Hartford, CT – Tom Foley went in front of the AFL-CIO, Connecticut’s largest labor organization, this morning to seek its endorsement. In his speech, Mr. Foley claimed he believed in protecting workers, said he would bring people together, and suggested he was a straight talker.
His actions support none of those words.
Tom Foley has continued to give vague, non-specific answers on a host of issues, from why he opposes Connecticut’s smart, strict gun law to how he would pay for hundreds of millions in tax cuts. Now, he expects voters to believe that after a career of making millions of dollars while slashing middle-class jobs, he suddenly cares about protecting everyday union workers.
As a leveraged buyout specialist, Foley made millions of dollars as Bibb went bankrupt and middle-class jobs were cut:
- Bibb’s payroll was slashed as the company restructured and Foley focused on the bottom line
- After loading Bibb with debt, defaulting on payments, and driving the company to bankruptcy, he relinquished executive control
- Foley’s NTC Group collected tens of millions in management fees even as Bibb sunk
“Each day it becomes harder to believe what Tom Foley says – he has zero credibility. We’ve already seen Mr. Foley ignore the truth, distort facts, and revise history. Today, his words were truly reduced to junk-bond status. After a career of profiting off the backs of everyday workers, he showed extraordinary audacity by claiming he will protect union jobs and middle-class employees. His words this morning do not match his decades of actions as a corporate raider,” said Democratic Party Chairwoman Nancy DiNardo. “The issue isn’t that he’s wealthy – it’s how he attained his wealth. His Gordon Gekko-like approach to the bottom line at Bibb resulted in his company making millions of dollars while laying off hundreds upon hundreds of hard-working, honest, middle-class workers. As he recklessly drove the company into financial bankruptcy, Mr. Foley showed he was morally bankrupt. Once again, his words today don’t match his actions – and he showed yet again why he is wrong for Connecticut.”
Foley Sold An Unprofitable Division Of Bibb In 1985, Cutting Payroll By About 1,000. According to Forbes, “Foley was on his way. First priorities: raise money and cut costs. Even before the buyout closed in October 1985, Foley struck a deal to sell Bibb’s unprofitable carpet yarn division for $ 11.5 million; that lopped the payroll by about 1,000. He scrapped management’s plan for a $35 million capital expansion program — more savings — and contracted with two mills to supply Bibb with woven goods. He brought in new managers who responded quickly to Foley’s incentive compensation plans. More than $ 7 million in bonuses have been given. As if from a textbook, Bibb worked as Foley said it would. Pre-Foley net earnings were $ 6 million. Last year: $ 11 million.” [Forbes, 9/5/88]
April 1995: Bibb Laid Off 27% Of Its New York Staff Because “They Are Desperate For Cash.” “The Bibb Co. has downsized its New York office by 27 percent, giving the boot to eight of 30 employees. The move was financially motivated, according to a former Bibb Co. executive. ‘They are desperate for cash,’ he says. ‘Tom Foley [chairman and chief executive] has to pay a $9 million balloon interest payment in April.’” [HFN, 4/3/95]
Under Foley Bibb Cut Costs By Reducing The Workforce From 6,000 To 5,500 And Salaries Were Reduced Or Cut. “Bibb has cut overhead by $10 million since last summer, Foley says. About $4 million to $5 million of the savings has been achieved through reducing the workforce from about 6,000 to 5,500 employees. The cuts affected all levels of employees, from hourly workers to high-level managers. Other savings came from sale of the company plane and reduction in travel and entertainment expenses. The company also saved about $1 million simply by replacing its old IBM computer system for a newer version. In addition, salaries have been reduced or cut, Foley says.” [HFN, 5/22/95]
Hartford Courant: Foley’s NTC Group Earned Millions In Management Fees “Even As Bibb Struggled.” According to the Hartford Courant, “Foley’s Greenwich-based holding company, the NTC Group, collected management fees from Bibb of $4 million each year from 1992 to 1994, then $3.4 million in 1995, even as Bibb struggled and began losing money in 1994, according to filings with the U.S. Securities and Exchange Commission. He estimates he personally collected about 20 percent of those fees. While Foley has enjoyed success in business overall, his Bibb venture contrasts starkly with the rosy-hued picture of his career painted in his campaign literature.” [Hartford Courant, 5/21/10]
Foley Said NTC Group Made About $20 Million Over 10 Years From Bibb In Management Fees. According to the Associated Press State & Local Wire, “In response to Malloy’s continued attacks focusing on the Bibb Co., Foley said his company, NTC Group, bought the Macon, Ga.-based textile company in 1985 when it was losing money and turned it around. He said the recession of 1990 and increasing competition from overseas hurt the company, which went through a restructuring in 1996 that ended with bondholders owning and controlling Bibb. Foley said he had no role in management or operations after 1996, and Bibb closed its largest fabric mill in Columbus, Ga., in 1998. He said Bibb’s new owner filed for bankruptcy protection in 2001. Foley said NTC Group did make about $20 million over 10 years from Bibb in routine management fees.” [Associated Press State & Local Wire, 10/11/10]
Foley Lost His 95 Percent Ownership Stake In Bibb In 1996. According to the Hartford Courant, “But one of Foley’s claimed success stories – his ownership of The Bibb Co., a textile manufacturer that he bought through a junk-bond-financed leveraged buyout in 1985 – ended with him relinquishing executive control and most of his 95 percent stake in Bibb 11 years later.” [Hartford Courant, 5/21/10]
Bibb Underwent A Prepackaged Bankruptcy Where Foley Lost Most Of His Ownership Stake In Exchange For His Debt. According to the Hartford Courant, “As the ad claims, Bibb did file for bankruptcy after the debt-heavy company ran into cash-flow trouble and missed a loan payment. But that happened 11 years after Foley took over, and while the ad makes no specific claim about the timetable, the quick pace of the script gives the inaccurate impression of a fairly compact time period. The copy also could easily be viewed as suggesting the bankruptcy heralded the demise of the business, and that after the filing, 2,000 workers promptly lost their livelihoods. But the bankruptcy was a “prepackaged” reorganization in which Foley’s creditors continued running the company after swapping the debt they were owed in exchange for nearly all of Foley’s equity in the business.” [Hartford Courant, 9/22/10]