TBogg

Never Mind The Details, Here’s The Bollocks


John Hinderaker is just cold babbling again:

The Left is carrying out a coordinated attack on Mitt Romney’s business career. One sees exactly the same allegations, often phrased identically, whether you look at the Daily Kos, the Associated Press, Slate or Think Progress, or listen to Newt Gingrich or Rick Perry.

Welcome to the Professional Left, guys! Somebody get those two a couple of Che shirts and some dope.

Okay … the Hinderaker version:

In the same year, 1988, Holson opened a factory in Gaffney, South Carolina, where photo albums were produced. The factory initially employed 100 people and eventually around 150–all brand-new jobs that were created by Holson under Bain’s guidance.

Unfortunately, the new company, Holson Burnes, was losing money, suffering net losses in both 1991 and 1992. The new management “worked to streamline the company, eliminate overlap, cut production costs, and jettison poorly performing units.” Those efforts succeeded in making Holson Burnes profitable; they also resulted in closing the Gaffney plant in 1992, after four years of operation.

[…]

From the brief narrative above, one can see how ludicrous these charges are. Bain didn’t “come in and take companies apart;” on the contrary, it brought Holson and Burnes together in what became a profitable enterprise for decades. Bain didn’t make “people lose their jobs;” on the contrary, it created all of the jobs in Gaffney that Perry is talking about. It would have been good if the jobs had lasted more than four years, but there was obviously a net benefit of four years’ work to the employees.

The devil, as they say, is in the details:

In 1987, Bain Capital pounced on a golden opportunity: It set its sights on Hallmark’s Burnes of Boston, having bought the Holson Co. the year before. Executives organized the companies under the Holson Burnes Group, which by 1992 was one of the nation’s largest makers of photo albums and picture frames.

Company executives quickly went to work growing their new venture. They foresaw “significant growth” for their products in the South, a local newspaper reported, so South Carolina officials lured the company to Gaffney with more than $5 million in industrial bonds. Officials in Cherokee County, about 60 miles from Charlotte, N.C., pushed for $200,000 in utility upgrades.

Within months, Holson Burnes opened its 114,000-square-foot factory, using land on the outskirts of Gaffney once owned by a farm-supply company. By April 1988, about 100 workers were fastening together photo albums for the growing business.

“It was a new, state-of-the-art plant with lots of people,” recalled Robert Weaver, who worked there in the late 1980s and later became a county official.

But in time, the red ink grew. Although Holson Burnes’ sales nearly doubled from 1987 to 1991 — to more than $110 million— it posted consecutive operating losses, reports stated. Executives blamed the recession and a shift in consumer habits.

To stem the losses, Holson Burnes closed the plant and sold the property in July 1992 for $2.8 million, county records show. The company paid off its mortgage and transferred a small number of remaining jobs to New Hampshire.

Those New Hampshire jobs turned out to be fleeting as the siren call of cheap overseas labor beckoned:

Just as executives closed down operations here and sold its South Carolina factory to the Bic Corp., residents 900 miles away in Claremont, N.H., were preparing for the new jobs. The company said in spring 1992 that the expansion in Claremont “will allow us to focus our attention on our rapidly growing base” of products.

But the prospect of new jobs — similar to expectations in Gaffney — was short lived.

Within seven months, Holson Burnes began issuing furloughs to half its Claremont employees. Even if things looked up, the company told its workers, it would not rehire most of its clerical or managerial staff.

Exact numbers of layoffs were never announced. Some workers estimated that 85 to 100 employees were affected, telling the local Claremont Eagle Times that entire departments had been “decimated.”

The cost-cutting continued at Holson Burnes. By 1992, the company manufactured nearly 75 percent of its photo frames overseas, according to documents filed with the Securities and Exchange Commission. One of the company’s clock-making divisions also shipped work overseas from a Rhode Island plant.

I bet Hinderaker never let his kids see the end of Old Yeller – “It worked out fine, now just go to bed for God’s sake…”

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TBogg

TBogg

Yeah. Like I would tell you....

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