Bain

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    Geoff Rehnert   Bain Capital colleague

    Geoff Rehnert is co-chief executive officer of the investment firm Audax Group. Previously, he served as managing director of Bain Capital, which he helped start with Mitt Romney in 1984. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum and Michael Kirk on June 12, 2012.

    And so he comes to you and he offers you -- they have just started Bain Capital?

    So Bain Capital was in process of being raised. So Bain Capital was conceived as a part of Bain & Company initially. So Bill Bain and his partners at Bain & Company thought that if they could do for the companies that they invested in or that they bought what they were doing for their clients that they would be even more profitable than just doing it on a consulting basis, so that was the whole concept behind Bain Capital.

    So Bill took two of the brightest, most capable vice presidents in the organization, Mitt and Coleman, and asked them to head up this new undertaking.

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    Geoff Rehnert   Bain Capital colleague

    Geoff Rehnert is co-chief executive officer of the investment firm Audax Group. Previously, he served as managing director of Bain Capital, which he helped start with Mitt Romney in 1984. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum and Michael Kirk on June 12, 2012.

    We've heard stories about Mitt sort of rallying the troops and kind of giving speeches. Tell me about the team of you that they brought together and what you set out to do.

    Yeah. Well, it's interesting, because Mitt had speaking skills and skills that suited him well in a large organization, but Bain Capital for the first four or five years was a very small organization. There was really a team of just four or five of us that invested that first fund. The first fund was raised at the end of 1984. It was a total of $37 million. At the time that was the largest first-time venture capital fund that had ever been raised. It was a nascent industry at the time. But it was a cottage industry, and the firms were all small, so we were a very small organization. So Mitt, his large-organization skills weren't as applicable to what we were doing.

    So what Mitt really did in the first several years was dig into the business itself and teach himself the business, because we were all new to venture capital. None of us had done leveraged buyouts; none of us had done venture capital investing. We were ex-consultants who had done very well in the strategy consulting arena, but this was a new industry, and Mitt, he rolled up his sleeves right alongside of us, and he dove in.

    And what were the risks of what were you doing? What was the challenge that stood in front of you?

    Well, the risks were that we would one, lose money; we would lose our investors' money, which we took that responsibility very seriously.

    The other risk was we would embarrass Bain & Company. Bain & Company had established a tremendous reputation, was selling its advice to large corporate clients, and so if we went out and we made a series of bad investments that lost money, it would reflect very poorly on Bain & Company.

    So we felt an enormous amount of pressure to be thoughtful, careful, and choose our initial investments wisely.

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    Related topics:
    Romney as a Leader

    Geoff Rehnert   Bain Capital colleague

    Geoff Rehnert is co-chief executive officer of the investment firm Audax Group. Previously, he served as managing director of Bain Capital, which he helped start with Mitt Romney in 1984. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum and Michael Kirk on June 12, 2012.

    And describe his leadership style.

    I'd say first and foremost Mitt leads by example. He is a person who never asks anybody to do something he wouldn't do himself. At least that was my experience of Mitt in the private equity business. He was running numbers himself; he was working on legal documents, figuring out how to structure investments. No detail was too small for him to get involved in, which shocked me. I never expected a person at his stature and his stage of life to dive in. He wouldn't even ask secretaries to make copies for him a lot of times.

    So he, Mitt, I think, first and foremost would be what I'd call a referent leader, someone that you look to and say, "OK, that is the way you do things."

    I'd say the next thing that really stands out about the way he leads is he is willing to make a decision, but he rarely tells people what to do. He likes to have spirited debate among the people working for him and with him. He believes that that kind of interaction leads to a better outcome than just command and control and sort of one person unilaterally making decisions. And he, I think, did a tremendous job. I think Bain Capital's track record proves out how effective that was. It was tremendously successful at Bain Capital. ...

    So as a young 20-something-year-old in that room being asked to come before him and debate, what was that like for you? Tell me about that experience.

