Mitt Romney’s Bain Capital Exported Jobs

Well, it turns out Mr. Romney did create jobs–in China and India.

Bain Capital folks think union wages impose taxes on consumers. Edward Conrad, Bain Capital, makes this claim in his new book, Unintended Consequences. I suspect Mr. Romney believes that too. His presidential campaign is very much about eliminating collective bargaining. He pushes the “Right To Work” law that eliminates union dues for non-union workers, even as they reap the benefits of union bargaining and collective power. His intent is to turn American workers against “union bosses” that Mr Romney personally loathes. Of course, he wants American labor, at least white male workers, to revere him instead. After all he’s a “job creator” looking out for the prosperity of disenfranchised workers–stewarding their lives. What hypocrisy!

During Romney’s stewardship, Bain Capital successfully enabled American companies to transfer good paying jobs to Chinese and Indians. After all, they can live on 1/10 the pay of the replaced jobs. Good one, Mr. Romney! Soon we will hear, “OK, maybe I didn’t create a lot of American jobs after all. I cut taxes for consumers”! Actually, when folks like Romney, Conrad, and Bain Capital fire union workers, they simply transfer most of that “consumer tax” savings to themselves. After all, that’s the main purpose of Romney’s version of capitalism–transferring existing wealth to themselves.

The procurement of other peoples wealth the way Romney, Conrad, and Bain Capital do it is contemptuous. More depressing is Romney’s hypocrisy when he bashes President Obama’s China policy on the stump as weakness.

Here a typical Romney mush speech: “Well, China has an interest in trade. China wants to, as they have 20 million people coming out of the farms and coming into the cities every year, they want to be able to put them to work. They wanna have access to global markets. And so we have right now something they need very badly, which is access to our market and our friends around the world, have that same– power over China. We– to make sure that we let them understand that in order for them to continue to have free and open access to the thing they want so badly, our markets, they have to play by the rules.” Are we to assume they were “playing by the rules” when Romney’s Bain Capital was racking up the profits while off-shoring American jobs in China? Romney’s political web brochure goes on. “”People say, “Well, you’ll start a trade war.” There’s one going on right now, folks. They’re stealing our jobs. And we’re gonna stand up to China.”” Jeez!

Give us all a break from 0.01% deceit, please. It turns out that Romney really likes the profits China’s version of capitalism brings to him and his investment partners/clients. Three dollars an hour wage scales will do that to opportunists. No stewardship required too! I have no problem with China’s economic development. I believe it’s intention is to provide economic prosperity for it’s people. A prosperous China is a peaceful China. Albeit, there are plenty of Romney like characters in China siphoning off a ridiculous personal share of that expanding productivity and subsequent wealth. Exploitation of folks used to be considered disgusting.  Kind of not Christian– a morality thing. Romney and his ilk now try to tell us its most honorable. You know, the job creator and consumer beneficiary thing.

High Tech, SF Bay Area companies like HP, Apple, Cisco, Google, and many smaller product design firms do both. There is no difference between “outsourcing” or “offshoring”. The intent of both is to reduce production costs, increase business flexibility during business cycles, shorten product introductory time, preserve operational capital for new development, and increase profit margins. The company does not have to hire, train, and use its own workers. This allows executives to focus on markets, products, and competitors.

Most attractive to corporate executives regarding offshore operations is gaining access to host country markets. This is not new. American businesses have been pursuing China’s markets since the 19Th century, “Supplying the oil for the lamps of China”!

Outsourcing work can also take place in contracted fabrication companies located in America too. Albeit, many have moved off shore in the last ten years.  It’s all about the cost of labor and quality in the process.

Here’s generally how offshoring works: Company A designs a new technical machine. It discovers it can sign a “Build To Print” (BTP) contract with a Chinese manufacturer to put that machine into production. Company A turns all its non-proprietary designs (CAD/CAM) over to the Chinese manufacturer. Albeit, the Chinese company my demand access to proprietary designs (technology transfer with permission). Company A does not need to set up a costly production line. This also allows more capital for product market introduction and marketing/sales campaigns.

Since the manufacturer of Company A’s product is in China, it is also considered off-shoring. Thus, the claim that offshoring brings back low cost American products to the US. Mitt Romney’s Bain Capital did this many ways. A) By acting as a “broker” between American Company A and the low-cost Chinese BTP manufacturer; B) Buying a low -cost/high-quality Chinese BTP manufacturer and negotiating offshore or outsourced production contracts with American companies; C) Consulting an American manufacturer to slash labor costs by moving production to an offshore BTP. A typical Chinese BTP is Foxconn Technology, Apple’s large BTP in Taiwan. Apple is a great example how astute brand marketeers know how NOT to pass productivity gains on to consumers. Apples brand demands, and gets premium prices. Thus Apple’s near 50% gross margins and booming stock price.

Instead of trying to get the NYTimes to retract the Bain outsource and offshore story, the Romney campaign should bring the details of their process into the open. Tell us how lucrative offshoring work was for Mitt Romney’s Bain Capital. Also, tell us how many jobs could have been created in the US if work was done here instead. Romney is said to be a gifted data cruncher. He should quickly clarify and detail that part of Bain’s operations. I’m sure it was all about creating productivity gains like successful companies continue to do. The question is, did Romney’s Bain Capital capture most of those gains instead of customers.

It is necessary for the Romney campaign to stop generalizing how he will make America exceptional and prosperous again. Perhaps he truly believes he can encourage (cheerlead) his business executive cartel to hop up the US economy once he’s president. I doubt that false confidence thing. I cannot believe American businesses will invest, big time, unless they see sales growth and/or market opportunities for their goods and services–CUSTOMERS!

So what’s the “unintended consequence” of sending American technology and jobs to China? These guys just don’t seem to understand union members are great consumers! They buy homes, cars, boats, send their kids to college. They keep local businesses humming. They live the American Dream. Some way must be found to make guys like Romney responsible for transferred off-shore jobs. Maybe a new law to guarantee “silver parachutes” for fired workers is appropriate. This should not be provided by taxpayers either.

Following is a new article from the NYTimes that discusses Google’s attempt to manufacture their new home media player, NEXUS Q in the US.

http://www.nytimes.com/2012/06/28/technology/google-and-others-give-manufacturing-in-the-us-a-try.html?_r=1&pagewanted=2&nl=afternoonupdate&emc=edit_au_20120627