Defunct auto supplier latest focus of Obama-Romney battle
Obama: “If your main argument for how to grow the economy is, 'I knew how to make a lot of money for investors,' then you're missing what this job is about."
DETROIT -- The Obama campaign continued its assault on Mitt Romney’s record at Bain Capital today as it said the investment firm that Romney founded was responsible for laying off nearly 1,000 employees at a now-defunct Michigan auto supplier.
Bain bought 39 percent of parts maker Cambridge Industries in 1995. Within two years, the investment firm owned a majority stake in Cambridge. By 2000, Cambridge suffered financial trouble stemming from an overeager acquisition strategy, mounting debt and years of earnings shortfalls, according to a Crain’s Detroit Business report at the time.
Crain’s Detroit Business is an affiliate of Automotive News.
That year Bain took Cambridge into Chapter 11 bankruptcy and sold the company to Meridian Automotive Systems, which slashed more than 1,000 jobs, according to current news reports. In its bankruptcy filing, Cambridge listed debt worth $459.7 million. In 2009, Meridian filed for bankruptcy and liquidated its assets.
Dozens of other large, U.S.-based automotive suppliers reorganized or liquidated under bankruptcy protection at about the same time as the Cambridge and Meridian bankruptcies.
In the past few weeks, the Obama campaign has sharpened its focus on Romney’s time at Bain, claiming that as a business executive Romney was more interested in earning profits than creating jobs.
The Obama campaign said Romney’s firm “went on an ‘aggressive acquisition binge’ racking up hundreds of millions of dollars in debt and laying off hundreds of workers, while paying itself millions of dollars in management fees,” The Detroit News reported today.
Democrats and Republicans have criticized the Obama campaign’s strategy, saying it is overly critical of private enterprise. Speaking to reporters at the NATO summit in Chicago on Monday, Obama defended the approach.
The president said private equity firms, like Bain, are a “healthy part of the free market,” but he dismissed the presumptive Republican nominee’s claims that his private-sector experience qualifies him to be president.
“If your main argument for how to grow the economy is ‘I knew how to make a lot of money for investors,’ then you’re missing what this job is about,” Obama said. “It doesn’t mean you weren’t good at private equity, but that’s not what my job is as president.”
Last Sunday, on NBC’s “Meet the Press,” Newark, N.J., Mayor Cory Booker called recent Obama ads regarding Bain “nauseating.” Booker later released a video clarifying his remarks, but Republicans, including members of the Romney campaign, took advantage of his comments.
“I agree with Mayor Booker who said that these attacks against Bain Capital and free enterprise are nauseating,” Eric Fehrnstrom, a senior adviser to the Romney campaign, said on MSNBC.
Reuters contributed to this report.
You can reach Joseph Lichterman at email@example.com.