Mitt Romney: Job Creator or Corporate Raider?

NEW YORK ( TheStreet) -- As the 2012 presidential campaign season swings into high gear, we're going to hear a lot about presumptive Republican nominee Mitt Romney's record on job creation.

Between his tenure at Bain Capital and his time as governor of Massachusetts, there'll be plenty for politicians and pundits alike to discuss. Here are some of the highlights we can expect to hear from the campaign trail:

Mitt Romney

Bain Capital: the Good, the Bad and the Hard-to-Quantify. In 1984, Romney left management consulting firm Bain & Company to co-found the spin-off private equity investment firm Bain Capital.

For the next 15 years, Romney presided over Bain Capital's operations, which shifted focus over time from venture capital to leveraged buyouts.

Make no mistake about it: Bain Capital's purpose was to make money for its investors, and it did so hand over fist. From its 1986 success investing in what was then a small office supply store called Staples ( SPLS) (Romney fondly recalls stocking the store's shelves himself) until Romney left in 1999, Bain made billions. Along the way, it purchased at least five companies that subsequently ended up in bankruptcy even as Bain walked away with eye-popping profits:
  • American Pad & Paper: Bain invested $5 million in the small paper company in 1992, and reportedly collected $100 million in dividends on that investment. AMPAD went bankrupt in 2000, laying off 385 employees.
  • Dade Behring: Bain Capital invested $415 million in a leveraged buyout in 1994, borrowed an additional $421 million and ultimately walked away with $1.78 billion. Dade filed for bankruptcy in 2002, and 2,000 workers lost their jobs.
  • DDI Corporation: Bain Capital reportedly invested $46.3 million in 1997, reaping $85.5 million in profits and an additional $10 million in management fees. When the company later went bankrupt, 2,100 workers were let go.
  • GS International: In a somewhat less profitable transaction, Bain Capital invested $60 million in 1993 and received $65 million in dividends. This company, too, went bankrupt in 2002, and 750 workers lost their jobs.
  • Stage Stores: Bain invested $5 million to purchase the company and took it public in the mid-'90s, reaping $100 million from stock offerings. Stage filed for bankruptcy in 2000, and 5,795 workers reportedly were let go.

Romney himself profited handsomely from his time at Bain Capital. Although the exact details of his personal financials are not available, news reports estimate his net worth at somewhere between $190 and $250 million, much of it derived from his Bain Capital days. Very rough math might suggest that Romney made as much as $20,000 per job lost.

In fairness to Romney, however, Bain Capital purchased more than 115 companies during his tenure, and Staples wasn't its only success. The Romney campaign points to household-name companies such as Domino's Pizza ( DPZ) and Sports Authority to support its claim that Bain Capital actually created approximately 120,000 jobs during the Romney era.

But that number may also be misleading, because job creation at successful companies is usually more attributable to dedicated management than to investors or consultants.

Romney's job as head of Bain Capital was to make a handsome return for investors. His goal would have been to maximize efficiency and profits, not to ensure that people with steady jobs got to keep them. Consequently, although jobs were created, it's not clear how much of the credit should go to Bain and Romney.

The Massachusetts Miracle -- or Not. Romney proudly touts his success at creating jobs in Massachusetts, but the facts may not help him.

According to MarketWatch, Massachusetts ranked 50th out of the 50 states in job growth during Romney's first year in office, and things improved very little thereafter.

By the end of his term, Massachusetts was still 47th, ranking above only rustbelt states Michigan and Ohio and Hurricane Katrina-wracked Louisiana. While groups were growing nationwide at more than 5%, Massachusetts limped along at a bare 0.9%.

Yes, some jobs may have been created in Massachusetts during Romney's tenure, but not at a level that unemployed American voters are likely to find reassuring.

So, who is the real Mitt Romney? It's clear that Romney will continue to portray himself as a savvy businessman who can put America back to work, and that President Obama will want to characterize him as a heartless corporate pirate who got filthy rich on other people's misery.

The truth undoubtedly lies somewhere in between, but Romney's tendency to publicly stumble over his own wealth won't help him in the polls. The Internet is already full of awkward Romney quotes such as:
  • "Corporations are people, my friend;
  • "I like being able to fire people;" and
  • "I'm not concerned about the very poor."

All of those quotes have been taken out of context and stripped of whatever nuance Romney intended. Taken together, though, they form a fairly compelling -- if not necessarily accurate -- picture of a man with far more money than heart.

And why should investors care? Well, if corporate America likes Romney's promise of a business-friendly White House, there should be plenty of concern about how Romney's job creation record plays on the campaign trail.

Corporations may be able to donate big money to presidential candidates these days, but it's still individual human voters who'll decide whether to vote Romney in or out.

Perhaps, instead of essentially promising to create jobs himself, Romney should focus his message on how making companies profitable and encouraging economic growth will create the need for well-paid workers.

It's an honest message, and one that might just appeal to voters. If Romney gets mired in his arguably ambiguous record, or continues to arm his critics with quotes suggesting that he's just too rich to care about ordinary Americans, President Obama is almost certain to win another four years in the White House.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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