Reposted from the Campaign for America’s Future blog
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Is This Why Romney Won’t Talk To Sensata Workers Whose Jobs Are Being Shipped To China?
On the campaign trail Romney says we shouldn’t ship jobs to China and should “crack down” on China trade problems. But he refuses to help or even meet with the Sensata workers whose jobs are being shipped to China right now.
Why the refusal to line up his actions with his promises? A must-read, must-read, must-read news report explains how part of Romney’s $450,000/week income comes from … get this … shipping jobs to China!
First, the background…
Sensata - Happening Today
Mitt Romney started the “private equity” firm Bain Capital. Bain purchases companies using “leveraged buyouts” that borrow huge sums using the purchased company’s own assets as collateral, uses the borrowed money to immediately pay itself, then cuts costs by doing things like sending jobs to China, cutting wages and manipulating tax rules to cut taxes owed, along with standard big-business practices like consolidating business units, taking advantage of economies of scale not available to smaller competitors, squeezing distribution channels for price cuts, and other practices that bring competitive advantages. (See So DID Mitt Romney Really “Create Jobs” At Staples?) After reorganizing the purchased companiesBain then “harvests” them for profit.
One company Bain Capital purchased is Sensata, a sensor manufacturer that makes key components for our automobile supply chain. Sensata then announced it is closing a factory in Freeport, Ill., and sending the manufacturing and jobs to China. (China is engaged in efforts to dominate American auto supplies. See China Cheating Costs 400K Auto Parts Jobs and Why The Latest Trade Complaint Against China Matters.)
Bain/Sensata brought in Chinese workers and made the Freeport workers train them. Bain/Sensata is moving the equipment out of the Freeport factory and shipping it to China right now. The Freeport employees have set up a camp outside the factory that they call Bainport and are trying to stop the Bain trucks that are moving the equipment out for shipment to China. Supporters were arrested this week, trying to stop those trucks.
The Sensata employees heard Romney on the campaign trail, and somehow got the idea that he opposes sending our jobs to China. So they asked him to come to Freeport/Bainport and help them. Read on to learn about Romney’s response to the Sensata workers, and how Romney is actually making big money right now from shipping their jobs to China.
“The week before they came they took the American flag down outside the plant. The week after they left they put it back up.”
The China Problem – The Public Gets It
During the George W. Bush administration we lost more than 50,000 factories and at least 6 million manufacturing jobs directly to China. (Never mind the effect on the supply chains, the grocery and clothing stores where those people shopped, etc… The foreclosures, the bankruptcies, the misery…) Thanks, George!
This chart from Think Progress shows what happened to our manufacturing base immediately after Bush took office. Seriously, look at this chart and see if you can just guess why we have such a terrible economy today:
The public gets it – the problem is China. Polls show that the public overwhelmingly – by percentages in the 80s and 90s for Democrats and Republicans alike – understands that a huge part of our economic troubles come from the was we have been shipping jobs, factories and industries to China.
ABC News, from July: ‘Made In America’ Policies Hugely Popular, Survey Shows
Nearly 9 out of 10 Republicans and Independents and 91 percent of Democrats said they support “Buy America” preferences, according to the survey, which was conducted by the Democratic-leaning Mellman Group.
When it comes to trade with China, the poll found that voters emphatically support tough action on Beijing’s cheating on currency and other trade obligations.
Another, from a key state: New Zogby Poll: Ohio Voters Favor Boycott of China Over Unfair Trade.
Romney Can Read Polls
One thing the Romney campaign can do is read polls. So Mitt Romney sees the polls and says he wants to do something about China.
The Hill: Romney, campaigning in Ohio, vows to stop China’s ‘cheating’ trade practices
Bloomberg: Romney Ad Says He Will `Stand Up to China’: Video
The Hill: New Romney ad says Obama won’t ‘stand up to China’ on trade, jobs
So, on the campaign trail Romney says he will stand up to China’s cheating, and opposes companies that send jobs and factories to China.
Romney Refuses To Help – Even Talk With – Sensata Workers
Romney wants to be President, and polls show that the public overwhelmingly wants something done about the problem of jobs and factories moving to China, and the resulting was pressure that puts on the rest of us and on our economy. So Romney says he will do something about it.
