Wednesday, January 28, 2009

Dow should fire Andrew Liveris

Some readers may ask why we spend time looking at and opining about Dow Chemical Co.

Since much of our audience lies in far off lands and never has set foot in the heart of the Petrochemical Underarm of Texas, this is an understandable question.

See, Dow Chemical Co. is why there is a Brazosport.

Dow built the burgh of Lake Jackson so it could have a place for its workers to live, and in due time, the subsequent confederacy of municipaligies that sprung up around the area that today comprise "Brazosport" owe their existence, not to mention their paychecks, to Dow and the affiliated petrochemical-related enterprises that support and feed off it.

So there's the answer to the question.

(What would this place be like if Dow had never set roots here? That's an interesting topic for conjecture, but not one we'll tackle now; still, if we had our druthers, we like to fantasize it as an idyllic sanctuary for wildlife where men and women could bird watch, fish, hunt, surf, boogy board, swim and, yes, even play some golf, or at at least a spirited game of croquet... oh well.)

Today, looking at Dow, it's clear the multinational behemoth is in a ditch, and if the buck stops at the top, like Harry Truman once said, the blame for it lies in the lap of Andrew Liveris, the Australian-born head of the company.

He made a deal for Dow to take over Romn & Haas in a move that hinged on the success of Dow joining forces with Kuwait's national oil company for form a joint venture, but then the Kuwaitis got cold feed and backed out, leaving Dow in the lurch to come up with the money to complete the Rohm & Haas acquisition.

Now the lawyer have ahold of it.

All these manuevers were undertaken in the midst of a worldwide credit crunch and recession, when people who pull the money strings were retreating to their bunkers and the workers of the world were waiting and watching for pink slips to be delivered.

None of this inspires confidence in the man at the top of the Dow food chain (and we're not even bringing up the shabby treatment Dow has given the citizens of India over the Bhopal disaster.)

The next shoe to drop will be Dow cutting its almight stock dividend, which Liveris previously had pledged was sacrosanct, while Dow's stock price continues to move in the $13 to $14 price range (previous 52-week high was $43.43.

So Liveris (pictured above with wife) deserves to be laid off just like all the other Dow workers who are getting laid off.

Will this happen? We don't know. But we're Brazosport Proud to be the first to call for it.


Anonymous said...

Come on, Banjo.

The time to buy stuff, for those who can afford it, is when things are are at their lowest price. That is how the rich get richer.

As for what this place would have been like w/o Dow - you'd be writing from somewhere else. There would be no LJ. Clute and Freeport would stll be there, with populations roughly half what they are now.


Anonymous said...

Right on, Banjo! One thing that amazes me is why is the CEO the last one to go, be fired, pay cut, etc. in a declining venture. Instead they get raises, golden parachutes and are hired by another failing entity when they get eased out.
What happened to the "buck ends at the top" ? Shouldn't they be the first to go, all assets earned while failing be taken away except for social security and be required to start over like shining shoes at the airport?

Bob said...

The CEO pals up to the board chairman and, oftentime as a duo, they surround themselves with other pals to serve on the board. They jack up the per diem so you can make a fair annual salary just for showing up at the quarterly meetings.

Plus the board directors get goodies like stock options at prices that once upon a time meant a good deal but probably look like crap now.

So by this time the board is pretty happy-dappy with the ole' CEO and, since the members of the compensation committee like the booze parties and the per diem, they don't have any trouble paying him back with a seven-digit bonus if he wants one. It's not like it's their money.

Anonymous said...

Andrew liveris is a good person. It doesn't matter what people say they don't truly know him. Just like the president you have to take risks you just can't make everyone happy. He is always working and deserves every penny he makes!!!