Romney Pioneered Outsourcing

The Washington Post's Tom Hamburger writes that during the period Romney was actively involved in running private equity company Bain Capital, the firm

... owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components.

This provides an interesting insight into Romney's self-characterization as a job creator.

But a Washington Post examination of securities filings shows the extent of Bain’s investment in firms that specialized in helping other companies move or expand operations overseas. While Bain was not the largest player in the outsourcing field, the private equity firm was involved early on, at a time when the departure of jobs from the United States was beginning to accelerate and new companies were emerging as handmaidens to this outflow of employment.

US companies that Bain assisted in moving or creating jobs outside the US include:

  • CSI, which provides customer support services to technology companies. "Initially, CSI employed U.S. workers to provide these services but by the mid-1990s was setting up call centers outside the country."
  • Stream International, also an international call center provider, merged with CSI, and Bain eventually became majority shareholder.
  • Modus Media, formed when CSI merged with Stream, specialized in helping companies outsource manufacturing. "[I]t's expansion of outsourcing services took place in close consultation with Bain.... At the time, three Bain directors sat on the corporate board of Modus
  • GT Bicycle, which Bain bought in 1993, relied largely on Asian labor, and was acquired by Schwinn, which also moved much of its manufacturing outside the US.
  • Electronics manufacturer SMTC
  • Chippac, which promoted its outsourcing efforts in trying to attract investors.

Read Romney’s Bain Capital invested in companies that moved jobs overseas.