But Romney’s current actions are opposite his current words. He complains about China currency manipulation, but refusesto ask the Republican House leadership to bring the China currency bill up for a vote, and refuses to ask more than 60 Republican co-sponsors of that bill to sign a “discharge petition” that would force a vote.
And Romney refuses to even meet with Sensata workers. When asked if Romney would help these workers the Romneycampaign says Romney will not do it:
“Governor Romney has not worked at Bain Capital for over a decade, but for four years President Obama has been presiding over an economy that is creating too few jobs and sending more jobs overseas. Despite the President being invested in Sensata through his personal pension fund, and the government owning a major Sensata customer in GM, President Obama has not used his powers to help this situation in any way.”— Curt Cashour, Romney Campaign Spokesman.
Why is Romney saying he wants to do something about the trade problem with China, but refusing to actually do anything about the trade problem with China? Here is one possible reason why.
Romney Making Big Money From Bain Sending Sensata Jobs To China
A must-read news report today by Sharon LaFraniere and Mike McIntire in The New York Times explains. As Romney Repeats Trade Message, Bain Maintains China Ties (emphasis added, for emphasis),
Mr. Romney also has millions invested in a series of Bain funds that have a controlling stake in Sensata Technologies, a manufacturer of sensors and controls for vehicles, aircraft and electric motors that employs 4,000 workers in China. Since Bain took over the operation in 2006, its investment has quadrupled in value. Bain continues to own $2.6 billion worth of Sensata’s shares.
Two years ago, Sensata bought an operation that made automobile sensors in Freeport, Ill. At the first meeting with the plant’s 170 workers, Sensata managers announced that by the end of 2012 all the equipment and jobs would be relocated, mostly to Jiangsu Province. Workers have staged demonstrations, pleading for Mr. Romney to intervene on their behalf.
Chinese engineers, flown to Freeport for training on the equipment, described their salaries as a pittance compared with Freeport wages. Tom Gaulrapp, who has operated machines at the factory for 33 years, said he fears he will go bankrupt after he loses his job on Nov. 5.
“This goes to show the unbelievable hypocrisy of this man,” he said of Mr. Romney. “He talks about how we need to get tough on China and stop China from taking our jobs, and then he is making money off shipping our jobs there.”
So there you have it. Mitt Romney says he opposes sending jobs to China, and says he will “crack down” on China. But he refuses to do things that he could do right now that would make an actual difference right now. And it turns out that right now he is making big money from Sensata and other companies that are sending people’s jobs to China right now.
Laying off American workers – usually shipping the jobs to China – and pocketing their wages for themselves is the story of the rise of the wealth of the 1%, and the decline of the American middle class. It is the Romney/Bain/Sensata business model. And the remaining workers have to do the jobs of the laid-off workers, often for lower pay, and are threatened with losing their jobs, too, if they don’t like it.
Please read the entire New York Times report, As Romney Repeats Trade Message, Bain Maintains China Ties. There is much more there about Romney, China, Bain and the huge gap between what Romney says on the campaign trail, and how Romney made his current $450,000/week income and how Bain Capital still makes its money.
Visit the Bainport blog for pictures and details about the Sensata workers who are trying to stop the Bain trucks from shipping the equipment from the factory to China.
Bain sending factories to China is just another example how fiat money is distorting the economy. The gov’t prints money out of thin air to fund wars, overseas military bases, consumption with debt and financial speculation that pushes up costs in the US. Then companies like Bain which borrow money from banks that create money out of thin air buy up companies in the US and then ship the factories to China who uses their monetary policy to print money to pay for the transfers of industries to China. Trade with China has it problems but is the result of the unsound monetary system we have. Generally anytime a country inflates faster then their trade partners trade deficits result. Also inflation and wasteful speding causes budget deficits because future costs become higher than anticipated.
Fiat money has allowed the US industrial base to decline and to be offshored. The following excerpts from the article, Gold: The Protector and Creator of Jobs, linked below explains how fiat money has distorted the economy:
Had Nixon not gone off gold in 1971, China would have taken generations to create its industrial base. It would have been necessary for China to accumulate capital slowly, because its exports to the US would have been limited by the need for the US to pay up with gold for the amount by which Chinese exports exceeded its imports from the US.
The Chinese would have had to buy as much from the US, as they sold to the US; and since they were so terribly poor, there was not much they could have bought from the US.
