The Pen is mightier than the sword, but the Pen must sometimes move the sword against corruption if the corrupt are not moved by the pen.. An idea without an implementer is useless. "The Rulers do not carry the sword in vain"Rom 13:4

Saturday, November 30, 2013

To Sell GrainCorp or not to sell? Gove Alumina smelter to close.

1. Grain Corp.
A vexing question indeed.  As Chris Bowen, Labor member said.. "The non sale is in the National(s) interest, but not the National interest"  (meaning in the Australian context that the "National" party is all the farmers and land holders/grain growers etc)

I've heard arguments to support this move being against the national interest, the primary one being that the proposed buyer is a huge mega company from the USA which is a direct and robust competitor in the grain market. Now..spin it however you like.. talk restrictions and limiations till the cows come home or the wheat browns,   it is still rather absurd to think that your direct competitor will have anything other than their own long term self interest at heart. 

In the field of geopolitical/economic competition, it's a bit like the game of monopoly, you get as much property as you can, hotels, houses etc, and there comes a point where your economic clout enables you to make rule changes that favor your own interests. Of course you don't blatantly slash and burn at the first available opportunity, no one likes either armed missionaries or armed company bullies, which is how it would seem to the public if such a direction was taken swiftly.

In spite of the profuse protests of the professors like Peter Van Onselen with his political science Phd, and his baby face....or the Labor functionaries who just want to make the government look bad,  I tend to (shock horror) agree with the Greens that the sale would be a bad thing...WHAT? *heresy*.. I will NEVER agree with the Green monsters.  The truth is... they agree with me!  But no matter how much sense a Green decision might seem, I know deep down it's just Granny attire that disguises the hunger to devour Red Riding Hood in due course.

2. BHP Billions..I mean 'Billiton'  is to close it's Gove refinery at a cost of 1500 jobs. Awwwwww *pout*..... now we are hearing the hue and cry and whine and moan about them having a social responsibility yada yada. Of course it's sad that 1500 people will be out of a job, and possibly a crust for a while. I guess they've got  mortgages, children, bills...who will pay them?  How I wish it was just as easy as all the rest of us giving them a handout until things come back economically.. other jobs etc... but the reality of life, (this might come as a surprise) is that if a business can't make any money, those who GAVE it the money to work with (Investors) might not be too thrilled with the stewardship of that money. Many of them, the investors, will be mom and pop investors who rely on a good return for their own survival and retirement.  Hence the reason for my rather disrespectful *pout* at the beginning of this paragraph!

Why is one bunch of mom and pop's more important than another? Specially when one group have perhaps put their life savings into shares in order to reap a benefit from a well run company so they don't starve or have the electricity predator cut off their supply?  Well I think those people who 'created' the company by financing it have much more right to determine the direction of that company  (after all, they own it) than those who, knowing how companies work, have offered their labor to make it happen on the ground.

True, a company cannot function without labor. But labor is not the force which created the company, it was capital, and that capital came from many sources like the tributaries of a large river. They might be small individually but when put together with some bright and knowledgeable people to manage it.... it can become like a huge navigable river of great economic benefit.

Rivers are prone to silting. The silt which kills a company are ever increasing labor costs, fluctuating currency, and competition.  When the river is choked with silt you have to bring in the dredge and scoop it out.  If the BHP enterprise at Gove is not making a reasonable return for the mom and pop investors, or the large institutional ones, then ....something has to give, and give it did.... give up operating for the time being, meaning 1500 people are now looking for other sources of employment.
I wish them well.

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