And now, a guest post from my dad. He’s been listening to all this talk about how bad Bain Capital is, and he’s not buying it:
by Bob Medlock
In 2008, I retired from a company that has been around since 1946. It started off in a garage near Atlanta with a few employees. By the time they hired me in 1986, they had grown through market share and acquisitions to over 9,000 employees. By the late ’90s, the company manufactured products in 24 factories, mostly in North America, with over 11,000 employees. It reached a billion dollars in sales in 1996.
But all was not well. Management had become fat, dumb, and not so happy. Costs and competition had eaten into profits. Through a painful series of shutdowns and consolidations, today the company is down to 8 plants, primarily in the US and Mexico, but is now profitable and growing again. A mismatched division with 3,000 employees was spun-off in 2007.
Did some people lose jobs? Of course they did. Unproductive plants were closed, and most of those employees were not transferred. Today the company employs 6,000 “associates.” Are they glad all those other folks lost their jobs? You’d have to take a poll, but I would guess most are thankful for the consolidations and glad they have jobs in this economy. I know the market approves. Stocks are back in the high $50s, up from a low of $12 in 2001.
The company was not purchased by Bain Capital. However, with the help of many outside consultants (some good and most redundant), draconian upper- and middle-management changes, and brutal plant closings, the results match or exceed any of Bain Capital’s. Was the medicine semi-toxic? Yes, but the patient survived and is healthier than before. Last year, sales were almost $1.9 billion.
I check on my old facility 3 or 4 times a year. Many of my buddies are still gainfully employed. Head count has actually gone up in the face of this dismal Obama economy. Is there bitching and grousing? Do they yearn for the good ol’ days? You bet.
But every two weeks they get a paycheck.
Some companies become stagnant and die. Others apply Bain Capital-style changes and survive and grow. In the long run, which style is better for the country: death or growth?
But it’s not fair!!
By the way: Obama used to think private equity was fine and dandy too.