Business NEWS

How top heavy miss-managed mess LyondellBasell enters Chapter 11 bankruptcy protection?

By Amarendra Bhushan for CEOWORLD Magazine Updated:January 7, 2009

As things get tougher it will be a test to survive in this economy. Greed will bring down a lot of businesses. The Republicans always said “we should run government like a private business” well guess they were right since both are bankrupt. Way to go. Debt is a business enemy right now, cash is king. Unfortunately we might see a few others with balance sheets tumbling down this year. Wait until 4th Qtr ‘08 earnings come rolling in this month; it’s going to be ugly!

Chemical giant LyondellBasell Industries and the world’s third-largest independent chemical company said Tuesday it has lined up $8 billion in financing to keep operating says today its U.S. operations and a European holding company are filing for bankruptcy protection.

Netherlands-based LyondellBasell warned last week that bankruptcy was an option as consumer demand continued to slow. The company had disclosed in December that several lenders let it postpone $160 million in loan payments, and credit agencies cut its ratings to junk status.

In the filing, the company listed assets of $33.4 billion and liabilities of $29.9 billion, and included only its U.S. operations and one European holding company. None of its European facilities was included.

Volker Trautz, the company’s chief executive, cited “a dramatic softening in demand” along with “unprecedented volatility” in costs. He also said December was particularly difficult because customers pulled back sharply, although LyondellBasell expects sales to improve in 2009.

Lyondell has a bunch of good assets and has better operations than many chemical companies. They will survive this, although perhaps in a slightly different form. It comes as no surprise to me. I work there. It is the most top heavy mis-managed mess you can possibly imagine. Half the employees are on anti-anxiety meds. I am truly amazed there has not been an employee “go postal.” They are known as the worst plant to work for in the region. A friend of mine quoted in his email.

Just making a statement of fact, that it seems that the union worker is blamed more often than not when a company either fails or goes into reorganization. You can’t blame this one on unions. Their refinery alone made a billion dollars PROFIT in 2007 alone. But for every union worker who actually produces a product, they have a non-union employee whose only job is to follow around that productive worker, crack a whip and threaten him or her. Also, they stopped maintenance out there years ago, and it is catching up with them.

I smell another bailout coming….first the banks and stock brokerage houses, then the insurance companies, the auto companies, and now the petrochemical companies. Maybe Exxon needs some money next. Call the White House; may me you will get some money too…

What a good Idea. Borrow a lot of money, buy a good profitable company with huge bank loans, then ask for a Government Bailout.

The ship continues to sink and the captains are hogging the life boats.

LyondellBasell’s Highlights

• 1985: Lyondell Petrochemical is formed as a subsidiary of Atlantic Richfield Co.
• July 1993: Lyondell and Citgo Petroleum Corp. form Lyondell Citgo Refining to own and operate Houston refinery.
• August 1998: Name changes to Lyondell Chemical.
• July 2007: Basell agrees to buy Lyondell for $12.7 billion.
• December 2008: Company considers Chapter 11 bankruptcy filing.
• Tuesday: LyondellBasell’s U.S. operations file Chapter 11.

Like this article! ‹ Failure is always rewarded; Chrysler receives $4 billion CEOWorld.biz – Where CEOs & Entrepreneurs Network featured on Killerstartups! ›
Share this Post: Get It Delivered To Your Inbox