Get Red Pepper's email newsletter. Enter your email address to receive our latest articles, updates and news.

×

Bain Capital: the vampire firm that’s just bought our blood supply

Tom Walker looks at the frightening history of the private equity firm

July 21, 2013
3 min read

bain-capitalMitt Romney and the Bain Capital partners pose with dollar bills

The Tory government has just sold off state-owned NHS blood supplier Plasma Resources UK to US private equity company Bain Capital for £230 million. Hang on – Bain, that name rings a bell…

Bain Capital is perhaps best known for having been set up by former US presidential candidate Mitt Romney in 1984, as a spin off from management consultants Bain & Company. It became infamous for taking over companies, saddling them with large amounts of ‘leveraged’ debt and forcing them to make big payments back to Bain. When Romney ran for president last year, horror stories came spilling out about the firm’s practices.

One such story was the fate of American Pad & Paper—known as ‘Ampad’—which Bain bought in 1992, planning to make it ‘leaner’ to extract profits. When the Bain-run firm bought up an Indiana paper plant in 1994, within hours it laid off 250 workers and cut wages and pensions, sparking a bitter strike. As Randy Johnson, a former worker at the plant, remembered last year, ‘They came in and said, “You’re all fired. If you want to work for us, here’s an application.”’

Another former employee, Mike Earnest, said that out of the blue one day the workers there were told to construct a 30 foot stage, not knowing what it was for. ‘Just days later, all three shifts were told to assemble in the warehouse,’ he said. ‘A group of people walked out on that stage, and told us that the plant is now closed, and all of you are fired. Turns out that when we built that stage, it was like building my own coffin.’

Profiting from sackings

Romney and partners squeezed out more than £60 million from the firm, much of it in hefty ‘management fees’. It was unable to keep up interest payments on its debts, started sacking workers and eventually collapsed in 2000. 1,500 jobs were lost in all. In 2007, when he was asked about the layoffs, Romney replied, ‘Sometimes the medicine is a little bitter but it is necessary.’ As he later slipped up and said during the presidential campaign, ‘I like being able to fire people.’

This was a consistent pattern. At GST Steel, Bain made £5 million and 750 jobs were lost. At medical equipment company Dade Behring it was £150 million and almost 3,000 jobs. And at clothing firm Stage Stores they pocketed £100 million at the cost of nearly 6,000 jobs.

Marc Wolpow, a former managing director at Bain, thinks Romney tried to ‘whitewash’ his career to run for president. ‘We had a scheme where the rich got richer,’ says Wolpow. ‘I did it, and I feel good about it. But I’m not planning to run for office.’

Though Romney left Bain in 1999, he has continued to receive big payments from it, including £1.25 million last year. He paid just 15 percent tax on that cash. Today it is unclear just how much money Bain has made for Romney and co, but his fortune is widely thought to top £150 million. According to Nicholas Shaxson, the author of tax havens book Treasure Islands, Romney has up to £18 million stashed in the Cayman Islands alone.

What might Bain have in store for our plasma? If its track record is anything to go by, there’s going to be blood on the carpet.

Red Pepper is an independent, non-profit magazine that puts left politics and culture at the heart of its stories. We think publications should embrace the values of a movement that is unafraid to take a stand, radical yet not dogmatic, and focus on amplifying the voices of the people and activists that make up our movement. If you think so too, please support Red Pepper in continuing our work by becoming a subscriber today.
Why not try our new pay as you feel subscription? You decide how much to pay.
Share this article  
  share on facebook     share on twitter  

Acid Corbynism’s next steps: building a socialist dance culture
Matt Phull and Will Stronge share more thoughts about the postcapitalist potential of the Acid Corbynist project

Flooding the cradle of civilisation: A 12,000 year old town in Kurdistan battles for survival
It’s one of the oldest continually inhabited places on earth, but a new dam has put Hasankeyf under threat, write Eliza Egret and Tom Anderson

New model activism: Putting Labour in office and the people in power
Hilary Wainwright examines how the ‘new politics’ needs to be about both winning electoral power and building transformative power

What is ‘free movement plus’?
A new report proposes an approach that can push back against the tide of anti-immigrant sentiment. Luke Cooper explains

