FACT CHECK: Steel Dynamics Got Three Times More Money From The Government Than Romney’s Firm
Steel Dynamics, the company highlighted in a video at the Republican National Convention as evidence of Mitt Romney’s success as a corporate buyout specialist, actually received three times more money from the government than it did from Bain Capital. The truth is that Steel Dynamics received $60 million in government incentives to build two steel plants and the company’s increase in workforce was a result of acquisitions, which came years after Romney and Bain had anything to do with it. To make the distortion even worse, it comes from a candidate who opposed rescue loans for the auto industry when there were 1 million jobs on the line, has railed against “picking winners and losers” on the campaign trail, and who has made the debunked “you didn’t build that” attack the central premise of his campaign.
STEEL DYNAMICS RECEIVED $60 MILLION IN GOVERNMENT INCENTIVES TO BUILD TWO STEEL PLANTS AND THEIR JOB GROWTH CAME THROUGH ACQUISITIONS YEARS AFTER BAIN EXITED
Bain Capital Invested In Steel Dynamics In 1994 And Sold Its Stake Five Years Later For An $85 Million Return. “Bain Capital began looking at investing in the steel start-up in late 1993. At the time, Steel Dynamics was weighing where to locate its first plant, based in part on which region offered the best tax incentives. In June 1994, Bain put $18.2 million into Steel Dynamics, making it the largest domestic equity holder. It sold its stake five years later for $104 million, a return of more than $85 million.” [Los Angeles Times, 1/12/12]
When Bain Capital Invested In Steel Dynamics, The State Of Indiana And DeKalb County Pledged $37 Million In Subsidies And Grants For Steel Dynamics’ Plant Project. “As Bain made its investment, the state and county pledged $37 million in subsidies and grants for the $385-million plant project. … The county promised $23.4 million in property tax abatements and tax increment finance bonds, as well as a new income tax to generate economic development funds. The latter was required by the state, which shelled out another $13.6 million in tax credits, energy grants, workforce training and funds for roads.” [Los Angeles Times, 1/12/12]
1998: When Steel Dynamics Was Looking To Build A New Steel Plant, Whitley County Issued A $13 Million Taxable Industrial Revenue Bond Along With A Separate $10 Million Bond For Sewer And Water Improvements To Convince Steel Dynamics To Locate The Plant In Their County. “In 1998, state and local officials in Indiana assembled a package of incentives to convince Steel Dynamics Inc. (STLD) (STLD) to locate a $341 million steel plant in Whitley County, in the state’s northeast corner. Whitley County issued a $13 million taxable industrial revenue bond to buy the giant caster at the heart of the steel- making operation along with a separate $10 million bond for sewer and water improvements. State officials kicked in workforce training aid.” [Bloomberg Businessweek, 6/5/12]
1999: Steel Dynamics And Its Subsidiary Employed 568 Workers. “SDI's work force consisted of 506 employees as of February 28, 1999. In addition, IDI had 62 employees as of February 28, 1999.” [Steel Dynamics, Form 10-K405, 3/31/99]
2006: Steel Dynamics Nearly Doubled Its Employee Count By Merging With Another Steelmaker Named Roanoke Electric Adding 1,622 Employees Through Its Merger. “Bid farewell to Roanoke Electric Steel Corp., a homegrown company founded by legendary Roanoke businessman John W. (Jack) Hancock Jr. Greet its new identity and less-than-melodious new name -- Merchant Bar Products Division of Steel Dynamics Inc. At a special meeting Tuesday, a formal tally of Roanoke Electric Steel shareholders determined they had overwhelmingly approved the company's merger with Steel Dynamics, based in Fort Wayne, Ind. The transaction, valued at about $281 million, will make Roanoke Electric Steel, founded in 1955, a wholly owned subsidiary of Steel Dynamics Inc., founded in 1993. … Keith Busse, president and chief executive officer of Steel Dynamics, and other executives who helped found the company flew in for Tuesday's meeting. Last year, the Association for Iron & Steel Technology named Busse "Steelmaker of the Year." Steel Dynamics is said to be the sixth largest steel producer in the U.S. The company had 1,795 employees at the end of 2005. Roanoke Electric Steel and its subsidiaries have about 1,622 employees.” [Roanoke Times, 4/12/06]
October 2007: Steel Dynamics Added 2,000 People To Its Payroll By Merging With OmniSource Corporation, One Of America’s Largest Scrap Recycling Companies. “We acquired OmniSource Corporation, one of North America's largest scrap recycling companies on October 26, 2007. OmniSource employs more than 2,000 people in 42 facilities in the Midwest and eastern United States and Canada. OmniSource's operations include both ferrous and nonferrous scrap metal processing, transportation, marketing, brokerage and scrap management and consulting services. In addition, OmniSource designs, installs and manages customized scrap management programs for industrial manufacturing companies at more than 100 locations throughout North America.” [Steel Dynamics, Form 10-K405, Filed 2/27/08