Romney Invested In Company That Is Outsourcing Jobs, Forcing Workers To Train Their Chinese Replacements

By Travis Waldron/Think Progress

Workers at Sensata Technologies, a business based in Freeport, Illinois, have been protesting Mitt Romney’s campaign stops across the country all summer because the company, which is owned by Bain Capital, is laying off workers in order to hire employees in China. Bain took control of Sensata in 2006; last year, it took over the Freeport plant and announced that it would layoff 165 workers and close it.

Some of the workers, according to Sensata employees, have been forced to train their Chinese replacements, adding insult to the injury that was their looming job loss.

Bain’s role in the layoffs hasn’t been a secret. But given that it took control of Sensata and the plant well after Romney’s departure from the firm, the candidate has thus far steered clear of the controversy, only drawing protests from the workers who want him to step in and stop the plant’s closure. But according to documents detailing Romney’s finances obtained and published yesterday by Gawker, his connection to Sensata is much more direct.

Romney held a direct investment in Sensata through one fund titled “Bain Capital Fund IX, L.P.,” dated December 31, 2009, meaning he has likely financially benefited from Bain’s ownership of the company in the past, and could benefit from the plant’s closure and the outsourcing of the jobs to China. According to his 2011 personal financial disclosure, Romney still holds the Bain Capital fund that contains the Sensata investment.

Romney has a history of outsourcing jobs as the chief executive of Bain Capital. The Washington Post reported in June that under Romney’s leadership Bain “invested in a series of firms thatspecialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.” Other companies in which the firm invested sent jobs to Mexico and other low-wage countries around the world.

While that history might be politically toxic, Romney’s proposals wouldn’t stop the outsourcing of American jobs. In fact, his plan to reform the corporate tax code by instituting a territorial tax system would make it easier for American companies to outsource jobs, while at the same time encouraging them to store even more money in offshore tax havens.

Sensata workers, meanwhile, are planning to protest Romney and Bain’s involvement in Sensata at the Republican National Convention next week.

How Romney Would Make It Easier For American Companies To Avoid Taxes, Outsource Jobs

By Travis Waldron/Think Progress

Republican presidential candidate Mitt Romney’s plan to overhaul the American corporate tax code would “exacerbate the worst features of our current tax system” by giving corporations more than $1 trillion in tax breaks and providing an incentive to outsource jobs and stash profits overseas, according to Seth Hanlon, the director of fiscal reform at the Center for American Progress Action Fund.

While the United States already provides an incentive for companies to store profits in offshore tax havens instead of investing those profits at home, Romney’s plan to shift the U.S. to a territorial tax system would make the situation even worse, Hanlon wrote in a report published today:

Gov. Romney’s proposed exemption for foreign profits would exacerbate the worst features of our current tax system. It would:

– Enhance the tax code’s rewards for moving jobs and investments overseas

– Provide a gratuitous windfall to some of the very companies that have already shifted jobs and profits overseas

– Further invite the offshore tax haven abuse that deprives the U.S. Treasury of tens of billions of dollars in revenue every year

The current system already encourages investment overseas, since corporations are allowed to defer tax payments on foreign profits until they “repatriate” them to the United States. Romney’s plan would exempt companies even from this tax, which will cost the U.S. $130 billion over the next decade. “When combined with Romney’s proposal to slash the top corporate rate from 35 percent to 25 percent, which would cost more than $900 billion, it pushes the total corporate tax cuts in the Romney plan to over $1 trillion,” Hanlon writes.

Romney’s reforms could also cost America jobs and invite further abuse of offshore tax havens, Hanlon writes. Because corporations would know they are permanently free from paying American taxes if they invest abroad, Romney’s plan would encourage such investments. Those investments would lead to 800,000 jobs in other countries, “potentially displacing U.S. jobs.” Economist Kimberly Clausing, Hanlon notes, “estimates that under a territorial tax system, even more profits of U.S.-based companies would shift to tax haven countries,” a problem that already costs the average American taxpayer $434 a year.

Bain Capital, the company Romney founded, routinely outsourced jobs to low-wage countries like Mexico, China, and Ireland while Romney was its chief executive, and it also utilized offshore tax havens in Bermuda and the Cayman Islands to help investors avoid American taxes. Now, his corporate tax reform plan would make it even easier for companies to do the same under the guise of “competitiveness.”

Why Romney Couldn’t Convince The Washington Post To Retract Its Story About Bain Offshoring Jobs

By Pat Garofalo/Think Progress

The Mitt Romney campaign met with editors of the Washington Post today in an attempt to get the paper to retract a story about how the private equity firm Bain Capital helped outsource jobs when Romney was its CEO. Initially, the campaign merely admonished the Post for not distinguishing between “outsourcing” and “offshoring,” but today it brought a set of slides in an attempt to refute the entire premise of the story.

However, the evidence that the campaign provided does not contradict the paper’s reporting, which was gleaned from documents filed with the Securities and Exchange Commission. Instead, the campaign’s document simply includes assertions from executives of the companies in which Bain invested, claiming that they did not outsource jobs.

Left unsaid is that these executives have a vested interest in not being seen as offshoring jobs. “None of these 6 companies sent jobs overseas under Bain Capital during Mitt Romney’s tenure, in fact they added jobs,” the campaign’s document claims, providing no sources of evidence. Here are some of the slides:

The Post is standing by its story.

Did Romney help ship jobs overseas

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Top ‘U.S.’ Corporations Outsourced More Than 2.4 Million American Jobs Over The Last Decade

By Zaid Jilani 

A Washington Post/ABC News poll released this morning finds that 44 percent, a plurality, of Americans think the economy is getting worse, rather than staying the same or getting better. With unemployment hovering around 9.6 percent while economic inequality is at levels not seen since the Depression, many Americans feel as if the economy is leaving them behind.

The Wall Street Journal reports today that Corporate America certainly isn’t doing its part to help bring America out of its economic malaise. The paper surveyed employment data by some of the nation’s largest corporations — General Electric, Caterpillar, Microsoft, Wal-Mart, Chevron, Cisco, Intel, Stanley Works, Merck, United Technologies, and Oracle — and found that they cut their workforces by 2.9 million people over the last decade while hiring 2.4 million people overseas.

The paper notes that this is actually a sharp reversal from trends in the late 1990s, when these major companies were creating more jobs in the United States than overseas. Yet by 2001, things took a turn for the worse, and these corporations have been adding more jobs abroad than at home, as is illustrated here:

As you can see from the chart, the economic recession has had little impact on Corporate America’s patriotism. In fact, in 2009, representatives of many of the nation’s most powerful corporations attended the “2009 Strategic Outsourcing Conference” to talk about how to send American jobs overseas. Conference organizers polled the more than 70 senior executives who attended the conference about the behavior of their companies in response to the recession. The majority said their companies increased outsourcing in response to the downturn, with only 9 percent saying they terminated some outsourcing agreements:

Another question asked of the executives found that the top reason for companies to outsource was to “reduce operating costs” (46 percent of respondents). Only 12 percent of respondents said their reason for outsourcing was “access to world class capabilities.” This means companies are outsourcing to save themselves money, not make better products.

Unfortunately, for some of these companies, sending American jobs overseas isn’t enough. They also want to bring the profits back into the United States with as little tax liability as possible. Cisco Systems, which had 26 percent of its workforce abroad at the start of the decade but 46 percent of its workforce abroad by the end, is currently involved in a lobbying campaign titled “Win America” calling for a tax repatriation holiday that would let big corporations “bring money they have stashed overseas back to the U.S. at a dramatically lower tax rate.” A similar tax break in 2004actually increased the amount of money companies store overseas.