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April 18, 2014 11:20 AM The Downside of Being an Executive Outsider Candidate

By Ed Kilgore

In these days of great ideological peril for Republican candidates who cannot demonstrate an impeccable record of “true conservatism,” a fast track out of ideological hell is the “executive outsider” pose: said candidate has been so very busy creating jobs in the private sector that he/she has no record of relevant votes or positions, and for that very reason (along with the great personal wealth that enables the candidate to regale voters with his/her inspiring “story”), he/she will be independent of the RINO Republican Establishment that has sold out to liberal elites and lived the lie of bipartisanship etc. etc.

But as Mitt Romney and eMeg Whitman and Carly Fiorina and others have discovered, the downside of the “executive outsider” posture is that it leaves such candidates vulnerable to whatever deprivations voters or those like them have suffered at the hands of their companies. That’s particularly true of “turnaround” wizards who have fattened their companies’ bottom lines via layoffs or outsourcing or other “efficiency measures” that leave regular folks in the dust, or in the dustbin of history.

Georgia Republican Senate candidate David Perdue may be the latest to learn this lesson, thanks to a piece by MSNBC’s Benjy Sarlin examining his record in the mid-1990s “turnaround” at Haggar, the Texas-based men’s clothing company.

When Perdue arrived at Haggar Clothing Co. in 1994, the historic menswear company was struggling. Revenues were down, old reliable products like suits were in decline, and competitors like Levi’s were muscling in on their department store sales.
As senior vice president, Perdue was in charge of international operations at Haggar and later domestic operations as well. Under his watch, the company did what so many clothing manufacturers did at the time: closed down factory lines in America and outsourced production overseas where labor was cheap and regulations were less restrictive.

That meant cutting hundreds of jobs at South Texas facilities in Weslaco, Edinburg, and Brownsville and producing clothes in countries like Mexico, where the average manufacturing employee earned about $1.50 an hour in wages and benefits.

In SEC filings, Haggar reported employing 4,300 workers in America in 1996. That number dropped to just 2,600 in 1997 while the company maintained 1,700 workers overseas in both years. By 1998, 1,667 laid off Haggar employees had been certified for NAFTA retraining programs for workers who lost their jobs to outsourcing or foreign imports - the most of any company in Texas, according to The Dallas Morning News.

Perdue, who has vaulted himself into the lead in most recent polling of the GA GOP Senate race with heavy Romney-style advertising of his executive-outsider background, is naturally a mite defensive about Sarlin’s revelations:

In an interview, Perdue said he and his colleagues approached the factory closings with a “social conscience,” but determined the move abroad was in the best interest of the company.
“We very definitely looked at trying to maintain as much volume as we could [in America],” Perdue told msnbc. “The problem was if you looked at the cost sheet of a product made in Mexico versus a product made in South Texas … the Mexican product had an advantage…..”
According to Perdue, anti-outsourcing attacks against politicians often ignore the challenge that companies face balancing the interests of customers, employees, shareholders, and investors.
“To politicians who have never been in a free enterprise system this sounds really easy,” Perdue said. “It is anything but easy. It’s very messy.”

Indeed it is, but that’s cold comfort to the kind of white working class voters who compose a pretty significant chunk of the Georgia GOP primary electorate these days. It doesn’t help that Perdue drew some recent negative publicity for a January speech (taped by an unknown source who passed it along to the Atlanta Journal-Constitution) in which he mocked rival Karen Handel’s high school education and also boasted of being the only candidate who understood the global economy because he had lived overseas.

The big question is whether any of Perdue’s rivals have the money and motivation to make a major deal of the downside of his corporate experience, as Newt Gingrich did (with Sheldon Adelson’s money) in the nasty but effective “King of Bain” video aimed at Mitt Romney, which some observers think set the table for Democratic attacks on Romney in the general election. A new Insider Advantage poll shows the under-financed Handel moving up into third place in the Senate contest, presumably because of her exploitation of Perdue’s remarks about her educational background (with some help from a “Mama Grizzly” endorsement from Sarah Palin). Phil Gingrey is sitting on a sizable campaign treasury, and might be tempted to go after Perdue as well. Jack Kingston continues to advertise heavily and demagogically. And even if Perdue hangs on to finish first or second in the May 20 primary, there will be an extended runoff campaign that doesn’t conclude until August 5.

I strongly suspect this contest is about to enter an especially nasty phase, which is probably good news for Democrat Michelle Nunn, who is quietly raising money and watching from the sidelines.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

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