The No of Noranda
Noranda, as part of their Chapter 11 process, has started to auction off their business.
About five years ago Noranda emerged as a relatively unknown player and evolved into a political giant in Jefferson City. With the dismantling of that giant now, it’s worth considering the “Noranda Era.”
Noranda spent their time – and money – almost entirely playing defense, in what amounted to a scorched earth strategy of opposing the utilities year after year. Major overhauls, minor tweaks, even legislation that seemed tangential to their interested were all on the radar for torpedoing. And they were remarkably successful.
Yet when they needed a life line this session it wasn’t there. The demise of Noranda was not a political event. It was caused by a myriad of reasons like Apollo hedge fund sucking out millions of dollars from their business and a glut of aluminum on the market. But these political strategies were also a contributing factor. After killing legislation and just saying ‘no’ for half a decade they dug too deep of a hole with few friends to help pull them out.
Perhaps if Noranda had negotiated in 2009 they would have enjoyed a more competitive rate for years and avoided this auction?
What’s to be learned? Maybe that the strength and stability of relationships are more importaqnt to long-term success than the outcome of any particular vote or piece of legislation.
Is there another Noranda, not just in the utility space, but on other issues that will regret “winning” in the short-term later when their fortunes have changed?
Originally in July 11 MOScout.