The Instigator
Pro (for)
5 Points
The Contender
Con (against)
3 Points

Romney's Work at Bain Capital Helped Companies

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Post Voting Period
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Voting Style: Open Point System: 7 Point
Started: 1/25/2012 Category: Politics
Updated: 4 years ago Status: Post Voting Period
Viewed: 5,944 times Debate No: 20642
Debate Rounds (4)
Comments (4)
Votes (2)




I assert that Romney's work at Bain Capital helped the companies they invested in, as a 'net' effect. My burden is to show that companies did better with/after Romney/Bain, and Con's burden is to show that Romney/Bain hurt companies, as a 'net' effect.

Please, no arguments over semantics. Any questions can be posed in the comments for clarification.

R1 - Acceptance
R2 - Opening Arguments
R3 - Rebuttals/Arguments
R4 - Rebuttals/Conclusions



I thank my opponent for allowing me to partake in this quite topical debate. In the interest of purely avoiding semantic arguments, I will use the following definitions in my refutation of the premise.

net -[1]
a: remaining after the deduction of all charges, outlay, or loss <net earnings> <net worth>
b: excluding all nonessential considerations : basic, final <the net result> <net effect>

help -[2]
a : to be of use to : benefit
b : to further the advancement of : promote
c : to change for the better

Debate Round No. 1


I would like to thank my opponent for taking up this challenge. I will begin this round by outlining the two aspects of Bain Capital's strategy, investing in start-up companies, and taking over companies that are either failing or in need of restructure and growth.

-----Sealy Corporation-----

Sealy Corp was sold to Bain Capital in 1997.[1] Sealy Corp reported in 1997 the following:[2]
  • 5,456 employees
  • $721 million in assets
  • $11.7 million in net income

In 2003, Sealy's last year with Bain Capital, they reported the following:[3]
  • 6,562 employees
  • $959 million in assets
  • $18.3 million in net income
Under Bain Capital, Sealy Corp managed to add 1106 new full-time jobs(a 20% increase in its workforce), $238 million in assets, and still report a 56% increase in net income.


Staples is one of the many companies Bain Capital has invested in during start-up and expansion. Staples now has over 89,000 employees.[4] Stemberg, the co-founder of Staples, said about Mitt Romney: “Most V.C.’s thought it was ridiculous... Mitt was highly unusual in that he went to the research level to study it.”[5]

These two companies are exemplary of the type of work Bain Capital and Mitt Romney did. Businesses need money to grow, and sound managment. Mitt Romney and Bain Capital provided both for many, many companies.



Bain Capital is company that focuses on leveraged buyouts, not venture capital investments.

Venture Capitalism Good, Leveraged Buyouts Bad
Venture capitalism is a method by which money holders purchase an interest in a startup company by investing seed money in the company. It is a high risk investment with potentially high rewards. Since the majority of failures of new startups is caused by undercapitalization, this is a very important part of growing the economy. Without it we may never have seen the technological booms of the 1980's and 1990's.[1]

Bain Capital was brilliant in that it moved away from startups before the tech bust and focused on leveraged buyouts rather than capital investments.[2]

Leveraged buyouts, on the other hand, are not for the good of the company. Leveraged buyouts look for companies that are stable, have a low existing debt load, have generated a steady supply of revenue, have hard assets, and have the potential for short term increases in the bottom line through things like workforce layoffs or job eliminations[3]. The money that is used to gain a controlling interest in the company is often borrowed, and secured by the hard assets of the very company that is being invaded.[3] Worse yet, the debt is non-recourse, meaning that the company being raided is responsible for paying off the debt. It is not unheard of for the companies debt to also be used to pay dividends to the raiders [4]

Raided Companies Left in Weakened State
Shackled with this debt, many companies find themselves in a weakened position. According to the Washington Post, 22% of the companies in which Bain invested fell into bankruptcy[5] within eight years of being raided. Because of the way Bain would restructure the companies finance (to benefit Bain, not the company), the company could not fulfill its obligations.

