Care to give me the details of who in AKS management said this and when?
It's very difficult for me to believe that Wardrop would give the automakers declining price contracts and expose the Company to the risks of higher raw material prices. Maybe selling levels are tied into volume. Buy 10% more steel and selling prices drop 1%.
AKS is very through and sophisticated and I can't see their management doing something really stupid like giving the automakers fixed priced contracts for an extended period of time. Sounds like something LTV would agree to. I think it's a lot more complicated than you make it out to be. How could MSDW miss something of this magnitude?
Also, what's your basis for $1.43? Prices dropped 1% while costs go up 3% and that's basically it?
you have no clue what is going on in steel pricing. Everyone is selling more steel with less profit. It's called competition. The lowest margin customers in the business are the automotive group, they don't want to hear about price increases, they are still demanding price reductions. Your statement about AKS being "stupid" about giving automakers extended contracts shows just how naive you are about this business. If you don't have anything but opinions to post, why bother?
Company is losing money except AKS who continues to widen their competitive advantage gap as evidenced by their $65 per ton of operating profit reported in the fourth quarter. US steel lost $3 per ton.
The automakers are not going to be able to dictate to the steel Companies pricing over the foreseeable future. The fact is that imports of foreign steel by the automakers are not a viable alternative. The steel needed by GM tomorrow is being shipped from AKS plant today. It's called just in time inventory. Detroit needs AKS just as badly as AKS needs Detroit. If AKS and X banded together on pricing, Detroit would have to yield to reasonable pricing proposals.
AKS easily could "buy" additional business from Detroit and make the operating losses of their "brothers" that much worse, so I don't believe any of the steel makers would "break ranks" because of the consequences.
So I believe that your opinions, are based simply on a lack of fact.