Monthly Archives: March 2013

I’m gonna analyze the financial standings for the years before and after the crisis!

1981: http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=ftft000020011206de1q00mxk&pp=1&fcpil=en&napc=S&sa_from=
http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=ftft000020011206dd8f01azx&pp=1&fcpil=en&napc=S&sa_from=

1982: http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=ftft000020011206df1q005fc&pp=1&fcpil=en&napc=S&sa_from=
reason: http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=ftft000020011206debj012iq&pp=1&fcpil=en&napc=S&sa_from=

1983: http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=ftft000020011205dg2g00urp&pp=1&fcpil=en&napc=S&sa_from=

1984: http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=pr00000020011205dh2n002u9&pp=1&fcpil=en&napc=S&sa_from=

*Accident happened end of 1984 and S&P lowered their credit rating because of outstanding loans*
http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=FTFT000020070505dh190475k&pp=1&fcpil=en&napc=S&sa_from=

1985: http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=plrwbm0020011204di4a00810&pp=1&fcpil=en&napc=S&sa_from=

1986: many many debts and sells off many assets
http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=tmsc000020011207di4803aqx&pp=1&fcpil=en&napc=S&sa_from=
http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=chiabc0020011204di5l0079u&pp=1&fcpil=en&napc=S&sa_from=
Earnings: http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=ftft000020011204dj1t009b3&pp=1&fcpil=en&napc=S&sa_from=

1987: http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=FTFT000020070428dk1r00qdy&pp=1&fcpil=en&napc=S&sa_from=

1988: http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=ftft000020011129dl1o00fnw&pp=1&fcpil=en&napc=S&sa_from=

From 1981 to 1984, earnings per share rose steadily and Union Carbide is in good financial standings according to their annual reports. By 1985, the company’s market value dropped by 2/3 to less than $3 billion. Union Carbide’s debt stood at 63% of capital, and its equity was cut to a quarter of its former value. Income rose to 78% in 1987 to $232 million, but high debt service made it hard for the company to develop and introduce new products. In 1988, Union Carbide reduced its debt by more than $400 million and increase equity by almost $600 million.

Strengths

1. Technology leadership and innovation – Advanced process technologies have given them a leadership position in their large Basic Chemicals and Polymers businesses. “For nearly 80 years Union Carbide laboratories have been the source of a steady stream of innovation. Ethylene, ethylene oxide, ethylene glycol and the hundreds of other chemicals that became the building blocks of the chemical industry were developed in their laboratories.” They produce their product very quickly because of their knowledge of technology.
http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=FTFT000020070505dg6m02wic&pp=1&fcpil=en&napc=S&sa_from=

2. Cost efficiency. Union Carbide Corporation “operates some of the largest, most cost-efficient chemical plants in the world.” Union Carbide Corporation operates two business segments. Specialties & Intermediates converts basic chemicals into a diverse portfolio of chemicals and polymers for industrial customers. The Basic Chemicals & Polymers segment produces chemicals for use by both the Specialties & Intermediates segment and third party customers. Because Union Carbide Corporation does not further process chemicals into specific consumer products, their operations are of bulk scale and allow for planning and timing of production to maintain high efficiency goals.
http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=FTFT000020070505dea40104i&pp=1&fcpil=en&napc=S&sa_from=

3. Joint ventures. Union Carbide Corporation has built a number of joint ventures with foreign corporations. These joint ventures have increased the amount of potential customers in foreign markets, and introducing Union Carbide Corporation to many new international markets. Union Carbide Corporation has formed joint ventures with Petrochemical Industries Company of Kuwait to produce chemicals primarily for Asian markets. They have also formed a joint venture with Enichem of Italy, named Polimeri Europa, which “is poised to become Europe’s lowest-cost polyethylene producer.” These, and other strategic investments and alliances have promoted profitable growth globally.

4. Managerial strategy – “The new human resources policies now reflect shared responsibility with employees for Union Carbide’s success.” Union Carbide Corporation has trimmed its middle level management and implemented “Teams” in every department to facilitate these new policies. Each team member has a voice and is educated in his specific field such that the teams can collaborate on any issues and develop solutions without a Manager. Only decisions that are not supported in existing policies must be further approved. This grants employees a great amount of empowerment and “spares some of the red tape” formerly involved in addressing day to day issues within the chemical plants. “Given more responsibility and encouraged to redesign the way they work, our people slash plant downtime and overtime costs, sharply reduce costly inventories of products and raw materials, simplify organizational structures, eliminate bottlenecks and reduce paperwork.”
“Carbide Lays Out Its Strategy through 1983,” Chemical Week, September 19, 1979, p. 49.

Weaknesses

Mostly environmental issues. The process of making chemicals can be very hazardous to the environment and to the communities that surround them.

http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=FTFT000020070505de8j012ql&pp=1&fcpil=en&napc=S&sa_from=

“The tragedy of Bhopal continues to be a warning sign at once ignored and heeded. Bhopal and its aftermath were a warning that the path to industrialization, for developing countries in general and India in particular, is fraught with human, environmental and economic perils. Some moves by the Indian government, including the formation of the MoEF, have served to offer some protection of the public’s health from the harmful practices of local and multinational heavy industry and grassroots organizations that have also played a part in opposing rampant development. The Indian economy is growing at a tremendous rate but at significant cost in environmental health and public safety as large and small companies throughout the subcontinent continue to pollute. Far more remains to be done for public health in the context of industrialization to show that the lessons of the countless thousands dead in Bhopal have truly been heeded.”

