Mitt Romney Bain Capital – Mitt Romney was the primary reason Bain Capital LLC more than doubled its money on GS Industries Inc – the former parent company of Georgetown Steel – under his leadership in the 1990s, even as the steel manufacturer went on to cut more than 1,750 jobs, shuttered a division that had been around for 100 years and eventually sank into bankruptcy.
Bain Capital spent $24.5 million to acquire GS Industries in 1993, according to an investment prospectus for the company that was obtained by the Los Angeles Times and reviewed by The Sun News. By the end of that decade, Bain Capital estimated its partners made $58.4 million off its investment in GS Industries, according to the prospectus.
Bain Capital’s partners also earned multimillion dollar dividends from GS Industries and annual management fees of about $900,000. But by the time GS Industries filed for bankruptcy protection in 2001, it owed $553.9 million in debts against assets valued at $395.2 million.
Romney – who founded Bain Capital in 1984 – was in charge of the firm for most of the time it owned GS Industries. Romney left Bain Capital in 1999, two years before the bankruptcy, to run the organizing committee for the Winter Olympics in Salt Lake City.
“We were doing well, and then Bain Capital bought us, and they took everything they could out of the company without making the investments we needed to stay competitive,” said James Sanderson, who has been with the mill since 1974 and served as its union president since 1988. “They ran the company into bankruptcy.”
Bain Capital came to own Georgetown Steel after it provided the financing for a management-led buyout of Armco Worldwide Grinding System of Kansas City, Mo., in 1993. The Armco plant was renamed GS Technologies, which merged with Georgetown Industries in 1995 to become GS Industries Inc. At the time, the combined entities – headquartered in Charlotte – had $1 billion in revenue and employed 3,800 people worldwide as the largest producer of carbon wire rods in North America.