Did Romney really create 100,000 jobs?

As the GOP frontunner's record at Bain Capital comes under increasing scrutiny, his math looks fuzzy. Here's a look at jobs gained and lost via the hedge fund's work.

By MSN Money Partner Jan 12, 2012 2:47PM

By Susan Adams for Forbes

In the Republican presidential debates last weekend, Mitt Romney repeated his claim that he is an effective leader who created a “net net” of 100,000 jobs while he was working in the private sector.


But three recent reports, by the Los Angeles Times, the Associated Press and by FactCheck.org, the nonprofit, nonpartisan project run by the ForbesAnnenberg Public Policy Center at the University of Pennsylvania, say that the Romney campaign has yet to offer convincing proof to back up the claim.


The best the campaign has done: providing a list to FactCheck.org of recent or current employment at three big companies where Bain invested: Staples (SPLS), which had 89,000 employees as of Dec. 31, 2010; Sports Authority, which had 15,000 employees as of July 2011; and Domino’s Pizza (DPZ), which has added 7,900 jobs since 1999.

But Romney left Bain in 1999, so it hardly seems plausible to suggest that he created the positions that make up the current head counts at those companies.


Besides, as FactCheck points out, Bain was not the sole investor or creator of these companies. For instance, at Sports Authority, investment also came from three other venture firms, William Blair Venture Partners, Phillips-Smith and Marquette Venture Partners. Then of course there was the work of the executives inside the company, like CEO Jack A. Smith.


Two other facts about Sports Authority: Kmart owned it for five years starting in 1990, and as of 2006, it has been owned by the private equity firm Leonard Green and Partners. So which entity deserves credit for its job growth?


Jobs lost after Bain

Then there are the job losses at the many companies Bain acquired. FactCheck credits reports in the New York Times and Politico for flagging the following cuts or displacements: 385 jobs lost at American Pad & Paper; 1,900 cuts or relocations at Dade International; more than 2,100 workers laid off from DDI Corp.; 2,500 cuts at Clear Channel Communications; and 3,400 at KB Toys.


In an early December story, the L.A. Times scrutinized a 2000 prospectus issued by Deutsche Bank, which Bain sent to potential investors, describing the impressive profits earned by Bain Capital. Romney headed the firm for 15 years, until he left to run the Olympics in Salt Lake City. During Romney’s tenure, Bain bought more than 115 companies, according to the Deutsche Bank document. Like other leveraged buyout firms, reports the Times, Bain often made money by laying off employees, getting government subsidies or re-selling companies quickly for a profit.


Of the top 10 investments Bain made under Romney, reports the Times, four declared bankruptcy within a few years of Bain’s involvement, “shedding thousands of jobs.” One example: GS Industries, formed by Bain in the early ‘90s by investing $24 million to buy and merge several steel companies. “Company managers cut jobs and benefits almost immediately,” says the Times, while Bain and other investors reaped management fees and dividends. In 2001, GSI went bankrupt and 700 workers lost their jobs and most of their benefits. But Bain had already made $50 million on its initial investment, reports the Times.


Bain declined to comment to the Times about GSI, but some 40 other steel companies did go bankrupt during the decade between 1994 and 2004.


Romney has also taken credit for another, smaller steel investment that was a job creation engine. In 1994, Bain invested $18.2 million in a manufacturing start-up, Steel Dynamics (STLD), which now employs 6,000 workers. Another example of an employment hike at a Bain company: Epoch Senior Living, which grew from a few hundred when Bain invested $26.4 million in 1998 to more than 3,000 employees when it sold in 2007.


So Bain and Romney deserve credits on both sides of the jobs ledger.


How much credit?

At times, Romney tones down his rhetoric and uses the words “helped create,” a more supportable claim. In Saturday’s debate, he conceded that “we’re only a small part of that, by the way,” when he talked about Bain’s role in job creation.


Maybe voters know that the 100,000 jobs claim is typical campaign hyperbole. But as Romney’s challengers mount attacks on his record at Bain, his fuzzy math is going to get more scrutiny.