The US would never have allowed China to drain US gold from the Treasury by selling more to the US, than the US sold to China. But since payment was in fiat dollars and not in gold, the destructive effect of huge Chinese imports was not considered important by policy makers. And so, the US sailed into unemployment and had a great time doing it. Only now, that the party is over, are the grim facts visible: no jobs! Manufacturing is decimated.
The fiat dollar – unanchored to gold – was the greatest strategic gift that the US could have made to China. Now, they have a huge industrial base and the US has Oh, so little
References:
Gold: The Protector and Creator of Jobs
http://www.goldstandardinstitute.com/Article.aspx?UniqueName=HSP20120420
Very well researched and documented piece. I devoted some time to examining all the links, many would be familiar to the subscribers here.
One point; Bush2 inherited Clinton’s giving permanent MFN to Red China and Red China joined the WTO under Clinton. Not that Bush2 did anything about this, just the facts.
Of course, those actions by Tricky Bill led to the drop in US manufacturing jobs and factories, that were sent to the Communists.
re: “The China Problem — The Public Gets It.”
If only.
The fact that 90 plus percent of Americans favor “Buy American” preferences is a meaningless statistic. If it had any real meaning, Americans would have simply refused to buy Chinese products while U.S. made alternatives were still available. Now that there are almost no U.S. alternatives to Chinese products, it is too late to crank up a “Buy American” program.
Over thirty years ago, UAW members were paying $10 bucks apiece for an opportunity to take a sledge-hammer to a Honda to protest Japanese imports. It had zero impact then and would have even less now. Back at the factory, one-third of the cars in the employee parking lot were German or Japanese.
People might tell a reporter that they are all “Buy American,” but when it comes to spending their own money, they will buy whatever appears to be the best deal for them, and the country be damned.
It was our government that opened the door to cheap products from a communist, predatory, nation which has zero regard for human rights, worker safety, product safety or the environment. Only our government can close that door. The solution is “balanced trade” as proposed by Warren Buffett in 2003. You can Google “balanced trade.”
If the US never left the gold standard, it would have forced the US not to import too much more than it exports because as gold was drained it would have forced action like higher interest rates to encourage more savings to reduce imports and higher tariffs on countries that were devaluing their currency with intent of exporting their unemployment.
If we had sound money backed by gold then the terms of trade would be different. Today because of the wasteful money printing, the US winds up exporting factories, jobs, transfering technology and trades ownership of US companies to import consumer goods pay for financial speculation, wars and overseas military bases. The terms of trade today clearly show capital consumption. Technically all trade is balanced trade because you have to trade something to get something which in the US case it exports the cow for milk which is a horrendous terms of trade.
I strongly recommend reading the article linked below:
Gold: The Protector and Creator of Jobs
http://www.goldstandardinstitute.com/Article.aspx?UniqueName=HSP20120420
Mo,
Interesting article. Thanks for the link.
Is a return to the gold standard a real possibility? Is anyone in Washington pushing for it?
Bruce
Some politicians like Ron Paul have advocated a return to a gold standard but a lot of politicans either are not in favor or do not understand how it works. Also to return to a gold standard it would have to be a gradual transition considering that in the current environment there are all these imbalances in trade, budget deficits and with the current US structure of production that does not fit the structure of demand. Additionally to have a really sound world monetary and trade system other countries too would have to sign up. A sounder monetary system is of course possible but it takes will.
Connection between money printing out of thin air and the emergence of rustbelts? What’s important to note about the 2001-2009 period when 5 million manufacturing jobs were lost is that the money supply increased over 100% when looking at the Austrian Money Supply metric, oil went from $30 a barrel to over $100 and the US starting in 2003 became involved in Iraq.
It’s important to remember that inflation leads to current account deficits when a country inflates faster then trade partners, budget deficits as future costs become higher than anticipated and malinvestment where a structure of production forms that may not fit the structure of demand due to artificially low interest rates. Artificially low interest rates make projects that weren’t profitable at higher rates appear now profitable at lower rates which compete for resources with naturally more profitable ones.
To see in charts the connection between inflation and manufacturing job losses check out the document linked below starting from page 36.
http://www.fame.org/Publications/Dr.%20Lawrence%20Larry%20Parks%20-%20FAME%20-%20TESTIMONY%20BEFORE%20THE%20US%20HOUSE%20COMMITTEE%20ON%20FINANCIAL%20SERVICES%20112th%20Congress.pdf