Employee Induced Neutering of the CEO, Albemarle

There is a phenomena that most people are not familiar with.  It is one that costs shareholders of companies many millions of dollars each year.  This is what I term, “employee induced neutering of the CEO.”  It takes many forms but the basic jest is as follows.  An employee or group of them take actions of some sort that ultimately have a negative outcome on the company’s bottom line without the knowledge or permission of the CEO.  In this regard their actions have not only reduced the revenue of the company but also potentially impact the long term future of the business as a whole. 

In this first of several blog posts on this subject I cover several instances of this behavior at Albemarle.  I decided to do this after Matt I. who works at a publishing company that I subscribe to had mentioned this company (he is free to reproduce this post).  For some reason Matt thought that they were miners when in point of fact they are not (this is simply a recent blunder from my general understanding).  I do not have full knowledge of the history of this company but I do know that they were a spin off of Ethyl Corp. sometime ago and that the latter was a collaborator with the Nazis during WWII (just as was Standard Oil, now Exxon) providing them with antiknock agents required as an additive to the aviation fuel (which Std. Oil provided), without which the Germans planes would have never been effective.

Many years ago a “mentor” of mine told me a story about his interaction with Albemarle.  This person worked with a company that was a distributor of some of Albemarle’s products.  They had served in this capacity for some years and had indeed increased the sale of these materials.  The issue was, according to this person, that Albemarle treated them like crap.  One thing he indicated was they simply were arrogant.  So this distributor had finally had enough of the poor treatment and lined up a new supplier of the same materials and made the decision that when the next meeting was to occur at one of Albemarle’s sites that they would announce their intention to no longer sell products made by Albemarle.  Just prior to the announcement Albemarle gave this salesperson some sort of little award for being so effective at selling these materials and the salesman then informed them that they were no longer going to distribute them anymore and left.  This is an example of employee induced neutering of the CEO as no leader of sound mind would poorly treat someone who was selling their products for them.

Fast forward about four years following this story and I contacted Albemarle as I had chemistry that made use of a product of theirs, methylaluminoxane (MAO).  Specifically the chemistry is one of the most energy efficient methods developed to date for producing polymers such as polyisobutylene and butyl rubber.  For example, I made 90 kg/mol butyl rubber at 0 °C with this chemistry and normally that requires a reaction T of around -100 °C.  I thought that since they were a main producer of MAO that they would have interest in owning the intellectual property that I had developed and so I sent the company a letter.  The reader should note that one form of employee induced neutering of the CEO is to withhold correspondence addressed to the company head.  Somehow this particular form of CEO neutering did not occur and I received a phone call out of the blue from an employee at Albemarle and this is where their CEO got his gonads snipped good. 

The first thing this person said to me, and I believe he was either Indian or from the Middle East originally, was “I don’t know why but I was chosen to call you.”  He then proceeded to ask me where I got my degree from and when I told him he was quite rude and acted as if I was inferior to him.  Then this joker proceeded to inform me that Albemarle planned to make butyl rubber using butyl lithium.  I wanted to laugh but I bit my tongue because this person obviously didn’t even know the difference between anionic or cationic polymerization (butyl lithium being used for the former, butyl rubber being made by the latter) nor did he seem to have any basic polymer science background.  At this stage I more or less let this idiot go on for a while not informing him that although there is a polymerization system for the preparation of isobutene based polymers that makes use of the alkyl lithium compound he referenced that it also required other ingredients and that it would be far more expensive and dangerous than current methodologies. 

At this stage I gave up trying to help Albemarle.  My experience is that it is a company filled with many bad actors that unwittingly (or maybe purposely) damage it through bad decision making and behavior.  This is most likely what triggered an entity with no mining experience to enter the lithium mining space and no doubt it has cost its shareholders quite a bit.  It’s too bad their CEO doesn’t realize he has been neutered…

Brief Commentary on The Casino Known as the Stock Market

This article was written over 6 months ago and languished on my desktop until now. 

The following is not to be construed as investment advice and is merely commentary by this author due to recent moves in the stock/bond markets and changes to interest rates as well as the price of gold.  All information provided herein is given on a best of effort basis only and the author does not guarantee that it is 100% correct; however, the bulk of the following is based upon fact and most of it can be verified at other sources.

