Posted 3 years ago on Oct. 11, 2012, 6:59 a.m. EST by WSmith
from Cornelius, OR
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As Romney Repeats Trade Message, Bain Maintains China Ties
“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.”
Daniel Borris for The New York Times
In Freeport, Ill., workers have protested plans by Sensata Technologies to relocate 170 jobs to China. Bain Capital has a controlling stake in Sensata, which makes sensors and controls for vehicles and motors.
By SHARON LaFRANIERE and MIKE McINTIRE
Published: October 9, 2012 509 Comments
The tale of Asimco Technologies, an auto parts manufacturer whose plants dot eastern China, would seem to underscore Mitt Romney’s campaign-trail complaint that China’s manufacturing juggernaut is costing America jobs.
Asimco, an auto parts maker with plants in Beijing and elsewhere in China, bought two Michigan factories with 500 workers but shut them down in 2007. It is now owned by Bain Capital.
Nine years ago, the company bought two camshaft factories that employed about 500 people in Michigan. By 2007 both were shut down. Now Asimco manufactures the same components in China on government-donated land in a coastal region that China has designated an export base, where companies are eligible for the sort of subsidies Mr. Romney says create an unfair trade imbalance.
But there is a twist to the Asimco story that would not fit neatly into a Romney stump speech: Since 2010, it has been owned by Bain Capital, the private equity firm founded by Mr. Romney, who has as much as $2.25 million invested in three Bain funds with large stakes in Asimco and at least seven other Chinese businesses, according to his 2012 candidate financial disclosure and other documents.
That and other China-related holdings by Bain funds in which Mr. Romney has invested are a reminder of how he inhabits two worlds that at times have come into conflict during his campaign for the White House.
As a candidate, Mr. Romney uses China as a punching bag. He accuses Beijing of unfairly subsidizing Chinese exports, artificially holding down the value of its currency to keep exports cheap, stealing American technology and hacking into corporate and government computers.
“How is it China’s been so successful in taking away our jobs?” he asked recently. “Well, let me tell you how: by cheating.” But his private equity dealings, both while he headed Bain and since, complicate that message.
Mr. Romney’s campaign insists he has no control over his investments since they are held in a blind trust. That said, a confidential prospectus for one of the Bain funds, obtained by The New York Times, promotes China as a good investment for some of the same reasons that Mr. Romney has said concern him: “Strong fundamentals” like manufacturing wages 85 percent lower than what Americans earn, vast foreign exchange reserves and the likelihood that China will surpass the United States as the world’s largest economy.
“Accordingly, Bain Capital expects to see an increasing array of high-growth companies available for investment,” the prospectus says, noting the relative dearth of private equity in China.
Among the companies in which the Bain funds have invested is a global auto parts maker that is in the process of closing a factory in Illinois and moving most of the equipment and jobs to Jiangsu Province, where the Chinese government has built it a new plant; a Chinese electronics retailer accused by Microsoft of selling computers with pirated software; and a Hong Kong-based Chinese appliance maker that was sued for copying another company’s design for a deep-fat fryer.
Asked if Mr. Romney sees any conflict between his Bain investments in China and his policy positions, the campaign said: “Only the president has the power to level the playing field with China. No private citizen can do that alone.”
The campaign said Mr. Romney put his fortune, estimated at $250 million, in a “blind trust” when he became Massachusetts governor in 2003. “The trustee of the blind trust has said publicly that he will endeavor to make the investments in the blind trust conform to Governor Romney’s positions, and whenever it comes to his attention that there is something inconsistent, he ends the investment,” the statement said.
Should Mr. Romney become president, however, the structure of the trust would most likely not meet the federal requirements for independent management. It is managed by a Boston-based law firm, Ropes & Gray, that has a long history of doing legal work for both Mr. Romney and Bain Capital, including representing some of the same Bain funds in which it invested Mr. Romney’s money.
Mr. Romney’s trustee, R. Bradford Malt, who is chairman of Ropes & Gray, declined to comment.