    I was a pretty brash 26-year-old, so I enjoyed it. I enjoyed feeling like my opinion was valued and mattered.

    Mitt would argue the opposite side, even if he agreed with me, just to pressure-test my thinking and the thinking of others. He would really pressure-test it, which sometimes, if I really felt like it was so obvious we ought to do something or not do something, it would be challenging. But it really was demanding and intellectually rigorous, and it's something that developed my intellect and enhanced my capabilities enormously.

    So it's something that, particularly as time went on, I really came to appreciate, and then saw as Bain Capital grew and evolved how as we added people and as we developed competence in different areas and started new lines of business that that model really led to better decision making, better communication, and it actually got people to sort of deflate their egos. And that was a relatively novel way of managing in the 1980s and 1990s.

    Tell me what you mean by that. How did it make you deflate your egos?

    It meant that at the end of the day, the team and the organization was more important than any one of us. And Mitt put himself in that. There were deals Mitt advocated and advocated for and we didn't do oftentimes. If a majority of people didn't want to do it and could put forth intellectually strong arguments, based on analysis, based on facts, he would back off.

    So it really became about what is the right answer, what is true, not about who is more powerful than who and who is more important than who. And that's unusual in most organizations. Most businesses, that's typically in my experience not how things work.

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    Geoff Rehnert   Bain Capital colleague

    Geoff Rehnert is co-chief executive officer of the investment firm Audax Group. Previously, he served as managing director of Bain Capital, which he helped start with Mitt Romney in 1984. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum and Michael Kirk on June 12, 2012.

    I've heard the word "nervous" put next to his name. Was he a nervous guy?

    Mitt felt a lot of pressure. He was under an inordinate amount of pressure. He's someone who was used to being successful, used to being at the top of whatever it was he did. He was now entering into a new business where not only did he have to worry about figuring out how to get into that business, competing with some firms who had been doing it for a long time, very smart people, but he also had an audience of his peers, the partners at Bain & Company, looking very carefully at what he did.

    And Mitt was doing this with a young group of us who were all new to this business, so it was a big challenge. He felt a lot of pressure, and he felt a lot of responsibility to the people that he had raised money from to be successful.

    And who were those people that you were raising money from?

    The first fund was mostly individuals. The largest group of capital came from the partners of Bain & Company themselves, so there was a lot of pressure. We weren't just investing the reputation; most of the partners at Bain Capital put up a sizable portion of their net worths at that time to invest in this undertaking. They believed that much in the concept, and they had that much confidence that Mitt would figure it out.

    Were you the person that told the tie-flapping story, that he would --

    I think a lot of people have told that story.

    So tell me that.

    But yeah. There would be times where Mitt would sort of jokingly sit and flap his tie like, "Oh, man, this thing better work out." But he would do it playfully when we would be in a small group and sort of try to break the ice. Of course we were all nervous ourselves as well, but I think he particularly felt the pressure.

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    Geoff Rehnert   Bain Capital colleague

    Geoff Rehnert is co-chief executive officer of the investment firm Audax Group. Previously, he served as managing director of Bain Capital, which he helped start with Mitt Romney in 1984. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum and Michael Kirk on June 12, 2012.

    And the infamous photograph with the money in your hands -- tell me about that picture and the origins of it.

    Yeah. Well, that. We were posing for the first brochure. We had raised our first fund, and so we now needed to have some collateral materials to hand out to potential companies that we would invest in or acquire or intermediaries who would bring us companies. And so we had a very serious version of that shot where we were all standing there.

    And then we said, "Jeez, we just raised the fund; let's do a playful shot," and thought that it would be kind of amusing, kind of like celebrating your first paycheck or that kind of a celebration.

    None of us thought we would be the poster children for class warfare. I don't think any of us ever envisioned that there would be class warfare. That's what I find just so sad about this, is even five years ago, when that picture came out, people thought it was kind of funny and cute. I think it's sad that today it's being distorted to represent something that, one, is not there in Mitt's character. Mitt is not a person who flaunts money, and he's not about the money. And secondly, I just think it's tragic that people are sort of resentful of people who have been successful.

