Little did I know that my layoff in 1995 from Dupont Medical Products was a God-send that saved my Dupont pension from the Bain Capital boogey-men

New England Nuclear logo

After college, I started working for a little medical diagnostics company in Worcester, Massachusetts known as New England Nuclear in 1974.  We occupied two converted former residential houses on Harvard Street, which was a newly zoned business district.  Our specialty was manufacturing medical diagnostic kits that utilized a radioactive "tracer" component.

When I began working there, the company had sites in Worcester, Boston and Westwood, Massachusetts.  We didn't make much money then, but it seemed the owners were satisfied with their share of small profits, which still allowed them to live well.  Executive salaries in the tens of millions of dollars was not common and really could never have been accommodated given our tiny profits at the time.  It was a different time then.  The profit motive was not the only consideration to businessmen at that time.  Employees made the difference and executives realized that and honored them for it.  We all could feel the warm concern that our employers had for us.  Many of us worked for them for a long time.  We were a small "family" that grew with each other.  We considered ourselves scientifically trained intellectuals and all had respect for each other.   We had fun doing our jobs and fun socializing with each other.

Investment in research helped us rapidly develop a number of new diagnostics kits and our product line and profits began to increase.  In about a year after I started, the business  expanded and moved from Worcester to a nice new facility in Billerica.  And that is where I worked for the next 20 years.

In 1982, Dupont Company became interested in our little company and purchased us.  It was really a good thing for our company.  Dupont management was very knowledgeable and taught us much about managing a company.  But this huge Corporation was very different than anything we knew before.  The corporate culture was very structured and inflexible.   The environment became somewhat more uneasy and competitions between departments began to arise.  As Dupont began to bring in their own people some of the original members of our New England Nuclear team lost out on promotions.  We played second fiddle to Dupont's own talented organization.

Around 1992, the newest thing to managing a business was Manufacturing Requirements Planning (MRP). The essence of MRP was to implement a computer tracked transactional system that allowed management and business users to have much better understanding of their sales, production capacity, inventory, purchases and financials.  We began an implementation of MRP in 1992.  We did a good job of implementing that computer system and became a "Class A" manufacturing company within two years of implementing it.  It gave management a better understanding of our business activities, future potential and financial situation.

In anticipation of undisclosed future actions, Dupont management moved the people from the Billerica diagnostics operations to the Boston site.   Perhaps because the MRP system was providing such good information, or perhaps because Dupont expected more profits than we could produce, in 1995 Dupont management decided to have a reduction in force of a good percentage in all divisions.  Many of us who were with New England Nuclear from the early days were let go.  I was one of them.  Maybe they were trying to save the greatest costs or perhaps they thought our severance package would get us further along to finding a new job, but we were all surprised by the selection of experienced people who were laid off.

For those of us who were terminated, it was a stressful time.  Jobs were not easy to find.  One of our young colleagues was found dead in his apartment.  I never knew why he died.  It may have been due to some other cause or due to some other reason, but I tended to believe it was suicide.

Because of my longevity with Dupont I was one of the lucky ones.  I had enough time in to have earned a Dupont pension.  I was given eleven and a half months severance pay and eleven months later I finally found a lower paying job.  Not my best choice in jobs, but my only choice since I had come up empty on any other offers.  At the time I thought this was terrible, but I did not know that my lay-off in 1995 was going to save me from a fate worse than the lay-off I had just experienced.

Dupont management's undisclosed plan was to divest entirely of the medical diagnostics division.   Dupont's main reason for the move from Billerica to Boston was to move the medical diagnostic personnel into a common location with the other medical site that they also planned to sell off.  Some commonly refer to this as putting all the crap into one sock.  The year after I was laid off, in 1996 Dupont found a buyer in Bain Capital.

Mitt Romney and Bain Capital team

Bain had already purchased another medical diagnostic company called Dade International in 1994 using mostly borrowed money.  Right away Bain paid themselves nearly $100 million in fees for buying the company and managing it. This amount was over three times Bain's original investment.

In 1996 Bain included my former colleagues into the Dade organization.   During Bain's reign over Dade International, more than 1700 US workers were laid off.  Some of my colleagues were the first with a layoff in 1997.  At first Bain's approach to cost cutting included reducing salaries and not paying overtime to existing employees.  Then they revoked their pensions.  Finally they laid them off.

In 1998, Bain wanted to sell Dade and were given a generous offer by Kohlberg Kravis Roberts and Company, but Romney wasn't happy with the offer.  By the next year Bain used creative financing to find a way out.  Romney had Dade take out hundreds of millions of dollars in loans to buy out half of Bain's shares and half of those of its investment partners.  As a result, Bain extracted $242 million from Dade and Goldman Sachs got $121 million.  Top Dade executives got $55 million.  Total payout was $420 million.

In 2002 Dade's liabilities reached nearly $2 billion.  By leveraging the company so badly in order to pay themselves, Bain put the company into bankruptcy.  In the bankruptcy, Romney was accused of "unjust enrichment" and Bain had to relinquish its remaining ownership of Dade.  Romney and Bain kept the $342 million.  The other creditors didn't fair so well.

After bankruptcy, Dade's revenue and share price rapidly increased and it was bought by Siemens in 2007.

Here's hoping that many of my former colleagues survived Romney and Bain Capital.  My bet is that they will not  be voting for Romney for President, even if they're Republicans.