New Mexico gets Bain’d: Romney took $2.5M in tax dollars and 1,100+ jobs from New Mexicans in 2000s
Mitt Romney’s Bain Capital duped New Mexico more than a decade ago when it set up a Silver City call center, promising more than 1,000 local jobs, only to have it close just two and half years later in a wave of outsourcing, laying off almost 800 middle-class workers and taking New Mexico taxpayers for more than $2.5 million in the process.
Before Bain Capital purchased a majority stake in the company in 1999, Stream International employed seven times more American workers, just over 3,000, than foreign. By the time Romney’s Bain sold its interest in the company in 2001, they had constricted Stream’s domestic investment while expanding operations in at least nine foreign countries.
Under Romney, Bain Capital took “free stuff” from our governments including free rent and free job training, all funded by New Mexico taxpayers. When the free training dried up, Bain packed up and left town taking at least $1.4 million in New Mexico taxpayer dollars and leaving behind a company and a community ideally set to be outsourced to no less than four foreign companies.
According to SEC records, Bain Capital purchased Stream International in 1999 as the company was expanding domestically and preparing to go public with a $51 million IPO. (IPO Reporter, 9/24/01).
New Mexico gets Bain’d
When Bain and Stream came to New Mexico looking to open a new call center in 2000, state and local taxpayers provided Romney with more than $2.5 million in taxpayer funds on their promise to create more than 1,000 career jobs for Grant County residents:
$1.8 million in taxpayer subsidized job training dollars (Albuquerque Tribune, July 12, 2002, Albuquerque Journal , September 29, 2000)
$652,500 in Silver City taxpayer subsidized rent (Albuquerque Tribune, July 12, 2000)
The 2000 opening of the Silver City center was part of a domestic expansion begun under Stream’s previous owners. In addition to New Mexico, Stream had also opened a facility in Montana and announced plans to open others Wyoming and Idaho. (“Call Center No Longer Considering Gillette,” The Associated Press , 4/13/00; Times-News, [Twin Falls, ID], 9/19/00)
“One of the biggest players” in the outsourcing industry
However, during Romeny’s tenure as Bain’s CEO, Stream abruptly cancelled plans to open others the Wyoming and Idaho facilities and within two months announced plans for new and expanded facilities in Spain, Canada, France, Ireland and India. (“Call Center No Longer Considering Gillette,” The Associated Press , 4/13/00; Times-News, [Twin Falls, ID], 9/19/00; (Stream International, Press Releases, 9/14/00, 10/20/00). The company also invested heavily in VOIP technology to allow call-center representatives in foreign countries to connect to American customers through the Internet. (C.A. Soule, “Telco’s New Center Of Growth,” Mass High Tech ,4/30/01)
By April 2001, Bain had taken a once American-centric company and shifted its focus oversees, one industry publication labeling it “one of the biggest players” in the outsourcing industry (Soule, 04/30/01).
In Silver City, Bain had created almost a thousand American jobs just to siphon the profits from that work to build oversees facilities where their jobs would go to die.
Even before the company had hired its full contingent of new jobs, the company had positioned the Silver City facility to be outsourced to one of the many new foreign call centers Bain and Stream had built.
In October 2001, with oversees call centers profitable, Bain promptly took its money, including the millions provided by New Mexico taxpayers, and ran.
“Although the magnitude of Bain’s profit from the sale isn’t clear, the firm will probably register a substantial gain considering Stream’s recent performance. Kathleen Nordgren, a Stream press official, said that revenues climbed 36% from 1999 to 2000…” (David Carey and Sarah Cohen, “Solectron To Buy Bain Capital Unit, Daily Deal, 9/25/01)
Bain sold the company to Solectron which promptly completed the Bain process.
No more jobs in the immediate future
In 2003, Stream’s facilities in New Mexico and Montana were closed within weeks of each other, with executives telling a Montana paper, ” ‘[w}e’re definitely restructuring our business and adding capacity outside the United States and North America.’ That is to say, when 330 Stream International jobs leave Kalispell next month, they’ll likely head to foreign lands.’ ” (Michael Jamison, “Stream Jobs Flow Overseas,” Missoulian [Missoula, MT], 7/11/03)
The overnight layoffs cost Grant County it’s largest employer, spiked unemployment to 9.9% in 2002 and more than a year and a half later the community was still struggling to recover.
” ‘There’s a sense of urgency and everything we are doing is focused on action,” Economic Development Secretary Rick Homans said in April 2003 when announcing that state, federal and private money would be tapped to bring jobs to the area.’
“We’re not going to see any new jobs in the immediate future,” Grant County Commissioner Henry Torres told the Albuquerque Tribune. (Albuquerque Tribune, August 16, 2004).