President-elect Donald Trump pledged during his campaign to scrap key global trade deals, reverse the flow of manufacturing jobs overseas and bring well-paying mining jobs back to coal country.
Those promises may prompt some awkward questions for Wilbur Ross, the billionaire Trump nominated to become commerce secretary, at his Senate confirmation hearing this Wednesday.
The 79-year-old private equity mogul earned the nicknames “bottom feeder” and “king of bankruptcy” in the mid-2000s, when he became known for buying up decaying businesses, including steels mills, coal mines and textile factories. At the time the U.S. economy was shedding more than 100,000 manufacturing jobs each year as companies moved factories to countries like China, where labor was cheap and safety and environmental rules were few. Ross reaped profits by stripping workers of health benefits, ignoring safety concerns and sending jobs abroad, where workers expect lower wages. In total, Ross offshored roughly 2,700 jobs at companies he invested in since 2004, according to Labor Department data Reuters published on Tuesday.
In 2004, Ross bought Cone Mills, a struggling North Carolina textile company, and combined it with another factory to form International Textile Group. He later renamed the company Cone Denim, and as Bloomberg reported in 2012, expanded production “in less-expensive emerging markets” and moved to “eliminate duplicative facilities.” The firm operated two mills in Mexico and one in China. In 2004, Cone Mills employed 1,100 people. By 2012, the company had just 300 workers in North Carolina, a 72 percent drop. In a scathing retelling of the incident, The Daily Beast dubbed Ross “Trump’s future secretary of outsourcing.”
The Trump transition team did not immediately respond to a Huffington Post request for comment. Reuters reported that Ross did not respond to several requests for comment.
The same year Ross bought Cone Mills, he formed International Coal Group. ICG became the corporate umbrella for mines Ross bought in 2005 from an ailing coal producer called Horizon after a bankruptcy judge stripped thousands of miners, some with black lung disease, of their medical coverage and shredded their union contract.
ICG was also the vehicle where Ross placed the assets of Anker Coal Group. Ross had been buying up Anker shares since 1999, and by 2001 he owned 47 percent of the company and was its largest shareholder at 47 percent. ICG fully acquired Anker’s coal assets in 2005.
Among the former Anker properties Ross controlled was Sago Mine, which the federal Mine Safety and Health Administration cited in 2005 for 208 violations. (In 2005, two employees joined ICG from Massey, a coal company that became infamous for its disregard for safety regulations under CEO Don Blankenship. In 2010, an explosion at Massey’s Upper Big Branch mine killed 29 workers, and Blankenship was found guilty of conspiring to violate mine safety and health standards and sentenced to a year in prison. Blankenship endorsed Trump for president from prison in 2016.) More than half of the citations at Sago were labeled “serious and substantial,” including 20 dangerous roof falls, 14 power wire insulation problems and three cases of inadequate ventilation plans. On Jan. 2, 2006, an early-morning blast ripped through the mine, trapping 13 miners underground for two days. Only one survived.
Ross, who did not leave his Manhattan office to visit the disaster site, said the deaths haunt him. He agreed to pay $2 million, to be divided among the families of the deceased.
“He certainly had the authority to try to make a difference and make sure those mines were operated differently. In my view, they were a bunch of dog-hole mines,” attorney Tony Oppegard, a former mine safety official who now represents miners in his private practice, told HuffPost in November. “Bottom line is to get as much coal out as cheaply as possible and get as much coal as possible. That’s what a dog hole is.”
Ross may also face sharp question over his willingness to do business with some of Russia’s wealthiest and least savory businessmen. Ross was the leader of a $1.1 billion buyout of a troubled Cyprus bank in 2014 that seemed initially to remove Russian owners from the bank’s list of equity owners. But Mother Jones’ David Corn and Ross Choma noted in December that shortly after the deal was complete, Ross made a deal with Viktor Vekselberg, the oligarch whose ownership of the bank had worried members of the European Union, to allow his company, the Renova Group, to become the second largest shareholder in the bank.
After Rex Tillerson was battered in his Senate confirmation hearings for Exxon Mobil’s financial ties to Russia, it would seem likely that senators of both parties would pursue a line of questioning about direct deal-making with one of Russia’s richest men.
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