Romney firm tied to labor fight; Jobs, benefits slashed at Ind. paper plant

Romney firm tied to labor fight; Jobs, benefits slashed at Ind. paper plant

By Frank Phillips, Globe Staff

September 23, 1994, Friday, City Edition

A venture capital company run by US Senate Republican hopeful Mitt Romney is the primary investor in a firm involved in an ugly labor dispute in Indiana where worker salaries and benefits have been slashed and strike-breakers hired.

Bain Capital, Romney's Boston-based firm, has the controlling interest in Ampad Corp. of Dallas, which last summer took over a Marion, Ind., paper plant and laid off one-fifth of its workers, cut wages, sharply reduced health benefits and eliminated the company retirement plan.

The workers, led by the International Paper Workers Local 154, went out on strike Sept. 1. Since then, Ampad has hired a half-dozen replacement workers and advertised in the local paper each week for additional workers to cross picket lines, union officials said.

As a candidate, Romney has touted his business record, saying he helped to create 10,000 new jobs through his venture capital investments. He acknowledged this week that the 10,000 figure is a "net" sum and that some of the investments were in firms that failed or had to lay off workers.

Romney said yesterday that layoffs can be a part of doing business.

"This is not fantasy land," said Romney. "This is the real world and in the real world there is nothing wrong with companies trying to compete, trying to stay alive, trying to make money."

Sen. Edward M. Kennedy and his political allies have questioned Romney's business claims. Kennedy has even begun running a TV ad that accuses Romney of making $ 11 million while workers at one of the firms in which he has invested and helps run does not provide health benefits to many workers. The company, Staples Inc., an office supply chain, provides health care for full-time workers, but not for part-time employees.

Rich Rogers, the political director of the Massachusetts AFL-CIO, an organization with strong ties to Kennedy, said the reports of the Bain-owned company's problems in Marion are evidence that Romney is insensitive to workers.

"Romney is just another robber baron," Rogers said. "If they look deep enough, they'll find his firm destroyed 10 jobs for every job they have allegedly created."

The Marion strike began after Ampad bought the plant in July and within hours released some 250 plant workers. It later hired back all but 58. Among those laid off were two pregnant women, union officials said.
Ampad then cut the hourly wages from $ 10.22 per hour to $ 7.88, did away with the retirement plan, and tripled the co-payments for the health plan.

"Clearly there is a naivete which sometimes exists in people who have not been in the real world, working with real businesses with real competition trying to keep jobs and businesses alive," Romney said. "They live in a never-never land where not all businesses get better, not all businesses grow."

Ampad's president, Charles Hanson, said Romney is not involved in the operation of his company. He said three of Romney's Bain partners sit on the Ampad board of directors. Bain invested $ 5.1 million in the company in 1992, according to documents obtained by the Globe. In that year, the firm had revenues of about $ 114 million.
Reports of Bain's involvement in the Marion plant come as Romney, facing increasing attacks on his business record and abortion positions, yesterday tried to regain the offensive with a new ad charging Kennedy with making "distorted negative attacks" on him.

In a tough counterattack ad that the Romney campaign began airing yesterday, the GOP candidate denounces Kennedy's current 30-second ad challenging Romney's business record and accusing Romney of distorting the senator's positions.

The Romney ads, apparently made before Kennedy began airing his own ads, do not mention the specific charges leveled by the senator.

"Ted Kennedy's distorted negative attacks on me are wrong and more than anything else these cynical old-style politics prove he has been in Washington too long," Romney says in the ad as he walks across the backyard of his Belmont home.

"The real people I talk to every day are more interested in getting serious on crime, reforming welfare and creating real jobs," Romney states. "They want to hear our differences on issues that matter in their lives."
Romney, moving closer to the camera, then admonishes the 62-year-old senator: "So, how about it Ted. You talk about your plans, and I'll talk about mine."

Kennedy's press secretary Rick Gureghian said the Kennedy campaign's current ad is responding to the Romney media blitz of the last several weeks attacking the senator's record on crime and welfare.

"He has shown himself to be nothing more than a caricature of what is wrong in politics: windy rhetoric, little substance, no sense of humor, and recklessness with the truth," Gureghian said.

Meanwhile, Joyce Cuhna, the executive director of Mass Choice, the state's leading abortion rights group, read a statement at the State House to reporters, denouncing Romney's self-proclaimed "prochoice" abortion position. She said the group plans to endorse Kennedy.

"Mitt Romney is multiple choice," Cunha said, citing his hesitancy to support full federal funding for abortions and his refusal to support a Senate bill to codify abortion rights into law.