This is a follow-up on the previous post about the Obama ad. Here's a link to a Reuters story that was of interest to me because it gives some background info about why the plant closed down.
It is not a simple story. You may read it and come to your own conclusion.
My own comment is that businesses are in business to make money, not to provide jobs and benefits. The jobs and benefits result from a successful business. The business in question was in trouble and came to Bain because of its reputation for turnarounds. This turnaround attempt failed. They why part is not so easy to figure because it is not some cut-and-dried explanation.
In the end, it all boils down to making money. The company couldn't make it and it failed. There are those who say that the company would have stayed in business if it weren't for Bain. But a lot of companies like this one failed at that time. If the company was not in trouble, Bain wouldn't have been called in.
Bain made money off this deal. The company in question went out of business despite Bain's efforts. That's the bottom line for some people. The sentiment seems to be that Bain should not prosper if the company they are trying to turn around doesn't. The accusation was that Bain did more harm than good in its efforts to turn the company around. That may be true, but the likelihood is that it isn't given what was happening in the larger scene.
The amount of money Bain got out of this deal probably wouldn't have saved the company. Their problems were too big. Even if Bain worked for free, it probably wouldn't have mattered. That's my opinion.
Update:
A little more thought on the matter leads me to think that the real complaint should against the owners who brought Bain in on those terms ( and probably on the unions, but that is a given). Bain didn't have the incentive to save the company since they could make money in any case. Bain may not have worked on the deal without any guarantee of making a profit. What I'm saying is that some kind of agreement could have been pursued that wouldn't have paid Bain unless they were successful in the turnaround. The steel company negotiated a bad deal, don't blame Bain for negotiating a good deal for themselves. But the steel company may have been desperate, so they signed off on a bad deal. It was that or go out of business, probably.
People are mad about Bain's success. It doesn't do anything to solve any problems. Even if Bain wasn't involved, they would have still gone out of business. Those who claim otherwise are not facing the facts. Bain wouldn't have been called in if the company wasn't already in trouble.
Someone would probably accuse me of being anti-union. Like I said, a business is in business to make money. If the union can't help the business make money, the union dies with the company. Their main job is to see to it that the company survives, because if it doesn't, their jobs don't survive either. How did the unions help the company survive? It is probably the other way around.
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