ASARCO is now demanding changes to the "successorship" portion of the current union contracts now being negotiated.
If ASARCO is successful in eliminating the "successorship" clause in the current expired agreement it would mean that any future buyer of ASARCO would not be obligated to recognize existing unions or to continue the employment of existing union employees.
This info comes from the USW website which details the latest issues regarding progress of contract negotiations with ASARCO.
Needless to say ..... the unions are VERY UNHAPPY about this new company demand.
Forgive me for my fuzzy thinking .... I'm still a little sick.
I can fully appreciate why GRUPO/AMC may want to establish a value for ASARCO.
I'm not so clear on the impact of merging SCCO/ASARCO other the normal advantages of scale that would come from reduction of overhead, sharing of certain assets, facility reductions, etc.. Maybe the cost savings would justify this move despite the fact that some ownership would have to be relinquished.
But ..... considering ASARCO's present cost basis and perhaps the strong position of the USW it may make more sense spin off ASARCO IF a favorable evaluation can be established. But one never knows ..... the proposed AMC IPO may just go the other way and establish a low value for ASARCO.
Then one must ask the question: what's it worth not having the third largest copper producer in the U.S. compete against you?
Does anyone know the state of ASARCO,s facilities with regard to potential capital needs especially the refinery and the smelter?
So .... what you're saying is that GRUPO wants to establish a market value for AMC (SCCO/ASARCO/etc.) .... I get that.
And ..... to establish that value, GRUPO is willing to give up some ownership in exchange for cash from the IPO .... just not yet.
So ..... to establish a AMC market value AND obtain cash GRUPO is willing to give up some ownership, some future dividends and some future potential equity appreciation (or loss)?
They could always make-up for some of the lost dividends by declaring a higher future pay out (milk the cow).
Could all this monkey motion mean: #1. GRUPO has lost some confidence in the business and/or #2 that GRUPO has a NEED for cash and/or #3 that GRUPO thinks that AMC holdings are presently undervalued? If it's #1 that's not so good, if it's #2 and they've delayed the IPO, then we might be looking at a higher dividend pay out or if it's #3 and we ultimately get AMC shares for SCCO shares then ........ what's that mean to us other than we're also tied into ASARCO's higher costs ..... a spin off the ASARCO portion of AMC ..... you tell me..
What am I missing? Your thoughts will be appreciated.