Sunday, January 29, 2012

Rick Perry Vought to Know

Rick Perry ought to remember his $35 million Texas Enterprise Fund gift to The Carlyle Group's Vought Aircraft Aviation in 2004.  The Carlyle Group is a private equity underwriter (PEU) like "vulture capitalist" Bain & Company.

Governor Perry bragged how the Vought TEF award would bring 3,000 new jobs to Texas.  They never came, a fact the media has been unable to find.

Vought dangled Boeing 787 Dreamliner jobs for Texans, before taking $65 million from the state of South Carolina to locate production there.  Carlyle deemed Senator Lindsey Graham a better military benefactor.  The extra $30 million also helped.

South Carolina's Vought went on to gunk up Dreamliner production.  The nightmare ended when Boeing bought out Vought's 787 associated facilities, or so they thought.  SEC filings show:

On July 30, 2009, Vought Aircraft Industries sold the assets and operations of its 787 business conducted at North Charleston, South Carolina ("the Boeing sale agreement") to a wholly owned subsidiary of The Boeing Company ("Boeing"). Following the acquisition of Vought by the Company, Boeing has asserted various breaches to the Boeing sale agreement which include alleged losses from aircraft tooling, flawed inventory management and problems with spare parts. The Company and its counsel are continuing to obtain additional information related to the various issues asserted by Boeing.
This sheds light on Carlyle's expertise as an operator, given 787 production ramped up under Carlyle's ownership.

Vought's Texas job commitment rang hollow from the Palmetto flim-flam and failed promises to relocate production from Tennessee and Florida.

On February 26, 2004, we announced plans to consolidate portions of our manufacturing operations to Dallas and Grand Prairie, Texas. The plans include renovating and modernizing the Dallas and Grand Prairie facilities, closing the facilities in Nashville and Stuart and moving their operations to Dallas and Grand Prairie and reducing the size of the Hawthorne facility. The final planned completion dates of closing the Stuart and Nashville facilities are December 31, 2005 and December 31, 2006, respectively.
It never happened, like Vought's employment promises.  Vought Aircraft Industries employed 3,350 in Texas when it signed on to add 3,000 more jobs, for a total of 6,350 Texas positions.

Vought's company wide employment danced around its Texas commitment  The company decided not to fulfill its Texas promises in 2005.

Amounts previously disclosed for 2004 have been updated to reflect a reclassification of $35 million in grants received from the State of Texas from operating activities to financing activities.. 
That's a sweet non-debt, non-equity capital injection.  Who wouldn't want $35 million to invest for five years Scott free?

Rick Perry's Texas Enterprise Fund spreadsheet indicates Vought provided 3,000 jobs with a total impact of 29,377 jobs.  Vought provided 3,350 Texas jobs when Perry pushed suitcases of cash on Carlyle:  Not only did Carlyle not add 3,000 jobs, they cut 35.  Rick Perry gave "vulture capitalists" $1 million per job lost.

Look how Vought characterized the grant.  In 2005 the company stated:.

On February 26, 2004 we announced plans to consolidate portions of our manufacturing operations to Dallas and Grand Prairie, Texas. We received a $35 million grant from the Texas Enterprise Fund in April 2004 and are in the process of working with the Texas General Land Office and several other state and local agencies to help us accomplish the consolidation. By accepting this grant, the Company is obligated to add 3,000 jobs in Texas over the next 6 years with a prorated penalty (based on any shortfall in our ability to maintain a total of 6,000 jobs in Texas with the total penalty amount not to exceed the amount of the grant) assessed beginning in 2010 if that goal is not reached.

Contrast this with their 2010 description:

In March 2005 we were awarded a $35 million Texas Enterprise Fund grant to assist in increasing employment levels at our Texas facilities. This grant requires that we maintain certain employment levels at our Texas facilities. As a result of our failure to maintain the required employment levels, we repaid $0.9 million to the Texas Enterprise Fund in 2010. Our failure to satisfy these commitments in the future could result in the requirement to repay some or all of the remaining portion of $35 million grant over the next nine years.

When 2010 arrived and Vought failed miserably on its TEF promises, two things happened.  Rick Perry renegotiated the deal in secret, enabling Vought to refund the paltriest amount.

Carlyle then sold Vought to Triumph, who now has the TEF obligation.  Vulture capitalists chose not to refund Texas taxpayers from their ample profits.

Over the course of my tenure as governor of Texas, we've helped created a climate where 1 million jobs have been created.

Nearly 30,000 of those are a bald face lie.  Even a Presidential run couldn't bring these facts to light.  The media didn't have to conduct research.   PEU Report has numerous posts, complete with links to Perry's fictitious report and Vought's SEC filings.

Rick Perry caters to vulture capitalists, when he isn't calling them names. The media is unaware, ignorant or also catering to the privileged class of super billionaires and their politician benefactors..

Update 2-4-12:  Governor Perry wants to give companies a break from job incentive reporting requirements.  More opacity from a vulture capitalist lover.

Update 11-15-21:  Carlyle's 2009 Annual Report stated "in March 2010, Carlyle agreed to sell Vought to aircraft components maker Triumph Group in a transaction worth $1.44 billion.  The group that decided not to refund Texas taxpayers included "The three founders are joined by Daniel F. Akerson and Glenn A. Youngkin on the firm’s executive committee.  The operating committee is led by seven seasoned Carlyle professionals: Glenn A. Youngkin, Chair; Jeffrey W. Ferguson; David M.Marchick; Peter H. Nachtwey; Michael J. Petrick; Bruce E. Rosenblum; and Gregory L. Summe."  The name on both groups is Glenn Youngkin, newly elected Governor of Virginia representing the Red Team.  Youngkin helped short Texas taxpayers as Carlyle kept $35 million over six years.  Not only did it not come close to their employment promises, they cut 35 jobs during that period.  Glenn and Carlyle took $1 million from Texas taxpayers for each job they cut at Vought in the Lone Star state.