Thursday, January 12, 2012

I am not a big supporter of Mitt Romney but having experience with turnaround companies I must clear something up. In the late 70's Pertec's techknowledgy was outdated and had little if any hope of continuing. So the new management bought up a bunch of computer companies with similar issues. They sold off everything that was thought to have future value. Cut expenses to the bone and went bankrupt. Top middle, and some lower level management did well (they saw what was coming and prepared for it) but most employees were about of a job. This was a calculated plan. My next encounter with a capital venture company was as a computer dealer of Rexon and other products. Two venture capital companies took over the operations of Rexon and a tape drive company started and operated by Sr. Ben Wang. Both companies had a large investment in technkowledgy that was being surpassed by new ones. The investment for these two companies to compete was just too much. The venture capital companies sold off everything they could and drained off everything leaving nothing but skin and bone. Rexon and Wangtech went under. Again management and the venture capital companies did very well while Rexon and Wangtech employees were out of jobs. There was no hope for any other outcome. The action taken by the venture capital companies was not antagonistic towards anyone. They did not start out to raid these companies. They brought about a strategic end. Much like an army would retreat and save what was possible. Yes the venture capital companies made a bunch of money but they did not steal from anyone. In a capitalistic system there is the possibility of losing. There is a risk involved with a chance of making a profit. Not all will survive, just like in nature. The company that Mitt Romney ran helped many companies to better times, some were doomed to fail. That is business. A much better outcome than when the government decides who will benefit from taxpayer funds. It is not a perfect system but the best that there is