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AdWatch: Obama's campaign highlights Romney's work at private equity firm Bain Capital
NEW YORK (AP) ' TITLE: "Steel"
LENGTH: Two minutes and six minutes.
AIRING: Colorado, Iowa, Ohio, Pennsylvania, Virginia
KEY IMAGES: The Obama campaign ad features interviews with several former employees of GST Steel, a Kansas City, Mo.- based company bought in 1993 by Bain Capital, the private equity firm Republican Mitt Romney co-founded and was running at the time of the purchase. The workers describe GST before Bain as a robust employer of several thousand people who received good wages and benefits. "That stopped with the sale of the plant to Bain Capital," one steelworker says, over images of Romney on the campaign trail saying "I know how business works."
The workers and a union representative who handled negotiations for the workers then describe how Bain's management reaped profits as they drove GST into bankruptcy, forcing the plant to close and lay off 750 workers. "It was like a vampire came in and sucked the life out of us," a worker says, over images of the abandoned plant and newspaper accounts of the layoffs.
"We view Mitt Romney as a job destroyer," said one worker. Another said: "If he's going to run the country the way he ran our business I wouldn't want him in there. He'd be so out of touch with the average person in this country."
ANALYSIS: The hard-hitting ad aims to undermine the central premise of Romney's candidacy: that his experience in the business world gives him the knowledge and tools necessary to create jobs and revive the economy. The former Massachusetts governor claims to have created 100,000 jobs through Bain-backed businesses.
By airing an unusually long ad in swing states less than six months before the election, the Obama campaign is clearly eager to define Romney for voters before he is able to do so himself.
The ad is on generally solid factual ground. But it fails to mention the overall decline in the steel industry during the 1990s and the fact that Romney had left Bain two years before GST's bankruptcy in 2001.
Private equity firms like Bain buy companies with loads of debt, cut costs and do other things to make them more efficient. They then cash out by taking the companies public on a stock exchange or, recently, selling them to other buyout firms.
The business model thrived for years, leading to the creation of more buyout firms and more bids for companies.
Obama's deputy campaign manager, Stephanie Cutter, said Monday that "no one is questioning the private equity industry as a whole." But by using GST as an example, the campaign argues that Romney's years at Bain were spent maximizing profits for himself and other investors rather than creating middle-class jobs. Using unemployed steel workers to tell their personal stories, the ad packs considerable emotional heft and illustrates the human costs that come with a company's failure.
Romney's tenure at Bain became an issue during the Republican nominating contest when Texas Gov. Rick Perry labeled Romney a "vulture capitalist" and brought up GST's closure as an illustration. A super PAC backing Newt Gingrich ran a 28-minute film blaming Bain for the demise of several companies. But that video was riddled with so many inaccuracies that even Gingrich distanced himself from it.
The Obama campaign ad is on safer ground by focusing on a single company and highlighting specific ways Bain's management affected workers, such as cutting their pensions and health care benefits as the company faltered.
But Bain's management was not the only reason GST suffered. The availability of alternative materials and huge wave of imported steel, particularly from Asia, cut U.S. steel production during the 1990s and led to a string of bankruptcies of steel-related companies.
The ad also neglects to mention that GST's bankruptcy took place in 2001, two years after Romney had relinquished day-to-day management of Bain in order to head up the 2002 Olympic Games in Salt Lake City. Cutter insisted that Romney "set this in motion" and noted he was still earning investment income from Bain at the time despite his hiatus from full-time involvement.
Associated Press writer Bernard Condon and AP News Researcher Julie Reed contributed to this report.
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