A past acquaintance of mine adhered to the belief that the bulk majority of people’s retirement funds were based on the individual investing in the stock market.  I tried to point out the fallacy of his statement telling him that this was a recent phenomenon that occurred with advent of the 401k and IRA but it fell on deaf ears.  He didn’t seem to recognize that at one time prior to this period that many people in the US had actual retirement funds that were managed and funded by the company that they worked for, and that these funds paid the retiree a percentage of their top income once they retired.  The idea of a pension was a foreign concept to this person.

In particular I can remember the 1980s and one of several examples of pensions stands out.  It involved a kid named Jimmy whose father worked for the local steel plant, Armco.  I recall going over to Jimmy’s house a week or two prior to Christmas.  Although their house was a little smaller than the one I grew up in the living room was flooded with presents.  I’m talking about 100 presents of various sizes for two children.  This was approximately five times more than the number of presents per child that were normally at my house.  I was astounded and I asked Jimmy what his dad did, how did they get this many gifts?  Jimmy preceded to tell me that his dad worked for the steel plant and that his dad would receive a very good pension when he retired.  Indeed, his dad was raking in the bucks for nothing more than a manual labor job.

For those who don’t know, that wonderful company IBM, the one that helped that Nazis keep track of their prisoners in the death camps was the locus for change in the world of retirement.  IBM decided that pensions were simply too much of a drag on the company and it was around 1984 when they shifted towards the 401k plan for their employees with many other companies soon following suit.  For those who don’t recall this more or less coincided with the beginning of the end of really good jobs for Joe and Suzie lunchbox and the degradation in wages and job quality gained full steam once the Clinton-era began (as did the sucking sound of industry leaving, thanks Mr. Perot you were spot on as they say).

Likewise this person held the fallacy that the stock market was driven solely by fundamentals and that it always led to positive gains.  I don’t have space to tackle the former point (just look at all the various bailouts as a start) but for those who don’t recognize it only 22 of the past 40 years has the stock market really meet the latter criterion during recent times.  During the period of about 1984 to 2007 there was approximately a 90% price appreciation for the standard equity and bond portfolio of (60:40).  Home values also increased dramatically as well (ca. 70%) during this time frame.  It was a period where people could more or less invest blindly in market basket funds (e.g., mutual funds) and be guaranteed a return that exceeded inflation, and in many cases by then some.  What helped fuel much of this was the artificially low interest rates that were imposed. As the reader can see I haven’t documented this work.  You can do your own due diligence and see if the information that I provide here is indeed correct or not and should it be the latter then you can submit to me corrections as need be.  I want to conclude that the person whom I refer to as a former acquaintance decided to buy gold at around $1,600/oz a few years ago in part due to my constant harping about the price being way below the true value.  If this person held his position he would have definitely benefited from my commentary.  On the other hand, if he abandoned his position all I can say is tough luck, you have officially missed the gold train.

The Self-Directed Demise of US and European Big Oil and Chemical

This article was written approximately six months ago and I have been too busy to post anything on my blog.  Many new developments are in progress that have yet to be announced.  Announcements will be made not long from now as I get caught up on my to do list.

Some years back I found myself driving a know-it-all professor and his student to another college.  I decided that the most intelligent conversation could be had with the student and so I began to ask him a series of questions to see how awake he was.  One thing I said at the time was that gold is cheap right now and it is most likely going to go to well over $2,000/oz?1  He said that he knew this and that it would be a good idea to own gold.  I then proceeded to ask if he knew that his home country was going to be used as a proxy by the US in a war against China?  He acknowledged this.  Then I told him that the US would be at war with both Russia and China in the not too distant future.  Again, he said that it was most likely to occur.  At that point the overly schooled imbecile riding in the back chimed in, “Oh, that will never happen.”2

At one time I had interest in working in conjunction with companies like BASF and Exxon-Mobil,3 primarily because they are producers of polymers made by the method of polymerization that I specialize in (i.e., cationic polymerization).  For the latter company I made numerous attempts over fifteen years to interest them in green polymerization methods.  My thoughts were that the individuals who I was familiarized with (primarily from literature) had integrity and high moral fiber.  Unfortunately, I was incorrect and my conclusion is that they are mere wage slaves with no allegiance to anything except a paycheck.  So please disregard any previous mention of such people by this author that portrays them in a positive light and realize that even I am prone to misjudgments of character.

