Dow Chemical Defines The Word Trough
"We believe we've become a earnings growth company for the first time in our history. We are breaking the economic cycle associated with our industry. We are very committed to not turning down with the cycle and our strategy speaks to that. We're going to take the word trough out of the lexicon of the company." -- Andrew Liveris, CEO Dow Chemical, January 29, 2008
Dow Chemical starts to shutter plant capacity -- June 24, 2008
Dow Chemical pays $15 billion for Rohm & Haas at a 74% premium. Very possibly near the peak for deep cyclicals. A potentially major gaffe. -- July 10, 2008
Dow Chemical (DOW) will eliminate 5,000 full-time jobs, or 11% of its global workforce, close 20 facilities and divest several non strategic businesses due to poor market conditions. Dow Chemical will temporary idle 180 plants and reduce its contractor workforce by 6,000. -- Dow Chemical's announcement Monday.
From a prior post highlighting CEO hubris at the peak global economic growth for possibly decades or longer......Impressive commentary back in January by Mr. Liveris. But extremely improbable statements. .......... Liveris was extremely confident in this interview. In the past year or so Liveris has become a regular on financial television. In fact, he's probably become the most publicly available CEO on the financial media circuit. That to me is an anecdotal sign of trouble. ............. Liveris has been so bold to say Dow is investing $60 billion over the coming years and none of it is in the U.S. Some of the markets Dow is investing in are historically the most economically and socially unstable on earth. We shall see how much of that $60 billion gets deployed, how much gets written off as bad investments and how much has a subpar return on investment.
So, how many billions in shareholder value has Dow's CEO effectively destroyed with his hubris? Additionally, Dow paid an insane price for Rohm & Haas at the peak of the largest bubble in history. Given the implosion of Dow's stock price, we can surely assume Rohm & Haas would have seen a similar drop based on shared fundamentals. Dow could have more than likely bought Rohn & Haas for 50-80% less today thus saving shareholders as much as $12 billion on this mistake alone. Hindsight might be 20-20 but we wrote that the Rohm & Haas deal was a gaffe a month after it happened as we wrote about the other ridiculous gaffes involving deep cyclical mergers this cycle. And, they were indeed absolutely incredible gaffes. These CEOs cannot claim hindsight. They should understand the cyclicality of their businesses. It's incompetent leadership.
Dow Chemical starts to shutter plant capacity -- June 24, 2008
Dow Chemical pays $15 billion for Rohm & Haas at a 74% premium. Very possibly near the peak for deep cyclicals. A potentially major gaffe. -- July 10, 2008
Dow Chemical (DOW) will eliminate 5,000 full-time jobs, or 11% of its global workforce, close 20 facilities and divest several non strategic businesses due to poor market conditions. Dow Chemical will temporary idle 180 plants and reduce its contractor workforce by 6,000. -- Dow Chemical's announcement Monday.
From a prior post highlighting CEO hubris at the peak global economic growth for possibly decades or longer......Impressive commentary back in January by Mr. Liveris. But extremely improbable statements. .......... Liveris was extremely confident in this interview. In the past year or so Liveris has become a regular on financial television. In fact, he's probably become the most publicly available CEO on the financial media circuit. That to me is an anecdotal sign of trouble. ............. Liveris has been so bold to say Dow is investing $60 billion over the coming years and none of it is in the U.S. Some of the markets Dow is investing in are historically the most economically and socially unstable on earth. We shall see how much of that $60 billion gets deployed, how much gets written off as bad investments and how much has a subpar return on investment.
So, how many billions in shareholder value has Dow's CEO effectively destroyed with his hubris? Additionally, Dow paid an insane price for Rohm & Haas at the peak of the largest bubble in history. Given the implosion of Dow's stock price, we can surely assume Rohm & Haas would have seen a similar drop based on shared fundamentals. Dow could have more than likely bought Rohn & Haas for 50-80% less today thus saving shareholders as much as $12 billion on this mistake alone. Hindsight might be 20-20 but we wrote that the Rohm & Haas deal was a gaffe a month after it happened as we wrote about the other ridiculous gaffes involving deep cyclical mergers this cycle. And, they were indeed absolutely incredible gaffes. These CEOs cannot claim hindsight. They should understand the cyclicality of their businesses. It's incompetent leadership.
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