If Detroit doesn’t build cars, then there is little market for catalytic converters. And if there is a falling market for those pollution-control devices, there is a falling market for the platinum and palladium that go into the converters. That domino theory struck Stillwater Mining (NYSE:SWC) yesterday and it looks like it is about to strike it even harder today.
The company announced yesterday that it would lay off all 526 employeesat one of its mining operations in south central Montana. Permanentcuts will total about 320 full-time staff and 50 contractors, about 21%of Stillwater’s 1,770 Montana employees. A drop of 60% in the prices ofplatinum and palladium are getting the blame for the layoffs.
According to the Billings Gazette,Sweet Grass County, where the mine is located, will lose about 40% ofits property tax revenue if the mine is shut down completely.Neighboring Stillwater County would lose a third of its tax revenue ifa second mine in that county is shuttered.
Stillwater Mining is majority-owned by a subsidiary of Norilsk Nickel,a huge Russian mining company that controls about 50% of the world’ssupply of palladium. The company reports third quarter earnings latertoday, but don’t expect any good news. Shares closed at $2.25yesterday, down about 90% from 52-week highs.
The news out of Montana demonstrates just how pervasive the autoindustry is to the overall US economy. If the auto makers fail, therewill be more than just a ripple effect. It will be more like a tsunami.
Paul Ausick
November 19, 2008
100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.