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AK Steel Holding Corporation Message Board

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  • jrpalladin jrpalladin Jan 29, 2000 7:29 PM Flag

    Another one take them down

    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?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • 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?

      • 1 Reply to americal7071
      • 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.

 
AKS
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