The news this morning is that the Obama campaign has launched the above attack on Romney vis-à-vis Bain Capital, an attack which even former Obama advisor Steve Rattner deems unfair just on its face:
National Review provides some context for why this steel company went bankrupt (hint: Unions):
A January Reuters report on the company noted that one of the company’s problems may have been that it was unionized:
Charles Bradford, an analyst at Bradford Research, blames the union, in part, for the failure of GS Industries to survive in the new global marketplace.
“If you look at the steel companies that went under at the time, all of them were unionized,” he said. “I’m not saying this was the only factor — these firms faced other headwinds such as cheap labor and a strong dollar … but the unions held them back.”
And Bain Capital’s statement to Reuters pointed out that 44 U.S. steel companies had become bankrupt during the same era.
National Review also points out that Romney wasn’t even working at Bain Capital when this occurred. He quit 2 years earlier to work for the Olympics.
After National Review posted this, they had a reader email them who used to work for this steel company and offered even more context on how unions destroyed this company:
I nearly choked on my Cheerios when I read that GST employees were blaming Bain for their downfall. I worked at GST Steel in Kansas City for four months in 1997 immediately after leaving the Navy.
Why only four months? Quickly after I started, I surprised to learn that several of my fellow USW Local 13-represented employees, mostly millwrights and electricians, we’re making between $100-130k. This was mainly due union-mandated overtime which, at least on a few occasions, consisted of the employees bringing in sleeping bags and pillows and sleeping in the shop. It would be hard for any company to stay competitive while paying double-time union wages to get their beauty sleep, but that’s not the half of it. The union employees obviously didn’t think they had it easy enough, so they went on strike in March of ‘97. The plant shut down for a couple of weeks until it re-started under the operation of management and non-union workers. The strike lasted a couple more months. I had a family to support, so I couldn’t afford to wait. I took another (non-union) job with another company. They shuttered the plant for good a few years later.
That’s Bain’s fault? Just classic.
UPDATE: Added a very relevant portion from the NRO article that Romney wasn’t even working for Bain when they bought GST.