS Technologies, needed expensive updating, and demand for its products was susceptible to cycles in the mining industry and commodities markets.

Less than a decade later, the mill was padlocked and some 750 people lost their jobs. Workers were denied the severance pay and health insurance they'd been promised, and their pension benefits were cut by as much as $400 a month.

What's more, a federal government insurance agency had to pony up $44 million to bail out the company's underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees.

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After Bain firing, sick workers struggle