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    Geoff Rehnert   Bain Capital colleague

    Geoff Rehnert is co-chief executive officer of the investment firm Audax Group. Previously, he served as managing director of Bain Capital, which he helped start with Mitt Romney in 1984. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum and Michael Kirk on June 12, 2012.

    And are there examples of the way that his faith carried into his business dealings? Did you see that displayed?

    Mitt never made anyone feel uncomfortable about his faith. I was raised Roman Catholic, and I had never met a Mormon until I met Mitt, and so I was curious, so I would just ask him when we would be on business trips. But it never came up in any sort of way, shape or form in how we did business.

    The things that were notable about Mitt were he didn't swear; he didn't drink, but he never made anybody else feel uncomfortable for drinking. So drinking was a big part of -- continues to be a big part of business entertainment at times. [He was] always comfortable [with] people having drinks or cocktails. No one wanted to get sloppy drunk if you were working for him. That's not a good practice no matter who you're working for, I suspect. But it was nothing that made anyone uncomfortable.

    But Bain Capital had a different culture. I would say it was a healthier culture. Guys tended not to drink probably as much as the certain other firms, and family time was respected. ...

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    Geoff Rehnert   Bain Capital colleague

    Geoff Rehnert is co-chief executive officer of the investment firm Audax Group. Previously, he served as managing director of Bain Capital, which he helped start with Mitt Romney in 1984. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum and Michael Kirk on June 12, 2012.

    Tell me how the Staples deal came around.

    So Tom Stemberg hired a small investment bank here in Boston to try to raise money for him. It came over to us at Bain Capital in our relatively early days in the early part of 1986. And we were still in that stage where we hadn't quite yet hit our stride. And Tom came over, met with Mitt and a couple of us, and wound up finishing writing his business plan in our offices. We did a lot of analysis to validate Tom's concept that businesses, small businesses in particular, didn't know how much they were spending on office supplies.

    So Mitt is a very data-driven person, and Tom said: "The opinions you're hearing are not accurate. Go actually pull the invoices from these companies." So we had one of our analysts, Adam Kirsch, actually go through a lot of invoices of a lot of small businesses in the area, and we would ask them, "How much do you think you're spending on office supplies?" And we'd get one answer from the purchasing manager, the small business owner, and then we would pull the invoices, and we'd see they were actually spending huge, huge amounts relative to what they thought they were spending on office supplies.

    So when we went and said, "If you knew you were spending this much on office supplies, would you be willing to actually go pick up your supplies, as opposed to have somebody deliver them to you if you could save a significant amount?" And almost everyone said: "Yeah. I had no idea we were spending this much. Absolutely I would have someone go to a store." So that was the validation of the Staples concept.

    We opened the first store -- I think it was late 1986 when the first store opened in Brighton, [Mass.,] and it's been off to the races ever since for Staples. ...

    In terms of that sort of idea, you said he is a data-driven guy. And as I understand, he was a bit skeptical at first. And then is it the data that convinced him?

    Mitt is a data-driven person, and he is terrific at not just accepting data on face value but first of all cleaning the data, making sure that data is meaningful, and then he is terrific at analyzing it.

    And that was a rigorous discipline that underlied [sic] every investment we made. Everything we did at Bain Capital was very data-driven. Enormous amounts of analysis went into every investment, and actually went into how we ran ourselves and evaluated ourselves. So Mitt is a big believer that thoughtful people gathering data, analyzing it, figuring out what works, what doesn't work can lead to newer, better ways. ...

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    Tom Stemberg   Founder of Staples, Inc.

    (Text only) Tom Stemberg founded Staples and served as CEO for 16 years. Under Mitt Romney, Bain Capital helped finance the first Staples, which opened in Brighton, Mass. in 1986. Staples was one of Bain’s earliest investments. This is an edited transcript of an interview conducted on June 15, 2012.

