Claim: A new advertisement endorsed by President Barack Obama that is airing on KLAS-TV Channel 8 states: "These appliances could have been made here in America but a company called Global Tech maximized profits by paying its workers next to nothing under sweatshop conditions in China. When Mitt Romney led Bain they saw Global Tech as a good investment, even knowing that the firm promoted its practice of exploiting low-wage labor to its investors. Mitt Romney, tough on China? Since when?"
Verdict: Partially true and partially misleading. The ad from Democrat Obama mines a Sept. 25 story from the Boston Globe in which it was reported that Republican presidential nominee Romney invested in Global Tech Appliances in 1998 as president and CEO of Brookside Inc. The newspaper reported that Brookside Capital Partners Fund, affiliated with Romney's private equity firm Bain Capital, reportedly acquired roughly 6 percent of Global Tech after learning that the appliance maker used inexpensive Chinese laborers who also worked long hours and lived in crowded dormitories. The newspaper attributed its information to Securities and Exchange Commission documents first uncovered by Mother Jones magazine.
The ad is misleading for at least two reasons. One is that anyone who ever invested in Nike, Apple, McDonald's or any number of other publicly traded American companies that have done business in China and elsewhere in Southeast Asia could have been accused of the same thing the ad blames Romney of doing. There has been so much publicity over the years about low wages and poor working conditions in that part of the world that it shouldn't surprise any investor when they read about American companies allegedly exploiting foreign labor. Despite this, Americans continue to invest in these companies and buy their products. Another problem with the ad is that it says the same appliances can be made in the United States but doesn't say whether those products would cost consumers about the same or be priced much higher due to higher American wages.
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