THE ROMNEY MODEL, THE BAIN MODEL, THE VULTURE MODELhttp://www.huffingtonpost.com/2012/09/0 ... 52302.html
does not recommend Romney as the Chief Executive of the Nation
- The Bain Model of acquisition and profit taking which uses Romney's self reported theory of "creative destruction" is the leveraged buy out and turn over.
- Risking very little of its own money, Bain organized the take over of a Read More...
- If it was healthy and was likely to get healthier, Bain accessed additional capital investors and using a strategy that focused on cutting costs through labor reductions, wage/benefit reductions, or out sourcing making the company more profitable and thus more attractive to a future buyer- about 2/3 of the businesses Bain tookover.
- For 1/3 of the Bain takeovers, an analysis revealed that the health of the company was iffy.
- In those cases, the strategy seemed he same - new money through loans and cutting costs but accompanied by the selling off or collaterizing of valuable assets.
- But in these cases, the new money became debt passed from one underwriter to another until it could no longer be carried.
- In these cases the dissolution of the company was the usual result.
- In both scenarios Bain did very well via management fees, fees for facilitating loans and sell offs, and when it sold off its interest.
In both of these scenarios Bain made promises to the middle and lower rank of employees and to the small investors that a Bain takeover was the first step in a process that would lead to the company's recovery and growth. Yes, they said, there would be some sacrifices but in the end all would be well.
Bain also made promises to top level management that they would be well taken care of - and they were- golden parachutes for them all. Those promises kept them quiet and cooperative.
I do not want the person who designed, oversaw and implemented this system in charge of our economy. I do not want him in the White House. It is that simple.
This is not venture capitalism, investment in a company to create a new life and energy in the creation of new products and services. It is, as a certain governor of Texas and a certain former Speaker of the House, called it- VULTURE CAPITALISM.
That will not build up our economy.