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1142333/

A link we should all look over, a lot of useful information.

Just adding our proposal so that all our information is in one area and there’s easier access to it.

Union Carbide Corporation is a chemicals and polymers company. The company possesses some of the industry’s most advanced process and catalyst technologies, and operates some of the most cost-efficient, large-scale production facilities in the world. Union Carbide primarily produces chemicals and polymers that undergo one or more further conversions by customers before reaching consumers. Some of these materials are high-volume supplies, while others are specialty products meeting the needs of smaller market niches. The end-uses served include paints and coatings, packaging, wire and cable, household products, personal care, pharmaceuticals, automotive, textiles, agriculture and oil and gas. In August 4, 1999 Union Carbide became a subsidiary of The Dow Chemical Company (“TDCC”) as part of a transaction valued at $11.6 billion. This transaction was closed on February 6, 2001. Since Union Carbide’s attainment by TDCC, Union Carbide sells most of the products it manufactures to TDCC and is an essential part of the Dow family of companies.

On the night of December 2-3, 1984, there was a gas leak accident at the Union Carbide India Limited pesticide plant in Bhopal, Madhya Pradesh. Over 500,000 people were exposed to methyl isocyanate gas and other chemicals. The toxic substance made its way in and around the slums located near the plant.Estimates fluctuate on the death toll. The official immediate death toll was 2,259. The government of Madhya Pradesh confirmed a total of 3,787 deaths related to the gas release.Others estimate 8,000 died within two weeks and another 8,000 or more have since died from gas-related diseases.A government affidavit in 2006 stated the leak caused 558,125 injuries including 38,478 temporary partial injuries and approximately 3,900 severely and permanently disabling injuries.

On December 5, 1984, two days after the accident, the US chemical company imposed a worldwide ban on the production and shipment of methyl isocyanate, as the deaths caused by a leak of the highly toxic gas from the company’s plant at Bhopal. Union Carbide experienced a sharp fall in share price by Dollars 5 1/2 to Dollars 39 in the first few hours of trading on December 7 (four days after the accident) underlined deep uncertainty in the US about possible liability claims on the company over the Indian gas disaster and the extent of its insurance cover. Since the accident early Tuesday the company’s market capitalization has fallen by Dollars 740m to Dollars 2.7bn. On December 8, 1984, five days after the accident, Mr. Warren Anderson, chairman and chief executive of Union Carbide of the US, faces expulsion from India after his arrest yesterday on charges of ‘criminal and corporate liability’ for the pesticide gas leak at the Bhopal plant.

After a seven-week inquiry, it was found that the Bhopal gas leak that killed at least 2,000 people resulted from operating errors, design flaws, maintenance failures, training deficiencies and economy measures that endangered safety, according to present and former employees, company technical documents and the Indian Government’s chief scientist. According to a review by the New York Times of some company documents and interviews with chemical experts, plant workers, company officials and former officials disclosed the following irregularities at Bhopal:

• When employees discovered the initial leak of methyl isocyanate at 11:30 P.M. on Dec. 2, a supervisor – believing, he said later, that it was a water leak – decided to deal with it only after the next tea break, several workers said. In the next hour or more, the reaction taking place in a storage tank went out of control. ”Internal leaks never bothered us,” said one employee. Indeed, workers said that the reasons for leaks were rarely investigated. The problems were either fixed without further examination or ignored, they said.
• Several months before the accident, plant employees say, managers shut down a refrigeration unit designed to keep the methyl isocyanate cool and inhibit chemical reactions. The shutdown was a violation of plant procedures.
• The leak began, according to several employees, about two hours after a worker whose training did not meet the plant’s original standards was ordered by a novice supervisor to wash out a pipe that had not been properly sealed. That procedure is prohibited by plant rules. Workers think the most likely source of the contamination that started the reaction leading to the accident was water from this process.
• The three main safety systems, at least two of which, technical experts said, were built according to specifications drawn for a Union Carbide plant at Institute, W. Va., were unable to cope with conditions that existed on the night of the accident. Moreover, one of the systems had been inoperable for several days, and a second had been out of service for maintenance for several weeks.
• Plant operators failed to move some of the methyl isocyanate in the problem tank to a spare tank as required because, they said, the spare was not empty as it should have been. Workers said it was a common practice to leave methyl isocyanate in the spare tank, though standard procedures required that it be empty.
• Instruments at the plant were unreliable, according to Shakil Qureshi, the methyl isocyanate supervisor on duty at the time of the accident. For that reason, he said, he ignored the initial warning of the accident, a gauge’s indication that pressure in one of three methyl isocyanate storage tanks had risen fivefold in an hour.

1. http://global.factiva.com/aa/?ref=FTFT000020070505dgc4031wk&pp=1&fcpil=en&napc=S&sa_from=
2. http://global.factiva.com/aa/?ref=FTFT000020070505dgc7031gb&pp=1&fcpil=en&napc=S&sa_from=
3. http://global.factiva.com/aa/?ref=NYTF000020080612dh1s000b5&pp=1&fcpil=en&napc=S&sa_from=
4. http://global.factiva.com/aa/?ref=FTFT000020070505dgc5031rl&pp=1&fcpil=en&napc=S&sa_from=
5. http://global.factiva.com/aa/?ref=NYTF000020080722dh1s000jh&pp=1&fcpil=en&napc=S&sa_from=
6. http://www.mergentonline.com/companydetail.php?compnumber=8497
7. http://www.mp.gov.in/bgtrrdmp/relief.htm
8. http://www.webcitation.org/5qmWBEWcb

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