The company raided Armco Steel in my hometown in 1993. Armco Steel had been operating since 1888 and at its peak employed 4,500 people. Bain took a dividend payout of $36.1 million dollars, at the same time their pension plan was under funded by $44 million. Armco Steel went bankrupt less than a decade after Bain arrived and because of the way leveraged buyouts are funded, Bain did not have to pay for the union pensions to which they helped themselves. Instead, the union had to be bailed out by the government, but only at a fraction of the original pension payout to the members.

Just Because Something Survives Does Not Mean It Was Helped
Many years ago leeching was an acceptable form of therapy for most illnesses. Though some patients inevitably survived this bloodletting, many others died. We know now that it was not 'bad blood' that was being drained, just blood; blood that the patient needed to survive. Though my esteemed opponent can certainly point to companies which survived long enough to thrive after being taken over by Bain, there are many other companies besides Armco Steel that had the opposite result.

From the New York Post[6]:
  • Bain in 1988 put $5 million down to buy Stage Stores, and in the mid-'90s took it public, collecting $100 million from stock offerings. Stage filed for bankruptcy in 2000.
  • Bain in 1992 bought American Pad & Paper (AMPAD), investing $5 million, and collected $100 million from dividends. The business filed for bankruptcy in 2000.
  • Bain in 1993 invested $60 million when buying GS Industries, and received $65 million from dividends. GS filed for bankruptcy in 2001.
  • Bain in 1997 invested $46 million when buying Details, and made $93 million from stock offerings. The company filed for bankruptcy in 2003.

The only positive net effect resulting from Bain involvement is their profit margin. The lives and jobs of the thousands of people that have been negatively affected by the liquidation of 'assets' in order to turn a quick profit were added to the rolls of the unemployed and the empty factories stand as a testamant to the cruelty of the bloodletting.


Debate Round No. 2


1 - Bain Capital Ventures is part of Bain Capital, and has invested in 113 companies.[1] Romney was directly involved with Staples and one of the key players in that success, so this aspect of Bain Capital's work cannot be discounted.

2 - Con states that leveraged buyouts are bad, without looking at the specifics of the results. For instance, Sealy Corp. Even with adding more debt to the company, in the form of $38 million in interest payments, Sealy had more net income, more employees, and more business than before. Adding debt isn't necessarily a bad thing, if the company is better off after paying the interest on the debt, then it can be a great for the company. Generalized statements like this have no bearing on the effect Bain Capital had on companies.

3 - 22% of companies fell into bankruptcy within eight years of being 'raided'. Unfortunately, the cited article doesn't provide any details about these companies. Was Bain still managing them when they went bankrupt? Were they going bankrupt before Bain stepped in? What did Bain do at these companies? Statistics like this are meaningless as they have no base, no control, and no context.

4 - Armco Steel wasn't doing well in the early 1990s.[2] Armco Inc(the correct name at the time) lost $240 million dollars in 1991, and $35 million in the first quarter of 1992.[3] Tom Graham was brought in to turn the company around, and part of that included 10 divestitures[2], which are required when a company is failing. It is better to save a company with some layoffs than to allow the entire company to go under. It is important to note that Armco Inc wasn't a public company, and unless Con is able to provide sources for their financial data, it is difficult to know exactly what transpired.

We do have public information for 1996 and later. We also know that by 1996, despite the 10 divestitures made the year before Bain stepped in, Armco Steel Holdings had 5,800 employees.[4] So, Bain created jobs at Armco, at least 1,300 if Con's number of 4,500 is correct, in it's first 3 years.

We do have some financial data in the 1996 report about previous years. In 1992 Armco suffered a net loss of $544 million. In 1993 Armco suffered a net loss of $42 million. In 1994, Armco enjoyed a $257 million net profit. Clearly, Bain was a tremendous help to Armco, in spite of any layoffs that were necessary to save the company.

As for the bankruptcy, Tom Graham pushed for a new $1.1 billion dollar mill to be built[3] in the late 1990s. Armco's debt skyrocketed from $325 million in 1995 to $1.45 billion in 1999[4,5]. Con hasn't shown in any way how Romney and Bain were a net-negative influence on Armco Steel, aka Armco Inc, aka AK Steel.

