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Robert Hennecke
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Crash development program to develop a unique bio-diesel reactor starting in December 2013. I intend to apply for a patent on the process and machine. No technical or financial assistance has been given nor ever to be asked for. Nothing intended to be imported from the PR China. Ultrasonic... More
My company:
Falconlake Ultrasonics
My blog:
Modernized Craft Guilds - worker owned cooperatives
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  • Macquerie Downgrade Of NTI - Northern Tier

    Letter written to head of Macquerie energy investments USA

    If it comes to light that Macquerie investments was actively purchasing NTI mlp units today after having downgraded NTI,
    Macquerie investments should then be dragged before a senate finance sub committee to investigate clearcut biased scapegoating
    and malevolent profiteering of their own making.

    It is absolutely contemptable as a practice. The fundamentals and financial position of Northern Tier rate it a definite buy as will be clearly obvious at Aug 6th reporting date.

    Robert Hennecke.

    Disclosure: The author is long ALDW, NTI.

    Jul 10 4:50 PM | Link | 1 Comment
  • Exelis Upcoming Spinoff Is A Value Proposition.

    Exelis, XLS, is in the process of spinning off a subunit that will be called Vectris. It is uner the radar as it is a relatively unknown generic sounding company that however does a great deal of profitable business with the Pentagon and the defence dep'ts of allies of the US as well as others. The subunit about to be spunoff is principally involved in the launching of hardware into space as well as other fixed location work done in Colorado mainly with the strategic missile force. It is likely that the spinoff will represent 20 % or so of the overall company and thus a one share for every five Exelis shares is likely to be given. Forbes gives a post spinoff value of 23 $ per share of XLS. Is this a sum of the parts calcluation or is it a 23 $ for XLS and whatever one gets after the Vectris spinoff a bonus?

    At any rate, the spinoff is likely to be bought out by another defence contractor if only to quickly acquire a closer relationship with the Pentagon. This is likely to represent a total sum of the parts share value of possibly 25 $ in total by autumn. Given the current share value, this represents good upside with relatively low risk given that it does pay a dividend.

    The company is held mainly by institutional investors, more than 80% and the company generally goes in one direction or the other depending upon sentiment. The recent decline can be attributed to the likely sentiment of frustration that the company did not provide guidance about the upcoming spinoff at it's last earnings report.

    This is about to be rectified in the near future as Exelis is expected to report on July 28th. They will have to give some kind of guidance in terms of how the company will be broken up as they stated in their prior earnings report that Vectris will be spunoff in the summer.

    The stock ha treaded water awaiting firm guidance as to how exactly the spinoff will come about and what assets will be transferred to the sub unit and what each of their respective business plans will be.

    Disclosure: The author is long XLS.

    Jun 13 6:40 PM | Link | 1 Comment
  • How Ford Motor Can Salvage Their European Operations And Gain A Global Marketing Bonanza