    Read the full interview »

    So you go in and you see Mitt Romney for the first time. Where's the meeting? What's he like? What's his aspect, and how does it go?

    I'll never forget meeting Mitt the first time, because many venture capitalists, when you pitch this idea of saving on pencils and erasers and pens and diskettes, thought the idea was nonsense. Why would you ever want to save money on something like that? They didn't realize how much money it was costing them. And in Mitt's case, he is so cheap, the idea immediately resonated with him. You could see his excitement and enthusiasm.

    Of course, what happened then is Mitt has his team go to work on this, many of the same guys, like Josh Bekenstein, who are running Bain Capital today, and they come back and call me up and say: "Come in. We want to talk to you." And I said, "Yeah?" And he said: "Well, you know, we did some research. We polled 50 small companies we know, and your claim that they're spending $1,000-plus per employee per year is overstating the market by fivefold, because our research says it's only $200."

    Now, first of all, this was the first venture capital firm to do any research. I was already pretty impressed, the fact that they went through the effort. I said: "No, you don't understand. They don't know what they spend. Go check their invoices, and you'll find out that I'm right." Left the office thinking: "This is dead. Too bad. These guys are really nice guys. They really could have helped me."

    A week, 10 days later, they called back. "Come in again, will you? Well, you were right." They went out -- in those days it wasn't on computers; you had to actually literally add up on an adding machine all these invoices -- and sure enough, I was right. The market was even bigger, at which point we began negotiating a deal, and Mitt became our lead investor.

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    Related topics:
    Romney as a Leader

    Tom Stemberg   Founder of Staples, Inc.

    (Text only) Tom Stemberg founded Staples and served as CEO for 16 years. Under Mitt Romney, Bain Capital helped finance the first Staples, which opened in Brighton, Mass. in 1986. Staples was one of Bain’s earliest investments. This is an edited transcript of an interview conducted on June 15, 2012.

    Read the full interview »

    In that very first meeting, ... what was he like? What did he look like? How did he present himself? What was the feeling of it all?

    When you first walked in and saw Mitt, he looked like a guy who ought to be president of the United States. This guy, he looked perfect; he dressed perfect; he spoke perfectly. He asked the most poignant questions in a very, very nice way and didn't make you feel defensive and really drew the best or worst out of you. He was just really, really good.

    ... When he's skeptical, what's he like? Did you feel like, "Man, there's a lot of horsepower behind this engine"?

    After we started working together and Mitt was on our board, he had a very interesting way of probing you, and he would always ask these questions like: "You don't really mean that, do you? Do you really believe this market's going to grow at that? Should we really invest in this?"

    And you never knew, was he just probing you, or did he really question it, so you had to react as if he's really questioning it. All he's doing is always probing, wants to make sure you've done your homework, done your assumptions. I think it's the way he governed as governor. It's the way he'll be as president.

    Was he ever argumentative, angry, profane? You know what I mean. Was he one of those hotshots?

    I never heard Mitt utter a swear word. I've seen him get annoyed when he felt his questions weren't being answered. You could sense a certain annoyance. Never anger, though.

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    Tom Stemberg   Founder of Staples, Inc.

    (Text only) Tom Stemberg founded Staples and served as CEO for 16 years. Under Mitt Romney, Bain Capital helped finance the first Staples, which opened in Brighton, Mass. in 1986. Staples was one of Bain’s earliest investments. This is an edited transcript of an interview conducted on June 15, 2012.

    Read the full interview »

    How much did they kick in in the first instance?

    The first round of Staples, we raised a little over $4 million. To my best memory, Bain Capital represented $600 or $700,000 of that.

    And what did they do? The way I've read it, they were involved early, like the night before you guys are all still stocking the shelves?

