Re: Re: IH Failure - tractor building business in

Posted by Steve - IN on November 02, 2003 at 11:36:55 from (12.222.30.13):

In Reply to: Re: IH Failure - tractor building business in gene posted by Guy Fay on November 01, 2003 at 19:05:59:

Guy,
The major thrust had more to do with famly (meaning blood) ownership and debt to equity ratios than the points you mention, but to address them ad seriatim:

1. They were involved on the board. A board gives advice. They didn't own 51%, so they didn't control.

2. Go stay a while on Mich Ave -- anywhere from the Conrad Hilton to the Drake / Playboy buildings on Walton. You might as well be living in London. There's a far different mindset there than Moline, Illinois.

3. The family control (blood family, not touchy/feely psycho babble stuff) - 51% ownership - had slipped away far before the 70's. Ownership resided on Wall Street. Compare that to Ford A shares which neither you nor I can ever own because our last name isn't Ford, or the proxy votes the family trusts can muster at DE.

4. Please re-read my post. Time order of things was a strategy to diversify -- then -- hire some guns to execute the strategy. The comparison was to Deere, which trailed by 40 or 50 years in diversifying out of the pure ag business.

5. Would you buy CNH to own part of the money hemorraging construcion business? Or, would you buy it to own the part that is making money? That's the ag part, and if you buy to make money; that's the part you're playing. FIAT does own majority control -- but that's not who makes the Allis tractor you can buy now. That's AG, or Agco, a totally different ag play - ticker AG versus CNH.

Read the 10Q filings from CNH. They have negative net assets even before you discount the >$2 billion booked as a phantom asset called "Goodwill". There's going to be a 2 billion dollar write down coming someday. The ownership is in Dutch, German, Italian banks who won't think twice about firing the lastest gun who can promise a pop in quarterly earnings and says he can turn the book value of the operation from red to black. Contrast that to the style you might see if your name was Ford or Deere-Wiman and ownership of the operation was a sacred trust passed down through the family -- meaning your blood offspring, not employees, or hired guns.

Follow Ups:

• Re: Re: Re: IH Failure - tractor building business Paul in Mich 06:24:45 11/03/03 (0)

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