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How Mitt Romney and Bain Helped Grow Monsanto Into a Biotech Giant

If Romney is elected, this bête noire of environmentalists will have a very old friend in a very high place.

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Just as job reductions would later become a common, controversial result of Bain Capital investment, Monsanto went from a peak of 64,000 employees in 1979 to 20,000 today, a consequence in part of the $4 billion of businesses that Bain, Hanley and others decided to dump. While the press office at Monsanto refused to answer most of our questions, one current official said that Bain “worked in divestitures, acquisitions, streamlining, layoffs and cost reductions.”

Earle Harbison, who ran five divisions of Monsanto during the Bain years and eventually became its president, says: “Romney was part of the team that came in to study the whole company, and they worked day and night. They were down in the factories, the sales offices, accounting systems, the whole works.” Harbison says he and Romney “had at least a dozen meetings,” and that the Bainies were “armed with a bunch of flip charts.”

Arthur Fitzgerald, another former top executive, says: “Romney was involved in several individual projects. I remember Romney only because he was one of the leaders and stuck out as someone who was particularly curious.” Hanley’s successor Mahoney said Bain “did some good work” but that he dumped them because “the consultants were getting in my hair.” Asked about Romney, the press-shy Mahoney would only say: “One presidential person made calls on occasion as did many Bain executives.”

Graham, who claims credit for recruiting Romney to Bain, described him as “an important guy in delivering the work” at Monsanto, saying he “cut his teeth” at the company. Graham also laid out how he and the Bain team worked with Monsanto: “We worked on the seed business, the herbicide business, some of the basic chemical businesses. We’re kind of the right-hand man. We present to the board of directors. We’re friends and partners. We understood it down to its roots.” Bain’s brass, recalled Graham, would meet “Hanley and his five top people every time we went to St. Louis,” which he said was as often as “two to three times a week.”

Dan Quinn, another former partner recruited at Bain by Romney in 1983, called Monsanto a “prized” client that Bain “thought of as one of their biggest successes.” Romney, says Quinn, was “a key framer “ of the continuing conversation with Monsanto, especially “on the marketing side,” where he was “in charge of several of those teams,” just a notch below the Bain founders in the chain of command.

The most important contribution Bain made to Monsanto, Graham contends, was concluding that “the biggest opportunity” was to bring “an entirely new value product,” namely biotech and herbicides, “to the whole farming industry in America, soybeans and stuff.” Graham exalts in what Bain did—saying it “completely changed the economics of farming in America” and made Monsanto “the biggest agricultural business in the world.” He concedes that the GM seeds, herbicides and other products were “Hanley’s vision,” adding “we did the analysis to make him comfortable that it was right and how to do it.”

John Qualls, who worked closely with Bain in Monsanto’s office of economic forecasting, credits the consulting firm with looking “at the whole schmear,” but adds they were particularly focused on getting “the cash cow” product lines, mostly chemicals, to “funnel” their profits into “the wildcats, the comers,” like biotech. “The major thing that I think Bain contributed to was the division of Monsanto into two major units and spinning them off,” says Qualls, though he acknowledges that the actual spinoff didn’t occur until 1997, when Monsanto created a freestanding company called Solutia, run by ex–Monsanto brass and selling Monsanto’s remaining chemical commodities. “It was a natural evolution” of Bain’s strategy, he said, with “Bain picking the stars” early on, including biotech and Roundup, that wound up staying with Monsanto, while Solutia was left with “the superfund cleanup stuff and the environmental disasters.” (Solutia, which filed for bankruptcy in 2003, was recently acquired by Eastman Chemical.)

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