MITT ROMNEY’S first reaction was: “What is happening to the jobs?’’
I had called then-Governor Romney at his New Hampshire vacation home in 2003 to inform him that the John Hancock Financial Services, a century-old Boston company, was being sold to a Canadian corporation.
I thought it would be a simple courtesy call, but Romney peppered me with dozens of questions such as:
■ Are you going to pay for your stock premium with job losses?
■Are jobs being shipped to Canada?
■What quality jobs will be left in Massachusetts?
■What are the chances there will be some job increase if the merger works?
■Are Canadian regulators requiring certain job levels in Toronto?
And on and on.
What I thought was going to be a simple phone call between a CEO and a governor turned into an inquisition. A friendly one, but without question, it was a combination elected official/Wall Street savvy inquisition.
He asked for a Monday presentation in his office to cover the details. At that meeting, the questions continued.
Romney made it clear that he needed to be satisfied that there would be no exodus of jobs and no mass elimination of jobs. He even discussed ideas for new jobs. He was well aware that, as governor, he could easily place regulatory and public relations roadblocks in our path.
I did not expect real pushback. After all, he’s a capitalist. But sitting in public office, he showed a different side. He used his knowledge of capitalism and free markets to make certain the Massachusetts job picture would not be negatively impacted. While he could not predict the future stock market crash and recession, he was determined that there would be no job loss on his watch. And he even pushed for new jobs.
In the coming weeks and months of Campaign 2012, there will be great criticism, exaggeration, and malicious attacks centered on Romney’s role at Bain Capital, the source of his wealth.
Private equity firms like Bain Capital sometimes purchase companies that are in great financial condition if there is a financial upside to the investment. More often than not, though, they select companies that are financially weak, but may have potential. Naturally, some of these will fail. They probably would have failed anyway.
It is not in the interest of the private equity company nor its investors to hang on to a company that is destined to fail. They get rewarded with successes. Sometimes those successes are pure financial plays. A company is purchased, restructured, often with the loss of jobs, and sold. This creates not only financial reward for the investors but also creates capital for private equity firms to reinvest in other companies.
It is this type of success, the kind Romney talks about on the campaign trail, that is attractive. It results in new ideas, great products, emerging markets, geographic expansion, growing profits - and thousands of new jobs.
The fact is Romney is familiar with all three investment types - failure, success through financial engineering, and success through dramatic growth. It is the latter that he refers to most and is the primary source of his wealth while at Bain Capital.
There is little about Romney’s agenda I agree with, and I doubt I will vote for him.
But the idea that he does not know how to create or preserve jobs is ridiculous. And the idea that President Obama and the Republican presidential contenders know more than Romney is even more ridiculous. He has walked the talk.
When Romney is wearing a public office hat, CEOs have to contend with a knowledgeable, formidable capitalist who doesn’t scare easily and places employment at the very top his priorities.David D’Alessandro is former CEO of John Hancock Financial Services.