What I Learned at Bain Capital
Mitt Romney
Wall Street Journal
August 23, 2012
http://online.wsj.com
The back-to-school season is here, and
as parents take their children to shop for school supplies, I suspect
that many of them will be visiting a Staples store. I'm very familiar
with those stores because Staples is one of many businesses we helped
create and expand at Bain Capital, a firm that my colleagues and I
built. The firm succeeded by growing and fixing companies.
The lessons I learned over my 15 years
at Bain Capital were valuable in helping me turn around the 2002 Winter
Olympics in Salt Lake City. They also helped me as governor of
Massachusetts to turn a budget deficit into a surplus and reduce our
unemployment rate to 4.7%. The lessons from that time would help me as
president to fix our economy, create jobs and get things done in
Washington.
A broad message emerges from my Bain
Capital days: A good idea is not enough for a business to succeed. It
requires a talented team, a good business plan and capital to execute
it. That was true of companies we helped start, like Staples and the
Bright Horizons child-care provider, and several of the struggling
companies we helped turn around, like the Brookstone retailer and the
contact-lens maker Wesley Jessen.
My presidency would make it easier for
entrepreneurs and small businesses to get the investment dollars they
need to grow, by reducing and simplifying taxes; replacing Obamacare
with real health-care reform that contains costs and improves care; and
by stemming the flood of new regulations that are tying small businesses
in knots.
My business experience confirmed my
belief in empowering people. For example, at Bain Capital we bought
Accuride, a company that made truck rims and wheels, because we saw
untapped potential there. We instituted performance bonuses for the
management team, which had a dramatic impact. The managers made the
plants more productive, and the company started growing, adding 300 jobs
while Bain was involved. My faith in people, not government, is at the
foundation of my plan to strengthen America's middle class.
I also saw firsthand through these
investments how energy costs impact the ability of a business to grow.
Today, energy costs are weighing on job creators across America because
President Obama has limited energy exploration and restricted
development in ways that sap economic performance, curtail growth, and
kill jobs. I will take a sensible approach to tapping our energy
resources, which will both create jobs and make energy more affordable
for every sector of our economy.
In the 1990s, when the
"old-technology" steel industry in the U.S. was failing, Bain Capital
helped build a new steel company, Steel Dynamics, which has grown into
one of the largest steel producers in America today, holding its own
against Chinese producers. The key to its success? State-of-the-art new
technology.
Here are two lessons from the Steel
Dynamics story: First, innovation is essential to the competitiveness of
U.S. manufacturing. We are the most innovative, entrepreneurial nation
in the world. To maintain that lead, we must give people the skills to
succeed. My plan for a stronger middle class includes policies to give
every family access to great schools and quality teachers, to improve
access to higher education, and to attract and retain the best talent
from around the world.
The second lesson is that we must have
a level playing field in international trade. As president, I will
challenge unfair trade practices that are harming American workers.
Running a business also brings lessons
in tackling challenges. I was on the board of a medical
diagnostic-laboratory company, Damon, when a competitor announced that
it had settled with the government over a charge of fraudulent Medicare
billing. I and fellow Damon outside board members joined together and
immediately hired an independent law firm to examine Damon's own
practices.
The investigation revealed a need to
make some changes, which we did. The company, along with several other
clinical-laboratory companies, ended up being fined for billing
practices. And a Damon manager who was responsible for the fraud went to
jail. The experience taught me that when you see a problem, run toward
it or it will only get worse.
That will be my approach to our
federal budget problem. I am committed to capping federal spending below
20% of GDP and reducing nondefense discretionary spending by 5%. This
will surely result in much wailing and gnashing of teeth in Washington.
But a failure of leadership has created our debt crisis, and ducking
responsibility will only cripple the economy and smother opportunity for
our children and grandchildren.
I'm not sure Bain Capital could have
grown or turned around some of the companies we invested in had we faced
today's anti-business environment. Andy Puzder, the chief executive of
CKE Restaurants Inc., which employs about 21,000 people at Carl's Jr.
and Hardee's restaurants, has said that the "current unfriendly economic
environment perhaps best explains why American companies are sitting on
over $2 trillion which they could invest."
President Obama has piled on excessive
regulations, proposed massive tax increases, added more than $5 trillion
in federal debt, and failed to address the coming fiscal cliff-all of
which is miring our nation in sluggish growth and high unemployment.
I know what it takes to turn around
difficult situations. And I will put that experience to work, to get our
economy back on track, create jobs, strengthen the middle class and lay
the groundwork for America's increased competitiveness in the world.
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