5 - Stage Stores. Con doesn't show why Stage Stores filed for bankruptcy, and Mitt had left Bain by that point. By 1995 Stage had over 9,000 employees and $10 million in net income.[6] In 1999, Mitt's last year, Stage had over 15,000 employees, and $48 million dollars in net income.[7] I will leave it up to Con to determine the reasons for the bankruptcy, but Stage Stores continues to this day with over 13,000 employees and $37 million in net income.[8]

6 - Ampad. Ampad was in danger, as parent corp. Mead was laying off employees. Bain stepped in, and Ampad enjoyed 53% net sales growth year after year from 1992 to 1996 when it went public.[9] Con has failed to go into the reasons why Ampad went bankrupt, including who was in charge from 1996 on. I couldn't find public financial information on Ampad for this time period, but Con has failed to show how Bain had a negative influence on Ampad.

7 - GS Industries similarly doesn't seem to have any public financial information for the time, so we are unable to see where the company stood before, during, and after Romney's influence. Con hasn't established how Bain was instrumental in GS filing bankruptcy.

8 - Details, I haven't found financial information here either. Con hasn't shown any information as to how Details did before and with Bain, nor the reasons why Details filed bankruptcy.

As I have clearly shown with public financial information, not only was Bain/Romney consistently successful(not 100%, but net-successful) in increasing net income for companies, but also in creating new jobs. Con has pointed to some news sources that don't say anything about a company's situation before, during, and after Bain's involvement, whereas I have shown Bain to take failing companies and breathe new life into them.

So far, I have shown Bain to have added the following jobs:

1,300 at Armco
6,000 at Stage Stores
89,000 at Staples
1,100 at Sealy
For a total of 97,400 jobs, showing a tremendous net-growth.



I comend my opponent for such a solidly researched argument.

1- The work done by Bain Capital Ventures is not discounted, and the good effect of capital ventures was specifically mentioned in my argument. The damage done by leveraged buyouts and to contrast the two processes was the purpose, not to ignore venture capitalism.

2 - the specific results of leveraged buyouts were observed, and it was noted that many companies were strong enough to survive the techniques employed in order to later thrive. That the profitibility of these companies improved is not disputed. What is disputed is whether the bottom line on the balance sheet is all that counts.

4 - My opponent is correct that the comapny was not doing that well in the 1990's. However, there was a safety net in place for more than the upper management on the eventuality that the company went bankrupt. The workers themselves had fought for and funded a reasonable pension plan that would take care of them if they lost the jobs at which many had worked for decades. The restructuring and payouts that took place under Bain's management resulted in the pension funds being repurposed. In addition, the previosly sited sources indicate that the company would have been able to survive had it not been saddled with such debt.

Again, it is not disputed that some mpanies can survive such a load of debt. But for thse who cannot, it is completely devestating for the company, the workforce, and the community. Rather than a stable but perhaps not wildly profitable company the community is left with an empty factory. The risk is all shouldered by the company, and the reward is all reaped by Bain Capital.

When a factory closes the local economic depression that occurs has wider consequences than just the bottom line of that company. Those paychecks no longer strengthen the local economy, those unemployment checks reduce the natonal coffers, and pension bailouts forcetaxpayers to pay for something for which the management was responsible.

My opponents math is a bit confusing to me. The company had a net loss of 544 million dollars the year Bain took over, and another loss of 43 million in 1993. This 586 million dollars is not balanced by a 257 million dollar profit, and certainly does not show a net profit.

Any jobs the company added in the years under Bain can not be considered as net jobs produced, because they merely added to the amount of jobs lost when the plants closed. If anything, they must be added to the heartache caused by increasing the number of pink slips the company issued by 1300.

5 - Stage stores filed for bankruptcy in 2000, Mitt left in 1999. It is not likely that Mitt had steered the company on a course towards greatness and in less than one year the company found itself shipwrecked and destitute. More likely is that the company was headed for the rocks and Mitt tripped and fell into the lifeboat.