    If I were an exec at Ford which obviously I'm not, I would try to enable worker owned co-operatives be setup as an auto assembly guild whereby the workers themselves owned the facilities and voted on their methods to work. Sounds crazy ? The Mondragon worker owned co-operative makes engine blocks for Mercedes Benz and another of Mondragon's co-operatives beat out Siemens for an automation upgrade for BMW's Dresden plant. Indeed, one of Mondragon's units produces buses. The Mondragon worker owned co-operative started with 4 members in 1956 by a cleric who had been directed to improve the fate of his people in the Basque region of Spain rather than rising as a member of the Vatican. He reluctantly took on this task but rose to the challenge and ultimately came up with a viable plan that was neither corporatist nor communist and tapped into the inherent desire of people to do good work. They currently have 120 000 members making on average 60 000 euros/yr and having average equity of 50 000 euros. They have their own heatlh network and have their own technical university that is run as a co-operative with no fees. A worker owned assembly operation would be about the infrastructure costs being spread out and when there are big gains the workers themselves could gain those. It would mean that this guild/co-operative could bid on assembly projects for any and all auto companies thus enabling companies to have a presence in the market without having to maintain a massive presence so that when demand goes into freefall, they would not have high fixed costs in a place like Europe whereby rigid labour rules prevent agile manouevering by entities such as Ford. Some day, ideas such as this which in the past would be thought of as very much on the fringe will be considered as the only way forward for the sake of survival. The same plant, with clever engineering, can be used to produce vehicles from totally different brands and thus keep the same plant going 24/7--365 days a year and maintaining the same workforce assembling vehicles of whoever needs to have vehicles made. If such a worker owned Auto Assembly Guild were provided with say a five year non profit status by their respective governments and instead of practically giving away a building of a mothballed plant as is typical, then when there is a shutdown would instead be given to such an Auto Assembly Guild, then there would be a global goodwill towards whatever company that was so forward thinking for society as well as themselves that they would reap great rewards overall as well as provide a greater measure of control over the futures of these communities and their workers to those former employees. They would not be getting permanently let go but be getting setup to be a guild which could then bid on assembly projects to whatever company has a need which shifts from time to time. Ford has lost 1,75 billion in 2011 in Europe, 2 billion in 2012 and will lose likely 2,5 billion in Europe for 2013 with a possible profitability returning by 2015 if all goes well. Part of the costs are the costs of severance packages of 150 000 euros each. The buildings will likely be sold at a steep discount if not given away for 1 $ as is typical. I state that this is bass ackwards as I would give the workers 1/3 of their severance package, provide a guild with the building and facility for free provided that they give reasonable assembly quotes and facilitate their setting up auto assembly guilds that would bid on auto assembly of whoever needed it. That would mean Genk (Belgium) and Dagenham (NASDAQ:UK) NOT being shut down but being turned over to what I refer to as and AUTO assembly Guild / Worker owned Co-operative. The costs benefits to Ford would be substantial as they would vastly reduce their fixed costs and only have to deal with the variable costs that would come about when they have assmebly to be done. The would retain ownership of the tooling but the Guild would retain ownership of the infrastructure and on site machinery. This would also drastically cut the costs of the downsizing and restructuring as well as vastly improve PR on the continent if not globally by dealing with the former workers as partners in effect rather than the typical top down corporate dictatorial setup. The downsizing is not going well as some Ford Executives have been held against their will and there have been all manner of disruptions. I make this suggestion as it approaches the situation from a completely different perspective. The Ford corporate approach is to simply stop the bleeding, the viewpoint of the workers is maintain more than jsut income but a way of life. This is the difficult to grasp aspect of work that eludes many white collar types as they see workers often as extensions of machinery that need to be used to get products mfd. The perspective of the man on the floor up to and including the engineer is one of overcoming a challenge and achieving and objective namely a quality job that is done right and quickly to everyone's satisfaction. The shutting of a factory such as an auto plant is very dislocating on a social level as well as economic in that the large number of workers creates a social network whereby an important aspect of the workers identities are tied up. This is why on a philsophical, spiritual and economic levels this could resonate very well with these people and it can even be economical if correctly packaaged and pitched. The potential for a truly massive win win situation is at hand but it requires thinking on an entirely different plane. The facilities can then be used to assemble Toyota vehicles and or Hyundai's etc.... The same facilities can be used by the Guild to assemble windmills when there is a long multi month downtime. The towns themselves could organize these operations. The reality is that it is too difficult and costly for even car companies to maintain anindependent presence in Europe due to the rigid labour regulations and high fixed costs.

    In summation, I believe that a radical approach to the situation from both sides can enable an entirely new structure that would be far more efficient and yet maintain the possibility of mfg in Europe rather than the inevitable dislocation to the PR China etc.... My economic philosophy.

    (click to enlarge)

    Disclosure: I am long FORD.

    Additional disclosure: I have been a shareholder of Ford Motor off and on for roughly 4 years. Ford has been losing money in Europe for roughly a decade and it is unlikely to improve. I believe this radical solution could work and even the competition of Ford would likely see the benefit of outsourcing their assembly to a Modernized Guild.

    Mar 15 1:29 AM | Link | 3 Comments
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