Sunday, June 27, 2010

Obama's Coal-Mining Shovel Nuclear Bomb

While Bucyrus (apparently) will take the first ....unnnhhh....hit........ from Obama's Green Weenie, the effects are hardly limited to Bucyrus.

The signal is clear: if you make machinery or equipment which does not comport with Obama's dream-world energy scenario, you are in the crosshairs. Any responsible businessman now has to think long and hard about the terms and conditions surrounding that business.

Or supplying that business. And if you're in the Upper Midwest, or SE Wisconsin, where most of that equipment is manufactured, that's an 8,000 pound gorilla.

Bucyrus mining equipment uses a lot of non-Bucyrus-manufactured goods including tires, engines, castings, cables, control-systems, electric motors, hydraulics, track, stampings and fabrications, and thousands of other, smaller parts. So companies such as Goodrich and Deere will be affected, as will at least a dozen Wisconsin manufacturers that I can think of offhand.

Same can be said for P&H/Joy Global (aka Harnischfeger)--another significant Milwaukee employer which buys similar components from a similar group of suppliers--many of which are in SE Wisconsin.

Same can be said for Waukesha Engine, whose products push natural gas from the wellhead to (say) Wisconsin.

Countless electric utilities across the US use coal as their 'base-load' fuel, meaning that coal is the primary source of power generation. It's the most efficacious energy source in the world, bar none. (Nukes may be more so, but they are NOT going to be built soon in the US with the Green Weenie thinking that's au courant.) You can bet that all of the utility CEO's paid attention to that Ex-Im decision. If they are thinking about upgrading a coal-burner, they know that it will be a harder fight--and maybe one that cannot be won. MG&E, WE Energies, the Green Bay utility formerly known as WPS, and Alliant/WP&L are in that group, along with American Electric Power of Ohio. And businesses such as Babcock/Wilcox boilers, or steam-turbine manufacturers like GE, are also getting a dismal wake-up call.

But it's hardly concentrated in SE Wisconsin or the Upper Midwest. Mining equipment is manufactured all over the US by large and small companies. Caterpillar, Thyssen-Krupp, Komatsu, Elgin, Miller Industries--all will now be thinking, hard, about investing in technological advances, or spending money on new employees, equipment, or machinery. That nervousness will be amplified by orders of magnitude when it reaches the desks of their suppliers, which are smaller businesses.

The bankers will also be thinking hard about term-loans or revolvers: what happens if Obama's Green Weenie puts Joe Doakes & Co. out of business? Do I want to lend money to someone in the target-zone of the Federal Government?

At least, they will be thinking hard about doing that in the US.

Brazil or India would be perfectly happy to have a new Bucyrus plant employing 1,000 people, and those Governments would be happy to guarantee a few export loans in order to secure that plant and its jobs. China is already in the game, as is Russia. Yes, Bucyrus (and P&H, and Cat) have arguably better products--but so what? If you cannot BUY the product, quality is not a consideration. And if Bucyrus builds the plant overseas, you get the Bucyrus (or P&H, or Cat) quality AND the plant and jobs. Helluva deal.

Using the old-line multiplier, when Bucyrus loses $600 million in sales, the total effect on the economy will be about 3x that number, or $1.8Bn. Doesn't take too many of those to wreck a State's economy, does it, Senator Feingold? Governor Doyle?

There is one good thing about this. Barrett, Doyle, and Feingold are all inextricably tied to the bomber Obama and his Green Weenie. So are Kagen, Moore, and Kind.

You know what to do.


J. Strupp said...

You're jumping the gun. The administration could find a way to overturn this decision. If not, then I would say that you're correct.

Again, we'll see.

Dan said...

Isn't Obama coming to Racine this week? Watch him come in on his white horse and over turn the ruling and then everyone will fall down at the alter of Obama.

Dad29 said...

Struppster, as dan mentioned, it's entirely possible that The LightWorker will announce a review of the ExIm decision while he's in Racine.

But that is irrelevant. The ExIm statement was clear as crystal: if you're in a business that Obama considers 'dirty' (excluding the practice of slip-and-fall law or banking), you're a target.

And he may or may not choose to 'review' decisions in the future.

The uncertainty ALONE is cause for major pause.