Lifton’s Great Western Confessional.
Full disclosure: I tried to buy Great Western Technology Inc.’s Troy, Michigan facility for two years, and I got the run-around from the then CFO of GWMG then under the guidance of my supposed “buddies.” I wanted to actually convert that facility to a rare earth recycling and alloy production plant. This was before Mr Levier’s time, but when he came on board the plant was sold to a very long time acquaintance of mine-we worked together at Energy Conversion Devices 45 years ago – and his plan as I understand it is to makeover the plant into a specialty alloy company. It’s a good plan.
Because of the above situation I took more than a passing interest in LCM, so I would like to give those juniors who are now going to try and “grab” it from the defunct GWMG some unsolicited advice.
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Be careful what you wish for!
LCM was just a few years ago re-furbished with a new facility and new equipment with a capacity of-I have been told informally-2000 tons per year of a type of spin-cast alloy of neodymium-iron-boron, the most widely used rare earth permanent magnet alloy.
The last reported production at LCM from 2014 that I saw published said that only about 20% IN TOTAL of the installed capacity had been used during 2014 to produce what I understand is basically just one customer’s needs.
If this is true then LCM has two problems:
- Its production may well be limited to just the amount of raw materials that it, itself, or its customer can source. Keep in mind that its feedstock of separated didymium oxide probably comes from Solvay, France, and probably from material consigned by end-use customers. I do not know where it gets, if it gets, ferrodysprosium for customer specified additions.
THUS: A potential buyer must ask itself where the company will get additional supplies and additional customers. The two are inextricable intertwined.
- Retaining the technical staff and management of LCM is a critical issue. I cannot overemphasize that Dr. Ian Higgins and his team are first-class and that if some hot-shot financier thinks that these bricks, mortar, and machinery can be run by “any” engineer then that fool deserves his fate.
I want to close by saying that the marketing manager of LCM who got the business to its present profitable state, Mr Dave Murphy, has I believe retired, although he may still be a consultant. Please, new owner-operator, get Dave (back?) and give Ian the raw materials supply so they can increase the business.
Jack Lifton is the Sr. Editor for InvestorIntel Corp. and is the CEO for Jack Lifton, LLC. He is also a consultant, author, and lecturer ... <Read more about Jack Lifton>