An Unchanging Approach

Warren Buffett's course hasn't been altered by the current economic events.We've spent a lot of money in the past four months,Mr.Buffett pointed out.He mentioned his investments in General Electric,Goldman Sachs,William Wrigley and Dow Chemical.Mr.Buffett read the book "The Intelligent Investor" 60 years ago-especially chapters 8 and 20.My ideas haven't changed since,he insisted.I'm happy in my 50-year old house.I love it,Warren Buffett professed.

A Determined Executive

Dow Chemical(DOW) has managed 388 consecutive quarters of no dividend cuts,Andrew Liveris said.This CEO will never cut the dividend,he swore.Our stock price is absolutely ludicrous.We're gonna remain strong.We've got tremendous financing arranged for our Rohm and Haas deal.We've got financial flexibility to do more this year,such as share buybacks.The stock price is divorced from the reality of the company,Mr.Liveris insisted.

Looking For Relief

Dow Chemical's portfolio is half commodities-based,half specialties,CEO Andrew Liveris explained.The commodities part has come down in price.There isn't one customer out there who isn't asking for cuts-even specialties customers.In some cases,even they are getting price cuts.Post-Olympics China has slowed down considerably,but local stimulus in China, such as infrastructure projects, will help.They're looking at 8-9% Gross Domestic Product.Frankly,I think the emerging world is gonna help us out of this crisis,Mr.Liveris conjectured.

Focus on Dow Chemical:Navigating the Crisis

Dow Chemical CEO Andrew Liveris said that hurricanes took out 80% of the firm's U.S. capacity,but now he can use different hydrocarbon feedstock because of demand destruction from the financial crisis.Price power is very poor.You have to manage costs,manage capital to keep yourself through this,keeping your long range plan in mind.Europe is in just as bad of a shape as the U.S.,Mr.Liveris observed.

The True Impact

Dow Chemical CEO Andrew Liveris summed up the true impact of soaring energy costs as a resetting of the value chain.The fact that 85% of proven U.S. energy reserves are off-limits for environmental reasons is ludicrous,Mr.Liveris feels.It would be O.K. to drill in the outer continental shelf.Countries such as Norway are already doing this without causing environmental destruction.The cap and trade system,which is now before the U.S. Congress and amounts to a tax on the biggest polluters,is a necessary evil.It's the only thing that will reward good behavior at the emissions end.The energy crisis is one of the most complex issues that mankind has presented to itself,Mr.Liveris observed.

Dow Chief Explains

The candid CEO of Dow Chemical(DOW),Andrew Liveris,has expressed bitter criticism of the U.S. government's failure to adopt an energy policy.We are in a true energy crisis,and U.S. competitiveness is losing ground as a result,Mr.Liveris said.Higher energy costs are causing Dow to have difficult discussions with its customers.Feedstock and energy costs have continued to rise from their Q1 high.Dow utilizes one million barrels of oil a day to convert into useful products.The company is essential to the value chain.They have to pass price increases on.It's one of the few things they can do.Overwhelmingly,everyone in the value chain downstream from Dow has said thank you:now they can raise their prices in turn,Mr.Liveris revealed.