    Staples is one of Bain Capital's very first investments, and they realized in order to grow this investment business, they had to create success. They set a sort of mode of operation which I think they follow through until today, knowing how they operate today, which is to get very involved in every company but in a very helpful and constructive way.

    So in the case of Staples, one of Mitt's young guys, Adam Kirsch, literally helped us put together our computer systems, helped us hire the head of IT [information technology] through his network of friends. He was an MIT [Massachusetts Institute of Technology] guy and had a lot of connections there. Mitt was a terrific cheerleader for the company.

    So the eve before the first Staples store opened on May 1, 1986, Mitt Romney surprised everybody at the store, along with my co-founder Leo Kahn, brought in boxloads of pizza. And we'd pulled one all-nighter, we're about to pull another all-nighter to live up to our promise [that] we're going to open on May 1, 1986, and he gave us all pizza, and he gave us a rah-rah speech. And you saw these young people, and they're bleary-eyed; they had tears in their eyes.

    He's got a way of motivating people. He talked a lot about how Bill Marriott taught you to treat everybody who entered your store or establishment as if they were guests in your home. And he told people, "We do this, you could be part of retailing history," which, of course, turned out to be true as well.

    So that's the speech. And was it genuine?

    Absolutely. Mitt's a genuine guy.

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    Geoff Rehnert   Bain Capital colleague

    Geoff Rehnert is co-chief executive officer of the investment firm Audax Group. Previously, he served as managing director of Bain Capital, which he helped start with Mitt Romney in 1984. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum and Michael Kirk on June 12, 2012.

    You said following the Staples deal, it was off to the races. You all became very successful, so tell me just how successful you became.

    Well, 1986 was an inflection point. We raised the fund in 1984. 1985 we made a few modest investments, but were really still sort of trying to figure it out. 1986 we did our first series of acquisitions, and we also financed a number of startups that became very successful. Staples, Sports Authority, Bright Horizons all sort of got financed in that period of time.

    And then we bought a company. In July our first real buyout was a company called Calumet Coach Company. We bought a company in the photo album business, the Holson Company, in October. And then we bought two businesses in December of 1986, a company called Accuride, which was a division of Firestone that made truck wheels and rims, and a company called Genstar Roofing that made asphalt roofing shingles.

    So by the end of 1986 we had sort of broken into the business and continued to do transactions through 1987, and then in 1988 sold a couple of those businesses. We sold Calumet Coach, made a terrific profit. We made 35 times our money on a $1 million investment. We sold Accuride. We made 24 times our money on a $2.5 million investment. So those two investments alone returned three times the entire fund that our investors had given us. So we were off to a good start.

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    Geoff Rehnert   Bain Capital colleague

    Geoff Rehnert is co-chief executive officer of the investment firm Audax Group. Previously, he served as managing director of Bain Capital, which he helped start with Mitt Romney in 1984. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum and Michael Kirk on June 12, 2012.

    There has been a big debate about Bain Capital and the idea of creating jobs versus taking jobs away. Talk to me about that as you hear that conversation about Bain as a job creator, and how you reconcile that.

    So while I was at Bain Capital -- I was there for 15 years, and Mitt was there for almost the entire time, virtually the entire time. He left in January of 1999; I left in July of 1999. While I was there, Bain Capital made a total of 150 investments. Fifty of those are venture capital investments, helping to finance the start-up of new businesses. Every single one of those businesses created jobs. Those are new companies that didn't exist before, by definition create jobs. Three of them alone created over 100,000 jobs: Staples, Bright Horizons, Sports Authority, just take those three companies right there. So there were a lot of jobs that were created through the venture capital investing.

    Then if you look at the private equity investing, private equity, buying companies and making them more profitable, there are several strategies to do that, one of which is to buy a company and to grow it. That was most of what Bain Capital did, and those companies all were net job creators. The companies that were true growth plays -- and there are a long list of them -- Calumet Coach Company would be a good example of one where we bought a company, it had about 90 employees. When we sold it two and a half years later, it had 250 employees.