Related at Forbes.com:

Where the jobs will (and won’t) be in 2012

The best jobs for women in 2012

The best and worst cities for jobs right now


Jan 12, 2012 4:44PM
Create jobs BULL!! romney bought and sold our town off, he bought our biggest running factory in our town and closed it!! 800 people in this town are out of work looking for jobs!! As far as i am concerned ROMNEY NEEDS TO GET HIS OWN PINK SLIP AND SEE HOW HE LIKES IT!! He destroyed the economy of our town, its time to stop him from destroying the economy of the usa, while he laughs all the way too the bank on the backs of the middle to lower income classes of us citizens!!!
Jan 12, 2012 4:11PM
Romney is a liar like all politicians. If he created any jobs they were probably low paying jobs that didn't pay a living wage and/or sent overseas to exploit cheaper labor. Republicans only care about the rich and thir masters on Wall Street.
Jan 12, 2012 4:48PM
Not sure the Republicans can win this year.  It will have to be a really strong ticket, with honest ideas and a resurgent game plan to help our country go forward, to unseat an incumbent President (and who know, maybe Hillary Clinton on the ticket).  I'm for anyone who can "truly" improve our economy," and keep people's hands out of my wallet.    
Jan 12, 2012 3:49PM
So he is totally responsible for about 10,000 jobs being lost using this report. He had a hand in creating or saving a whole lot more than that. Isn't steel a lot cheaper from foreign countries that don't have unions and enviromental controls like the USA? So 40 other steel companies went bankrupt but not Romneys fault. Seems like he should be blamed for a bad investment not for closing the money losing steel plant.
Jan 12, 2012 5:15PM
Republicans cannot win in 2012 with the current clowns in the car.  This modern republican party controled by special interest is doomed.  Their so out of touch with majority of Americans they may not even retain the house.  The republican party today is in shambles........they will not win with the current group and RNC. 
Jan 12, 2012 4:17PM
If the republicans want to win in 2012 they need to get their act together. After the McCain Palin ticket in 08 republicans are their own worst enemy!!! Wake up in 2012 if you want to win.
Jan 12, 2012 4:17PM

I know that in the 80's, leveraged buyout firms made millions but only because they left the surviving company with huge debts. Almost inevitably, these companies later filed bankruptcy because they were unable to service the debts and the only winner was the buyout firm because much of the debt was a result of profits to the buyout firm.


Not saying that was the case with Bain but I would like someone to answer if Bain left the intact companies with mountains of debt.

Jan 12, 2012 4:51PM

How many jobs did Obama ever create in the private sector? Lets face it the only experience most politicians have for higher office is sleazy back room deals which screw the american public. Most have never had a real job in their life. No wonder our country is bankrupt.


Obamas idea of job creation is to spend a trillion dollars to create a thousand $40,000 a year jobs. The job of our government is not to hire everyone but to create an environment in which our businesses can compete. That means low taxes and fewer regulations. In order to lower taxes they first need to slash the Federal budget. Why don't they get it that most Americans would support them if they would do what is best for the country and not what is best for themselves or their party. Put America First.

Jan 12, 2012 4:59PM
Did you read that Americans?  Are we going to allow another politician to lie to us?  NO we are not.  Everyone in the clown car is a liar.  Their all bought by special interest.  ENOUGH.  Hold them accountable.  And this includes president obama.  We must force them to tell the truth.  WE the people are the owners of this country and they are the servants.  We have not been represented.  We are taxed without representation.  ENOUGH.  Theres a slow train coming and if they dont like OWS or tea party people.......just wait till majority stand together against them the liars and greedy.......
Jan 12, 2012 6:20PM
I once worked for a company Bain bought in 2005, Unisource.  Within 4 years the workforce in my plant (Southborough, Ma) had shrunk from 130 to 25.  This was the branch they kept open. Portland, Bangor, Concord NH, Providence, Mansfield Ma and Milford Ct were shuttered. This pattern was repeated all over the country. Although Mitt was politicing by this time, my point is that Bain Capital in particular and private equity in general do not create jobs. They create wealth for their wealthy investors and directors.  Mitt Romney is Gordon Gecko, the smiling face of corporate greed.
Jan 12, 2012 6:22PM
Mitt "Corporations are people, My friend" Romney is a dishonest serial flip-flopper and it is blatantly obvious he will say anything to get elected. His campaign is a fountain of misinformation, dubious information and false information. I do not believe the American people will be fooled by Romney. He is the candidate of the powerful, the privileged and the moneyed. We don't need more tax cuts for the rich 1% and the corporations. The corporations and the 1% are already holding literally trillions of dollars of the financial wealth of the nation. Romney's tax plan is to give the wealthy even more of the nations wealth with a supply-side, trickle-down, voodoo economics tax scheme. We have been on the trickle-down economy since the early eighties and it is one of the main reasons the U.S. has some of the greatest income inequality and greatest wealth inequality in the entire developed world.
Jan 12, 2012 6:14PM

