Sun Oct 14, 2012, 09:42 PM
we can do it (5,638 posts)
'I'm sick to my stomach': anger grows in Illinois at Bain's latest outsourcing plan. -Guardian UK
'I'm sick to my stomach': anger grows in Illinois at Bain's latest outsourcing plan
The Sensata plant in Freeport is profitable and competitive, but its majority owner, Bain Capital, has decided to ship jobs to China – and forced workers to train their overseas replacements
But, in the midst of the 2012 presidential election, Freeport is different. For Sensata is majority-owned by Bain Capital, the private equity firm once led by Mitt Romney, that has become a hugely controversial symbol of how the modern globalised American economy works. Indeed, Romney still owns millions of dollars of shares in the Bain funds that own Sensata.
So as Sensata strips out costs by sacking American workers in favour of Chinese ones, the value of Romney's own investments could rise, putting money into the pockets of a Republican challenger who has placed job creation in America at the heart of his bid for the White House.
The story of how Bain became involved in a car factory in a small town amid the rolling farmland of northern Illinois is emblematic of modern financial wheeling and dealing.
Bain bought the firm that was to become Sensata in 2006, when it was the Texan arm of a Dutch company. It then floated it on the stock exchange in 2010, but kept a majority stake. Sensata came to own the Freeport plant at the beginning of 2011 as part of a wider purchase of a car parts business from Honeywell.
Sensata spokesman Jacob Sayer said closing the Freeport plant to cut costs was a key element of the Honeywell deal. "If that had not been part of the strategy, then the deal would not have been so attractive," he said.
Bain has declined to comment. But it has made a lot of money from owning Sensata, quadrupling its initial 2006 investment. In business circles that focus on the bottom line is all that matters. But, not surprisingly, it cuts less ice in Illinois.
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