Sunday, October 28, 2012

Sensata Tells All

“Governor, you’re the last person to get tough on China,” President Obama remarked in the last debate.

He’s so right.

But don’t take his word for it. Just listen to some of people who are paying the ultimate price for Mitt Romney’s “business experience”.  

"In the next three months I will not have a job, I'm pretty sure, " said Cheryl Randecker of Bain Capital-owned Sensata Technologies, based in Freeport, Illinois,."For sure by the end of the year we will be completely done, and it will be moved to China."

At last report, the day that Cheryl's job will end is Nov. 5th, the day before the election.

"They're moving equipment out, and they're letting us know everyday that they're leaving, no matter what, that they're still sending the operation over to China. To me they're letting us know that we mean nothing to them. We're just nobody. We're nothing."

That was Dot Turner, a Sensata employee who was asked to train her Chinese replacement. She's worked for Sensata for 43 years.

43 years.  Half a lifetime, for one company.

That loyalty is so rare these days.

Meanwhile, over 500 miles to the east, Mitt Romney is telling a crowd in Ohio that on "day one!" he's going to get tough with China. He's going to label them a currency manipulator, even though our past two Presidents thought better of the idea. Oh, he's going to do all sorts of things to punish those "cheaters", you know. The implication is that this will instantly bring back all those manufacturing jobs to America.
Day one!, and he will wave the magic wand, and at his word, it will all come true.

Don't believe him for a second.

Mitt Romney will do no such thing.

Romney could stop outsourcing those Sensata jobs with one phone call. He has that kind of power, right now, as the former CEO of the company who currently has controlling interest.

He could save those jobs, today.

He won’t even meet with the employees, or respond to their pleas and petitions to save those jobs. They are being ignored.

Mitt Romney may not head Bain Capital anymore, but he sure benefits for their outsourcing practices - especially when it comes to Sensata Technologies. According to the New York Times, Romney "has millions invested in a series of Bain funds that have a controlling stake in Sensata" and that the investment has quadrupled in value since 2006.

Now, Romney may claim that those funds are in a blind trust, but upon investigation it's revealed that this "blind trust" is controlled by Romney's personal lawyer Brad Malt, and does not meet the qualifications of a true blind trust under federal standards.

And there’s more. Romney has benefited by transferring over $700,000 in Sensata stock to a non-profit foundation that he controls. Not only does he get to deduct that full amount on his taxes, he gets to avoid capital gains taxes as the stock price increases! Nice, huh?

Does anyone honestly think that he is going to do anything to upset that deal? Of course not. After all, one of the guys on Sensata’s board has donated $665,000 to the Romney campaign.

He won’t do it on “day one!”, he won’t do it on any day, anytime soon.

If Romney was serious about “getting tough on China”, or stopping the offshoring of American jobs, he could have called for his fellow Republicans in Congress to pass the Bring Jobs Home Act. The bill would have ended tax breaks for companies moving overseas and would have given tax credits to those who brought jobs back home. It wasn't a cure-all, but it was a start.

Senate Republicans shot it down.

If Romney were serious about his charges of currency manipulation, he would have called for Congress to pass the Currency Reform Fair Trade Act, which currently has 234 House co-sponsors and addresses all major currencies. Republican leadership refuses to bring it to the floor. Why? Because if it actually passed, Romney wouldn't have anything to say on the campaign trail, would he?

Business leaders are starting to get nervous about Romney's bluster though. Government officials in China are not happy with the rhetoric either, and some are fearing a trade war could blow up if Romney carries through with his threats. Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, told CNN, "China has a well-established practice of retaliating when the U.S. does something it thinks is out of bounds."

The businesses Hufbauer speaks are pretty sure that Romney is bluffing.  If not, they face increased costs for goods and services they purchase now, and the potential of decreased exports of American products to China - which have boomed from $16.2 billion in 2010 to $103.9 billion in 2011, making the country the third largest purchaser of American goods behind Mexico and Canada.

"'I think at this point they're assuming it's tough talk, but the tougher it gets, the more they get nervous,' said Hufbauer."

They shouldn't worry. It’s all talk, designed to fool the voters.

Read his quote to CNN: “I will pursue a comprehensive strategy to confront China's unfair trade practices and ensure a level playing field where our businesses can compete and win." This came on the heels of President Obama taking action at the World Trade Organization concerning auto parts exports - the same type of jobs that Sensata is in the process of moving to China.

“Comprehensive strategy” is code for “continuing to implement my tax policies that reward offshoring.”  One economist estimated Romney’s territorial tax policy would cost us 800,000 jobs, as companies that would be free of taxation on foreign profits are encouraged to move more jobs overseas.

Where do those profits go? Offshore tax havens, hidden on tax returns that businessmen like Romney will not disclose to the public. Don’t look for that policy to change on “day one!” either.

A vote for Romney is a vote to continue this practice of profits over people. But you know that already, don't you?