The companies I listed show the sordid underbelly of leveraged buyouts. That this evidence is anecdotal is true, but nevertheless undercuts the contrntion that Mitt performed a net good in all the companies that Bain took over while he was with them. If it is going to be accepted that companies that thrived after being raided did so because of Bain, then the responsibility for those who withered the vine must also be accepted. One cannot take only the credit for things that occur under one's watch and then place all blame elsewhere for the same time period.
Debate Round No. 3


I apologize, due to non-internet life demands, I do not have the time to formulate full arguments for my current debates.

I only wish to conclude by restating that Mitt Romney, under Bain Capital, was an economic force for good that helped to start, save, stabalize, and expand companies. The net effect of Romney's work was a tremendous amount of jobs saved and created.

Con has only re-stated correlations with no basis or causation for bankruptcies, even ignoring that many of these companies continued to thrive and provide jobs after filing for bankruptcy. I showed that Stage still operates to this day, with more than 4,000 employees more than when Bain stepped in originally.

Con also confuses the company's(Armco) loss of 544 million in 1992 with its financials in 1993, when Bain took over. Bain can't be held accountable for what a company did before it stepped in. I must assert that most of Con's arguments have been generalized, correlation, and refuted at this point. Clearly, Mitt Romney helped companies.

I thank my opponent for the debate and wish him the best of luck.


I thank my opponent for such an interesting, apropos, and enlightening debate. I have learned much from the well researched citations in support of the pro argument.

The burden that pro took on was simple: companies were better with/after Bain Capitol than they were before[1]. For this reason it is not necessary to connect any dots, it is not necessary to analyze all the steps taken and supply evidence that Bain was directly responsible for the decisions. If a company did better with/after Bain than before, Bain got the credit for the net good that had transpired. If a company was worse off, Bain must take the responsibility.

Certainly my opponent can not expect Bain to be able to take all the reward of success without taking the blame failures. It is a poor leader that reaps the profits of his squad but makes them bear the burden for their failures. Bain does this in the financial world already, but that was not the groundrules for the debate.

Simply put: were companies better off after Bain than before? Not always. Often enough to show a pattern the company was made so vulnerable that it filed for bankruptcy. Many survived, indeed thrived. Not all. To those that went under it had a devestating effect on the workers and community, and these things must also be considered as part of the whole.

Does the good that Bain Capitol accomplished outweigh the negative effect they had on companies that did not survive? It depends on what is valued. Bain gambled with companies, and never lost. That is because when the dice came up bad, it was the company and the workforce who paid the price.

Again, I thank my opponent and look forward to hearing his other arguments in the future.

[1] Round 1 establishment argument.
Debate Round No. 4
4 comments have been posted on this debate. Showing 1 through 4 records.
Posted by JaxsonRaine 4 years ago
Thanks for the debate. It will be interesting to see people's reactions
Posted by Sisyphus67 4 years ago
I tell you, you have laid out a fantastic argument I will be hard pressed to overcome. I was going to try and bring in the total cost to workers and communities, but I do not think it will outweigh the positive.

Posted by JaxsonRaine 4 years ago
Yes, thank you. I initially had the resolution worded opposite, and apparently my mouse-clicking skills are lacking as I didn't successfully change from Con to Pro. I appreciate it.
Posted by Sisyphus67 4 years ago
If your burden is to show he helped, shouldn't you be taking the pro?
2 votes have been placed for this debate. Showing 1 through 2 records.
Vote Placed by Contra 4 years ago
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Total points awarded:03 
Reasons for voting decision: Pro upheld the BoP, but Con also showed that some companies did not benefit, and most be included.
Vote Placed by RoyLatham 4 years ago
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Total points awarded:50 
Reasons for voting decision: Con mostly responded to specifics with generalities. For example, con wold have to prove that all leveraged buyouts have a bad result, and he didn't try to prove that. Con also tried to hold Bain responsible for events that occurred after they were no longer in charge. If Bain sells out and the company later goes bankrupt, that isn't Bain's fault, it's the fault of the new management. The Pro case was well-researched.