    So that was characteristic of most of the buyouts. Now, there were also some buyouts which are turnarounds, and those are companies that would in all likelihood have gone out of business, in some cases were on the brink of going out of business, and Bain Capital bought them with the intent of trying to fix them up and save them and make them more profitable.

    Most of those deals also worked. You looked at deals like Physio-Controls, Wesley Jessen, VetcoGray, a deal that Mitt did in 1987. It was losing $60 million a year at the time we bought it, had plants, inefficiencies all around the world. Cleaned that business up, made it profitable, grew up, saved it, sold it, wound up saving I don't know how many jobs, and actually at the end of the day wound up creating jobs. ...

    ... Let me just get the timeline straight. At what point was Mitt called back to Bain & Company?

    So that was in October 1990.

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    Related topics:
    Romney as a Leader

    Geoff Rehnert   Bain Capital colleague

    Geoff Rehnert is co-chief executive officer of the investment firm Audax Group. Previously, he served as managing director of Bain Capital, which he helped start with Mitt Romney in 1984. This is an edited transcript of an interview conducted by producer Gabrielle Tenenbaum and Michael Kirk on June 12, 2012.

    So that was in 1990. So tell me about that story and what was asked of him.

    So in late October 1990 Bill Bain came over one day and looked pretty ashen and asked Mitt if he could come spend some time with him. And Mitt came back a couple hours later and said, "Bain & Company is in real trouble."

    Bain & Company, the consulting firm that we had all left to go start Bain Capital, had itself done a leveraged buyout, and so there was bank debt, and they had had a series of layoffs.

    If you think about the fall of 1990, it was kind of like the fall of 2008. There was the S&L crisis; Drexel Burnham had filed for bankruptcy earlier that year; the first war in Iraq was pending. So there was a lot of nervousness in the economy as a whole.

    So Bain & Company's business was falling off at the same time they were having internal issues. And there was real concern that Bain & Company itself might have to file for bankruptcy.

    So Bill Bain asked Mitt if he would step in and see if he could figure out how to resolve this. And on a dime, Mitt spent the next six months basically working seven days a week, 24/7, around the clock. And a number of us helped him out to get an understanding of what the facts were, to use the experience and knowledge we had of financing and negotiation and turning businesses around that we had at that point developed at Bain Capital to see if we could save Bain & Company.

    Bill Bain had hired Goldman Sachs to advise him on whether or not Bain & Company was salvageable, and they had said no, it was unsalvageable. It was inevitable it was going to file for bankruptcy.

    Mitt took issue with that and actually turned out to be able to get everyone to restructure their debt, get the employees to agree to stay in and stay in place, get Bill Bain and the other founders to transfer their ownership to the group of employees that stayed in place. And within about a year Mitt was able to start to withdraw and come back to Bain Capital on a full-time basis, and Bain & Company got back on its feet and has prospered ever since.

    How difficult were those decisions that he needed to make at that time to his former associates, the man who had hired him?

    I think there was a lot of emotion at the time. You have to remember Bain & Company had an enormous number of very, very intelligent, very motivated people who were very puzzled how they had wound up in this dire set of circumstances. And it took a lot of skill to defuse the emotion, to get people to sort of put aside their egos and do what was in everyone's collective best interest.

    Everyone was better off that was around the table by having Bain & Company survive. If Bain & Company had filed for bankruptcy, everyone was a loser. If Bain & Company survived, everyone would be better off than they would be without it going out of business.

    So there were a lot of people, any one of whom of a large number of people who could have single-handedly forced Bain to go into bankruptcy, and Mitt was able to get them to stand still, to work through it, to come up with a workable compromise. And it required an enormous amount of skill, diplomacy, energy and tenacity on his part. ...

    What were the tension points? How close was it? Was it really dicey and scary?

