Tuesday, January 31, 2012

When Mitt Romney came to Minnesota

No, I'm not talking about the Mitt Romney event in Eagan tomorrow afternoon. I'm talking about when Mitt Romney's Bain Capital came to Minnesota.

By now you are probably familiar with the job destruction record of vulture capitalist firm Bain Capital. If you haven't seen the devastating video that inspired the title of this post, you need watch this.

A Los Angeles Times article from December published a Deutsche Bank prospectus for investments in Bain Capital that listed the companies that Bain purchased from 1984 - 1999, roughly matching Romney's tenure at Bain. One of the companies listed as an acquisition is Midwest of Cannon Falls, a seasonal decoration company founded in the 1950's.

In 1997, Bain purchased an equity stake in Midwest of Cannon Falls from its private owners. At the time, Midwest employed 500 people worldwide and had a distribution center in Cannon Falls. Despite statements like "employment levels are not expected to change," in July 1998, Midwest laid off 40 Minnesota employees in a reorganization.

From a July 2, 1998 Star Tribune article:
Giftware distributor Midwest of Cannon Falls has eliminated 40 jobs, mostly in Minnesota. The company, which employs about 500 people worldwide, said it needed to streamline its "internal processes" to better compete in the giftware business. The positions were eliminated as job descriptions were revised and duplication of processes minimized, said company spokeswoman Keri Smith. In September, Bain Capital Inc., a Boston-based private equity investment firm, bought an undisclosed stake in Midwest of Cannon Falls. Bain officials have said the investment is "financial in nature" and that day-to-day operations are left to Midwest's management team.
Bain held its investment until 2001, when Midwest was acquired by Blythe Inc. Eventually, after being sold to Blythe, Midwest closed its distribution center in Cannon Falls in 2009. Now Midwest employs approximately 60 people in Minnesota, far less than before.

While the Midwest acquisition and subsequent layoff was a minor deal in the pantheon of Romney's Bain dealings, it mattered to the folks who lost their jobs. It's a safe bet that Mitt Romney wouldn't be welcomed as warmly in Cannon Falls as President Obama was in August. Eagan was probably a better choice.

Follow me on Twitter @aaronklemz

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