Romney says he created 100,000 jobs.. I say Bullcrap!!! But, now if he wins the presidency, Romney has said that he will dismantle and shut down Amtrak... Well, there goes 20,000 plus jobs LOST!!!   But he will give money to the Airlines who just rip you off time and time again for Bag Fees and change plane fees and

Jan 12, 2012 5:43PM

If you believe Romney and Perry both,  they have cured the un-employment problem for Obama.


They just forgot to tell the ones that are without a JOB.


I understand that Romney is maybe getting Security from Tax Payers. 


Why just doesn't he ask Perry and get the State Police to go Security.  Perry does!


Or someone forgot to tell Texas that Perry's ego is the only thing that needs Security.

Jan 12, 2012 7:47PM
Of course "He" created 100k jobs. Al Gore also created the internet.
Jan 12, 2012 6:31PM
While it is easy to blame economic conditions on business closings.It is not like The GSI conglomerate was a company that was viable.It was put together in the early 90's. If my facts are straight, Bain had enough sense and money to look into future market trends. So don't tell me GSI wasn't put together to fail. The Steel Business started a 10 year decline in 1994. The bottom didn't all of a sudden drop out. Bain had to know this was coming. Even my mother on Long Island tlked about the decline of the Steel Business in the 80's. As for K.B. Toy and Hobby, Bain purchased them for 350 mil. but only used 18mil cash. And leveraged the rest against K.B. assets..K.B. became deeply debt ridden,within 2 years no kidding.. you didn't have to be The Wizard of Wall Street to see this coming.These moves seem designed to rape the assets of the company and take it into insolvency. Bain can not be so rich and so dumb at the same time.
Jan 12, 2012 6:15PM

But... He LIKES being able to fire people, for Pete's sake.


ROMNEY/TRUMP 2012.  Your'e fired!... twice!

Jan 13, 2012 11:26AM
One point rarely mentioned is "Were jobs really created, or merely transferred?"  While it may be true that Staples now employs about 90,000 workers, it was done at the expense of thousands of small office supply stores who themselves had collectively employed thousands of people.  I love the selection and prices at Staples and use them all the time, but net-net have they really increased employment in their industry?
Jan 12, 2012 5:08PM
There is only one so called republican worth listening to and debating president obama.  BUDDY ROEMER.  But RNC will not put him on stage.  WHY?  because he is not bought by special interest.  He does not allow special interest money.  He does not sit in the clown car of disgraceful candidates.  He is not a LIAR, CON OR CHEAT.   IF YOU WANT A GOOD DEBATE?  PUT BUDDY ON STAGE WITH PRESIDENT OBAMA.........and let it roll.
Jan 12, 2012 6:00PM

One thing not discussed is was there a business plan in place when Romney left in 1999 that can show the growth patern that was expected at that time.  Job creation doesn't always happen  overnight and if he helped develop or sponsor the plan then he should get some credit when it happened.  However, the reverse is also true.  If he put a plan in place to decrease jobs or ship them overseas he should get the negative credit for that as well.  Being involved when the plan was executed isn't always essential.

Jan 13, 2012 2:01PM

IF you are quoting Mitt to have said that he "likes to fire people", and leaving it at that, you are a LIAR, and you know it. My opinion is that if you have to lie to get your way, your way is probably not "right".   I heard Mitts comments and that is NOT what he said, and many of you who are quoting him incorrectly know very well, that is NOT what he said.  Think about it, what reasonable candidate who wanted the votes of the people would say such a thing?  Anyone with common sense could figure out that this statement was taken out of context.  None of these candidates are perfect, no, not one.  So, let's move on and vote for the person who would best be able to get us back on track.


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