It sounds so good and it does makes sense to me. History does not support Vertical integration. Both GWM and MCP went bankrupt both debt and lack of focus on one thing led to this. History also does not support it. During the 1950s many companies tried it and either failed or are still trying to undo it. All three of the US auto manufactures tried to bring all the soup to nuts under one roof and loss focus on cars. Alcoa was a successful aluminium company went into producing everything and almost died. GE was highly successful under Walsh but has failed since then and has spent years selling off parts of business. DEC and Data General both took on making there own disk drives power supplies and sales channels to be soup to nuts. Both loss focus on core computer business. both gone.
You are welcome to disagree with me but if you do please start with a one or two examples of companies that are stronger 5 or ten years after vertically integrating. Vertically integrating always sounds great on paper, even looks good to me, large cost savings, captive market custom products from one level to next. The cases where it works are few.
Toly I owned Freeport. You own Freeport MacMaran (SP) today. I owned it when it was a small successful gold company stock was going up and they were paying a very good dividend. (10%???) They took all their cash plus debt and expanded, manly Horizontally but also a little vertically. Where are they today? Many times bigger yes , successful compared to what they were?
LYC Price at posting:
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