    Oh absolutely, yeah. I mean, emotions were at a fever pitch. There were a group of founders who had taken a dividend who were asked to put money back into the business. There were a group of vice presidents who felt that they had been misled, who were very, very angry about the financial circumstances of the business. There were bankers who were upset the business hadn’t met the projections that had been put out in front of it. And it was a very complicated set of circumstances.

    And the sharks from Goldman Sachs swimming in the water around.

    Well they got dismissed pretty quickly on. The partner from Goldman Sachs who was in charge of the assignment got into a bit of a debate with Mitt one Saturday afternoon, and he was, they were dismissed from the case after that.

    What happened?

    He -- we’re on TV. He told Mitt to go do something to himself, and I thought Mitt was going to slug him, and he, at the end of the day he didn't slug him. The guy was inappropriate, and it turned out he was wrong. He was making some assertions, and Mitt was trying to make the counterpoint, and he was talking over Mitt. And anyway, it wound up Goldman Sachs got fired, Mitt and a couple of us helped Mitt in the first couple of weeks, but then as it went on Mitt was able to get everybody stabilized. And Bob White actually worked very closely with Mitt throughout that process as sort of his chief of staff and did a terrific job supporting him through that turnaround.

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    The Loss to Kennedy

    Charley Manning   Adviser, 1994 Senate race

    Charley Manning is a Boston-based GOP adviser who served as chief strategist for Mitt Romney in his 1994 Senate race against Ted Kennedy. This is an edited transcript of an interview conducted by producers Michael Kirk and Gabrielle Tenenbaum on June 26, 2012.

    ... Isn't there a Bain moment, then, when they go after him on his record at Bain?

    Oh, sure, yes.

    That's the big bomb they drop.

    Right. What they did is, while Mitt was running against Teddy -- he had left in January, beginning of January in '94, had left Bain. Later that year, about June, a company that Bain owned bought a paper company, and one of the company's facilities was in Indiana. And they immediately tried to restructure the company. I think it had been a union company, and they wanted some concessions to keep it going, that type of thing.

    So that sort of went on through the summer, and it wasn't anything we knew about or were paying attention to in any way. And of course, the unions were backing Teddy in a huge way, and they got wind of this sort of labor unrest. And the Kennedy team went out there, ad team, and they put together these ads. You know, I give them credit -- people holding up signs, "Mitt Romney's trying to steal my job!" I'm sure the Kennedy people made all the signs and everything, because they, the folks at the paper company, had no idea who Mitt Romney was, let alone who probably Bain Capital was.

    It was a pretty big, it was a good ad. It really hit. But of course, it was totally unfair, because Mitt had nothing to do with the acquisition of the company that owned the plant; he was away from it.

    Then they decided to double down, and they brought a group of the paper workers out to Boston over the Columbus Day weekend. They arrived that Friday before Columbus Day weekend, and they had a rally in front of where Bain Capital's offices are, over in Copley Place. ...

    And we saw them on Sunday at the Columbus Day parade. They had them over there, had those folks over there. And I finally got to meet their union guy and some of the workers, and I said, "Hey, we'd really love to meet with you."

    So Mitt and Ann, everybody, we all marched in the parade. And then we called them, and Mitt and I went to see them, all those folks, on Sunday night. And Mitt was typical Mitt. He explained the sequence, explained what it was all about. And then, "Here's when you guys were acquired. I'm not with the company now. I made no decision in your acquisition or your work rules or anything."

    And they just said: "Can you help us? Is there anything you can do?" And Mitt said: "First of all, I'm not with the company. It would be wrong for me to interfere in a situation that I don't have anything to do with. I don't know what the numbers are. I don't know what the investment package is." And he just explained everything to them.

    And they all sort of looked at each other and said: "Then what are we doing out here if you can't help us? We came out to see if you could help us." And I said, "The Kennedy people are just using you guys to go after Mitt."

    So the very next day they went back to Indiana. But between the ads and then that media pulse that the Kennedy people and their friends in the unions built of bringing the workers out here, it was the story for 24 hours a day for over that whole Columbus Day weekend. ...

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