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Cliffs Natural Resources Inc. Message Board

  • spitzkohl123 spitzkohl123 Jul 10, 2013 10:55 AM Flag

    CEO Departure is sad but good for Clf

    Carrabba made too many mistakes with the acquisition and ramp-up of Bloom Lake, first of all, he bought it too expensive and secondly, the slow expansion has cost too much and taken everyone by surprise including Carrabba himself. After putting in nearly $7 billion—$4.6 billion for the purchase and another $2 billion (it is undoubtedly going to be $2 billion) for phase II expansion, yet not knowing when it would generate income. This year Bloom Lake will again make a small loss like last year. However, this is only part of the story. The other part is that Carrabba ran into arbitration with MT some years ago, has soured the relationship with Clf’s most important client and offended one of most powerful Indian men. That was why MT signed a sales contract with Essar some months ago, even though Essar might not be able to produce iron ores in time for MT. Carrabba has to leave if Clf wants another term of sales contract with MT. I guess Carrabba would be well compensated for his departure. He indeed has done a lot for Clf, good and bad.

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