The World Transformed: Red Pepper’s pick of the festival
Red Pepper is proud to be part of organising The World Transformed, in Brighton from 23-26 September. Here are our highlights from the programme

Working class theatre: Save Our Steel takes the stage
A new play inspired by Port Talbot’s ‘Save Our Steel’ campaign asks questions about the working class leaders of today. Adam Johannes talks to co-director Rhiannon White about the project, the people and the politics behind it

The dawn of commons politics
As supporters of the new 'commons politics' win office in a variety of European cities, Stacco Troncoso and Ann Marie Utratel chart where this movement came from – and where it may be going

A very social economist
Hilary Wainwright says the ideas of Robin Murray, who died in June, offer a practical alternative to neoliberalism

Art the Arms Fair: making art not war
Amy Corcoran on organising artistic resistance to the weapons dealers’ London showcase

Beware the automated landlord
Tenants of the automated landlord are effectively paying two rents: one in money, the other in information for data harvesting, writes Desiree Fields

Black Journalism Fund – Open Editorial Meeting
3-5pm Saturday 23rd September at The World Transformed in Brighton

Immigration detention: How the government is breaking its own rules
Detention is being used to punish ex-prisoners all over again, writes Annahita Moradi

A better way to regenerate a community
Gilbert Jassey describes a pioneering project that is bringing migrants and local people together to repopulate a village in rural Spain

Fast food workers stand up for themselves and #McStrike – we’re loving it!
McDonald's workers are striking for the first time ever in Britain, reports Michael Calderbank

Two years of broken promises: how the UK has failed refugees
Stefan Schmid investigates the ways Syrian refugees have been treated since the media spotlight faded

West Papua’s silent genocide
The brutal occupation of West Papua is under-reported - but UK and US corporations are profiting from the violence, write Eliza Egret and Tom Anderson

Activate, the new ‘Tory Momentum’, is 100% astroturf
The Conservatives’ effort at a grassroots youth movement is embarrassingly inept, writes Samantha Stevens

Peer-to-peer production and the partner state
Michel Bauwens and Vasilis Kostakis argue that we need to move to a commons-centric society – with a state fit for the digital age

Imagining a future free of oppression
Writer, artist and organiser Ama Josephine Budge says holding on to our imagination of tomorrow helps create a different understanding today

The ‘alt-right’ is an unstable coalition – with one thing holding it together
Mike Isaacson argues that efforts to define the alt-right are in danger of missing its central component: eugenics

Fighting for Peace: the battles that inspired generations of anti-war campaigners
Now the threat of nuclear war looms nearer again, we share the experience of eighty-year-old activist Ernest Rodker, whose work is displayed at The Imperial War Museum. With Jane Shallice and Jenny Nelson he discussed a recent history of the anti-war movement.

Put public purpose at the heart of government
Victoria Chick stresses the need to restore the public good to economic decision-making

Don’t let the world’s biggest arms fair turn 20
Eliza Egret talks to activists involved in almost two decades of protest against London’s DSEI arms show

The new municipalism is part of a proud radical history
Molly Conisbee reflects on the history of citizens taking collective control of local services

With the rise of Corbyn, is there still a place for the Green Party?
Former Green principal speaker Derek Wall says the party may struggle in the battle for votes, but can still be important in the battle of ideas

Fearless Cities: the new urban movements
A wave of new municipalist movements has been experimenting with how to take – and transform – power in cities large and small. Bertie Russell and Oscar Reyes report on the growing success of radical urban politics around the world

A musical fightback against school arts cuts
Elliot Clay on why his new musical turns the spotlight on the damage austerity has done to arts education, through the story of one school band's battle

Neoliberalism: the break-up tour
Sarah Woods and Andrew Simms ask why, given the trail of destruction it has left, we are still dancing to the neoliberal tune

Cat Smith MP: ‘Jeremy Corbyn has authenticity. You can’t fake that’
Cat Smith, shadow minister for voter engagement and youth affairs and one of the original parliamentary backers of Corbyn’s leadership, speaks to Ashish Ghadiali

To stop the BBC interviewing climate deniers, we need to make climate change less boring
To stop cranks like Lord Lawson getting airtime, we need to provoke more interesting debates around climate change than whether it's real or not, writes Leo Barasi


668