fortdh

Potash Cuts Back Production, Plenty of Profit Remains

POT is an extremely well managed company. They protect their profits with careful production balancing, along with sensible attention to costs. They are about the only company in this sector that can and is ready to expand, as soon as demand returns and grows. Farmers can only delay the purchase of fertilizer for a short time, and food demand (especially better quality) is rising. They are in a unique position; they can control supply and have pricing power. They are a real producer of product (not a dot com), and they are fully integrated from earth to customer dock.
I have watched them for years, and after a pull back this spring when I believe all commodities will take another hit, I look to POT to be a long term reliable elephant to ride.

Auto Industry: Can We Get a 'Twofer'?

The US auto industry output is going to contract to about 10mm cars in 2009, and probably not many more in '10. This pull down from 16mm is more than the loss of any one company. It will not destroy the auto industry
to loose any specific name brand; all the seats, windshields, tires etc that are needed to support the USA consumption will be made.
The holding hands by the Detroit 3 and the UAW sidekick, is really close to collusion. In their hearts, you know each CEO is hoping the other guy goes out of business. The surviving companies will pick up the slack, and may even see a profit someday.
Chrysler is essentially gone. The bailout should not include them, as they are privately held 80%, and Mercedes Benz holds the other 20%. We are therefore giving Mercedes a partial bailout.
If you do the labor math, take GM versus Toyota, you will find that with fully loaded labor and legacy cost, GM's cost is about $3000 per vehicle higher. Since it takes about 25 manhours to produce a car, $120 per manhour has to come out, if the legacy cost is held constant for the retirees. Witha fully loaded cost of $74, it will be difficult to accomplish!
The UAW has helped destroy the old guard USA industry. Due to absent worker rates, the Detroit 3 have to pad the rolls by 20%, in addition to the job bank which pays 95% for idled workers. That package eliminates any incentive to seek other work, or to even "work" at all. The Toyota/Gm contract in California prevented such wasteful practices, because Japan does not pay for zero contribution.
Bottom line, I hate to see the Gov trying to mandate how a public company is managed, and the impact of one of these companies going away will not be missed with the current sales projections.
Did you notice that they Volt, GM's answer to survival, will not be ready until 2010, and then will not be profitable until the second generation model is out in 2013? Volt is 10 years late, and will not save GM. Prius, hugely popular, is not selling well, and it could not save Toyota. There just is not enough demand.
Gas needs to be taxed to maintain a floor of about $3/ gallon, so that there is a more realistic reason for economy cars. A USA price of 1.50/gal, is foolish. The Mideast is playing us like a yo yo. As soon as a lot of exploring work and development is started, they can back off the oil price, thus "wasting a chunk of prep/startup costs" by making the efforts non-cost effective.
Bottom line, the market will decide how many cars we need to buy, and what brand we want. It is called captialism, and it works without Congress input.
Can anybody tell me why all three Detroit companies go under just because one goes under? The suppliers will still make the parts necessary to support vehicle sales, and it actually will be easier dealing with fewer auto companies.
Do you believe GM was merely going to close on 12/31, and only grasped that a month ago? If their management is no more astute than that, they should close.
I think what we are seeing is a scared union vote block scaring Congress. I don't think Congress cares which companies stay in business, as long as the union vote is protected. The loss of a Detroit company, will shift some production to the transplants, which scares Congress....but it has to happen. Most Americans would be happy to buy "American", but the product, the attitude, the dealer service, the designs, the quality, and the cost differential all favor the transplants.