Sunday, August 26, 2012
Bless the Turnaround Specialists!
By Terry Paulson
If you have not already summed up the Democratic talking points to usher in four more years of liberal "hope and change," you soon will as the political attacks drone on. One that remains a liberal favorite is how Mitt Romney's years at Bain Capital ushered in bankruptcies, cut thousands of jobs, and contributed to the deaths of some who lost healthcare coverage in the wake of these "greedy" takeover efforts. .
Writing in the Wall Street Journal, Daniel Henninger claims: "Not only did Bain Capital save America, but no matter what turn Mitt Romney's political career takes, Bain Capital may stand as the best of Mr. Romney's lifetime contributions to the nation's economic well-being. If only he'd tell the story. ...It was called the Greed Decade, with asset-stripping barbarians at the gate. Virtually everything about this popular stereotype is wrong. Properly understood, the 1980s, including Bain, were the remarkable years when an ever-resilient America found a way to save itself from becoming what Europe is now—a global has-been."
Mitt Romney does tell his story. Take time to read Romney’s own defense to Obama’s false attacks at mittromney.com.
What did Bain Capital do? Like others, they took invested funds and re-invested them in smaller successful companies that needed more capital to grow from good to great. Companies like Staples, Sports Authority, Steel Dynamics, and Bright Horizons.
Bain Capital also looked for companies with potential that were on the verge of bankruptcy because of ineffective leadership and vision. They bought the companies, investing capital and new leadership in an effort to turn the company around. Many succeeded and ultimately became profitable again, hiring many new employees. Some, like the GS Technologies steel mill and the Ampad paper plant in Marion, IN, eventually failed and were closed. But the influx of funds and new leadership kept those operations and positions viable for many additional years.
What do turnaround practitioners do? They provide expertise over a broad spectrum of services from recovery, cash-flow and financing to the actual turnaround of an ailing concern. Some are called "Company Doctors" or "Business Rescue or Change Consultants." They temporarily replace a company's leaders taking over the decision-making process of the organization to guide it back toward profitability and a secure future.
Their job is not to lose jobs or bankrupt companies; it is to turn them around. Like a paramedic, the talent lies in making critical decisions quickly in order for the patient to have the best chance at recovery. Operating in the eye of the storm, the turnaround leaders must deal equitably and effectively with angry creditors, scared employees, wary customers and very nervous board of directors and investors. This is no assignment for the faint-hearted.
Will all succeed? Of course not, the free-enterprise system that has helped forge America's economic capitalizes on "creative destruction." While we often hear about the greatest entrepreneurial successes — Microsoft, Starbucks, and Apple — we rarely hear about the countless failures and the workers, leaders and investors who lost jobs and capital when they failed. Constantly, underperforming or outdated companies fall by the wayside as more innovative ones take their place. Workers who keep upgrading their skills to meet the challenge of change find a place in that future by adapting. Those who rest in sending around resumes for outdated skills or trust in government entitlements do not.
Mitt Romney has shown his expertise as a turnaround specialist at Bain Capital and with the 2002 Winter Olympics. He is a leader ready to make the tough decisions America is facing. His selection of Rep. Paul Ryan speaks to his wisdom of getting the right leaders on the bus. Both have been men of action--something needed in Washington now.
Some Democrats have defended Bain Capital. Democratic mayor of Newark, N.J., Cory Booker, knows Newark needs more business and investment, not more government. Though repudiated by the Obama Campaign team, Booker rejected the Bain attack ads on NBC's "Meet the Press: "I'm not about to sit here and indict private equity.... I live in a state where pension funds, unions and other people are investing in companies like Bain Capital. If you look at the totality of Bain Capital's record, they've done a lot to support businesses, to grow businesses."
Let me end with the closing comment from Daniel Henninger's WSJ column:
"Voters don't want one man's story. They want someone who understands how the next 10 years can produce an American economy that offers the opportunities for them that the 1980s produced for Mitt Romney." The Democrats want to see Romney's tax returns; Romney wants your own tax returns to improve. Do you want more of the same inept leadership and uncontrolled spending, or do you a turnaround specialist ready to make the tough decisions in the White House?
To read another article by Terry Paulson, click here.
Posted by Brett at 10:27 PM