Within the past year I approached Exxon-Mobil and informed one of the chief scientists that I had made some very significant breakthroughs, not only in the area of cationic polymerization but also in the synthesis of a potentially very valuable, new set of activators for single site catalysts used in coordination polymerization.  I informed this person that not only did the chemistry in both cases dramatically reduce the pollution that Exxon-Mobil generates using their existing systems (e.g., CO2, toxic metal waste streams) but that my chemistry would give them a monopoly on a new series of acids and in all instances was cheaper to utilize.  The response was (paraphrased), “we are busy working on chemistry geared to decarbonization and don’t have time to take a look at your results.”  I was flabbergasted to say the least, these clowns who have never spent a single day working in the green polymer field were now all of sudden going to do green chemistry?  Immediately I told myself that the most likely outcome (ca. 99%) for them is failure.4

Recently, Nomi Prins put out a video where she claimed that many of the big oil companies in the US were now focusing on lithium based ventures.  I have to be very careful in my commentary here due to the value of the knowledge I have so reader please bear with me.  The ignorance and downright stupidity that I have seen displayed by chemists at BASF, Exxon-Mobil, and Chevron (to mention a few) is beyond belief.  These people cost their employers millions of dollars every single year but the good thing is that the CEOs that run these companies are too dumb to realize this fact.5  They say a fish rots from the head down and if you happen to be stock holder in any of the aforementioned companies I can guarantee you that their heads are incompetent, maybe even criminally so if laws stipulate that they maximize shareholder returns.  Likewise, Prins’ comment that “congress” was helping push this along surely didn’t bode well for the success of such an undertaking given their long history of incompetence and failures.

It would seem that the US and Europe are filled with clones of the know-it-all professor who I discuss in the opening of this commentary while developing and/or resource-rich countries are like the student.  It is hard for me to believe that companies that have zero experience mining are going to somehow produce lithium competitively compared to established producers.  I also do not think that they will make many if any significant leaps in cleaning up their existing chemistry without the technology being outsourced.6 

What I do suspect is that these efforts will fall flat on their face for the most part just like the policies of those who run the countries that house the bulk of their factories.  Meanwhile, do not be surprised if industry in BRICS+ member countries grows to fill the void created by dying western big oil and chemical companies.  What most people in the west do not appreciate is that you simply cannot turn on a dime when it comes to making changes of the type being discussed here.  Just to open a mine alone generally takes no less than twenty years and for a country that has at best a “C” infrastructure it is doubtful that needed upgrades to electrify everything will occur before its debt load exceeds 50 trillion USD and a total collapse occurs.

Before I conclude I don’t want the reader to misunderstand this author.  The bulk majority of his scientific career has focused on green chemistry and he has literally risked his life to make advances in this area.  Additionally, this author has invested a great deal of his meager savings towards such research.  As such, he may be the only polymer scientist to use his own money towards the endeavor of making changes to chemistry that are beneficial to the planet as a whole.  At this juncture I prefer the approach attributed to G.K. Chesterson, “Don’t be so open-minded that your brains fall out.”7  In conclusion, the most probable outcome is countries that continue to rely on oil into the near future and also make transitions to alternative energy sources at the proper stage in their development will dominate the world stage while those who rushed to make such changes without proper thinking/planning will flounder in a state of perpetual decay.

Footnotes:

  1. At the time gold was around $1,000/oz.
  2. The window to buy gold is closing in this author’s opinion and war has already started.
  3. This was before I learned of their long entrenched history with the Nazis which made me realize that the bulk of negative PR they have obtained over the years is well-deserved.  I have much more to say about these topics in the future.  Sage advice on dealing with such situations can be found in the book entitled “Special Treatment” by Alan Abrams where the father of Werner Goldberg tells him “If somebody doesn’t want you, don’t run after them.”
  4. Note, Dr. R.P. Quirk told me many years ago (this author’s paraphrasing), “To never say never as things you thought were impossible chemistry-wise could eventually be done in some instances.”  I would say the possibility of failure for them will be 99.9%.
  5. This doesn’t just apply to the scientists that work at these companies but includes those who work in other non-scientific positions.
  6. About ten years ago Exxon-Mobil put out one of their usual BS propaganda adverts telling the general public about how they made advances to their butyl rubber process that lowered energy consumption.  What they didn’t mention is that the chemistry had been developed by Std. Oil in the late 1930s by Kraus and that they had simply never employed it.  Furthermore, it is doubtful that to this very date that they modified the chemistry developed by Sparks and Thomas which came soon after Kraus in the 1940s.  It reminds this author of the Ministry song, Lies, Lies, Lies..
  7. It would appear that the true origin of this statement is up for debate.