USW Reacts to Report on Romney's Bain Capital Investment In Brutal Chinese Sweatshop Described at Boca Raton Fundraiser

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Oct 01, 2012, 10:39 ET

PITTSBURGH, Oct. 1, 2012 /PRNewswire-USNewswire/ -- Leo W. Gerard, president of the United Steelworkers (USW) reacted today to a new global labor rights report that cites Republican Presidential Candidate Mitt Romney as having "knowingly invested in a brutal Chinese Dongguan sweatshop," while CEO for Bain Capital through the affiliated Brookside Fund for up to $23 million between 1998-2000.

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The labor rights report matched U.S. Securities and Exchange filings, plus information revealed by Romney in a 1998 meeting at the Federal Reserve Bank of Boston, and from a surreptitious video recording at a Boca Raton fundraiser released in mid-September by the Mother Jones Magazine. In the video, Romney personally described his private equity days: "We went to China to buy a factory there."

The USW leader challenged Romney on his $23 million investment in the Dongguan sweatshop: "Can you explain to the American people what you were thinking as CEO of Bain Capital when you learned the pittance the Chinese workers earned at 24 cents an hour, the grueling hours and brutal sweatshop conditions?"

According to the report published by the Institute for Global Labour and Human Rights, the factory Romney cited was called Global-Tech Appliances Inc., which employed about 5,000 young women. The plant in Dongguan City, Guangdong, China, made small appliances in sweatshop conditions for Hamilton Beach, Sunbeam, Proctor Silex and Revlon behind barbed wire fences in the town of Qing-Xi.

Gerard called on Romney to own up to his irresponsibility as a businessman who exploited both American and Chinese workers. "Here's more evidence that Romney is a plutocrat who only values his own wealth, while outsourcing American jobs to Chinese factories.

"It's a sweatshop factory where thousands of young women living in dorms -- 12 to a room -- made coffee pots, toasters and hair dryers for export sales to the U.S."

The global labor institute report documented Romney as the sole investor and shareholder in Brookside Capital Partners Fund, and also the Sankaty High Yield Asset Investors, which was incorporated in Bermuda to avoid taxes. The report used 1998 and later filings with the U.S. Securities and Exchange Commission – also cited by Mother Jones Magazine and later other investigative reporters -- to show the Brookside Fund invested up to $23 million in Global-Tech between April 1998 and August 2000.

In the Boca Raton video, Romney described the pay and conditions he witnessed at the appliance factory, saying the workers were almost all young women between the ages of about 18 and 22, or 23.

"And they work in these huge factories; they made various uh, small appliances. And uh, as we were walking through this facility, seeing them work, the number of hours they worked per day, the pittance they earned, living in dormitories with uh, with little bathrooms maybe 10, 10 room, rooms. And the rooms they have 12 girls per room. Three bunk beds on top of each other."

Romney proceeded to relate in the same video: "And around this factory was a fence, a huge fence with barbed wire and guard towers. And, and we said gosh! I can't believe that you, you know, keep these girls in! They said, no, no, no. This is to keep other people from coming in Because people want so badly to come work in this factory that we have to keep them out."

The report is titled: Global-Tech – Betting Against American Workers, was written by the Institute's director, Charles Kernaghan. He asked: "Does Mr. Romney seriously believe that young men and women in China are racing to climb over fortress-like walls topped with barbed wire, just to get a poorly paid job at Global-Tech?

"Or is it possible that the barbed wire and armed guards are meant to lock the Chinese workers in and strip them of their legal rights?"

Kernaghan provides in the report, photos of the workers and documentation with pay stubs and journals by workers in a chapter titled, 'Misery Updated,' that makes clear in 2012 illegal sweatshop conditions persist at Global-Tech in China.

He publishes photos by workers of primitive and filthy dorms with squat toilets. Other photos show a workplace cafeteria, where he describes barely edible and frequently rotten food. "Global-Tech workers are easily hired, but then they are trapped and cheated of their wages if they try to leave, as well as being cheated of healthcare and other benefits.

"Sadly, in 2012, Global-Tech remains a brutal sweatshop, where workers are paid starvation wages of $1.00 an hour and have no rights. Today at Global-Tech, every single labor law in China is violated: primitive, filthy dorm conditions are the norm; routine 15-16-hour shifts prevail, along with grueling 105-to-112 hour, seven-day work weeks."

Kernaghan wrote that 800 high school student interns – many exhausted children just 16-years-old, are forced to work the grueling 15-16-hour shifts with no overtime pay at Global-Tech. "As of 2012, U.S. wages for the manufacturing of electrical equipment and appliances are $17.93 an hour, while wages at Global-Tech for similar work are just $1.00 an hour, or just six percent of U.S. wages.

"In the context of Mr. Romney's present 'get tough on China' stance, it would be critical for Mr. Romney to clarify exactly what he and Bain Capital did at the Global-Tech factory in Dongguan, China to push back against the evident abuses in the factory and to assure respect for human, women's and workers' rights."

Contact: Gary Hubbard, 202-778-4384; 202-256-8125; [email protected]

SOURCE United Steelworkers (USW)