RUSH: I have three words for you people: ‘Dubai Ports Deal.’ Do you remember the conniption fit that erupted out there when the Dubai Ports Deal was announced? What was going to happen? Dubai of the United Arab Emirates has a company called Dubai Ports World, and they were going to run six — not ports, but six — terminals at various ports in the United States. It was amazing to watch! The Democrats and the Republicans in Washington got into a race to see who could be first to pass legislation denying this, and the Republicans succeeded in it, and then Dingy Harry went out there and tried to credit Chuck Schumer for it in a press conference, but you people out there were just agog. You couldn’t believe it. ‘Why, after 9/11, Dubai from the United Arab Emirates in the Middle East, going to run our ports. Oh, my God, this is horrible!’ Of course I tried to tell you that I’d done a serious investigation of DPW, Dubai Ports World, I’ve been to Dubai, and I told you of all the other ports they run around the world and all the other terminals they run, and some of you changed your opinion on it.
Most of you didn’t and thought that I had lost my mind. Well, I have two more words for you now. ‘Dow Chemical.’ (laughing) If you thought the Dubai Ports World deal was bad, wait ’til you hear this. ‘A consortium of Middle Eastern investors and American buyout firms is preparing a $50 billion approach for Dow Chemical Co. in what could be the world’s biggest ever leveraged buyout, a paper said on Sunday. Quoting sources close to the deal, The Sunday Express, a UK tabloid paper, said a financing package has been put in place for a break-up bid of between $52 to $58 a share and an approach valuing the company at least $50 billion could come by the end of this week…. At least half of the capital is being provided by investors from Saudi Arabia, Kuwait, Bahrain, Qatar, UAE,’ which includes Dubai, the United Arab Emirates, ‘and Oman, with the rest contributed by a number of U.S. buyout firms including Kohlberg Kravis Roberts, it said. Representatives of Dow Chemical and Kohlberg Kravis Roberts were not immediately available for comment.’
So a consortium of Middle Eastern countries is to buy one of our largest CHEMICAL companies. (laughing) Sweeeeeet! You’re going to have Arabs owning Dow Chemical? Just the word ‘chemical.’ You get hold of a chemical company as big as Dow who knows what you can make, and you thought the Dubai Ports Deal was bad. I want to see… I’m just going to sit back. I’m not going to make any more mention of this. I’m going to sit back and I’m going to wait and I’m going to see if all hell breaks loose over this, because this is infinitely… We all hear about chemical weapons (gasp!) and weapons of mass destruction (gasp!) and here the largest chemical company in the country is going to be purchased by Arabs (ha, ha, ha!) in conjunction with an American company, Kohlberg Kravis and Roberts. Okay. Can Anybody say, ‘Mustard gas is being made in North Caldwell, New Jersey, by the Sopranos?’
RUSH: I went to the Dow Chemical website, ladies and gentlemen, after learning here that a consortium of Middle Eastern investors from Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates, including Dubai, and Oman are investing along with Kohlberg Kravis and Roberts to take Dow Chemical over at $50 billion. We have Arab dictatorships investing in Dow Chemical. I just remember all of your reactions to the Dubai Ports Deal. So I went to the Dow Chemical website. Let me read to you what the Dow Chemical website says. Among many other things, this is what it says: ‘Our modern society and global economy depend on substances that, if not handled, stored, transported or secured properly, could cause harm.’ (Gasp!) ‘These substances serve as critical components for medicines, plastics, automobiles, and building materials, to name just a few. In today’s world, there is concern that chemical facilities could be attacked by or chemicals could be used by those who wish to intentionally cause harm, disrupting our way of life.’ I think that’s pretty accurate.
I think Dow Chemical has a pretty good assessment there of the pitfalls, the dangers, the risks involved in being a chemical company. So the obvious question would be, ‘What systems will these Arab dictatorships put in place or do they have in place to secure the stuff that they will own?’ It’s just a little question. As I said before the previous hour came to a conclusion, I’d like to know something. Any of you libs out there particularly who think we need to get out of Iraq and we don’t need to be messing around with Iran — I know you think that — what your thoughts are on these Arab countries ending up owning Dow Chemical, and if any of you want to call and tell me what you think of this, feel free, because I just have a question for you.
RUSH: Midland, Michigan, and Francis. Hi, you’re up, I’m glad you called.
CALLER: Thank you very much, Rush. Am I coming through all right? There’s a little cracking on the phone.
RUSH: Yeah, you’re a little muffled out there. It’s hard to understand you.
CALLER: Let me press another button.
RUSH (mimicking muffled sound): It’s not so much crackling, on it, it’s just… Well, you’re muffled, like you’re using a phone you got at Wal-Mart.
CALLER: I don’t think so. (Laughing.) I was going to comment that the opportunities for Dow Chemical with this activity, is beyond belief. Remember petrochemical stocks are basically something like, what, 80% or 70% of their production process in styrenes, plastics, whatever, guess who their suppliers would be? Their owners, and it wouldn’t be such a bad deal. They’re not buying their feedstocks at the same price you would find in the open market.
RUSH: I’m just going to tell you: look, I understand it would be a great deal to the stockholders.
CALLER: They’re going to make out like a bandits and it’s going to help the United States in terms of employment.
RUSH: Yeah, but I’m just going to tell you what most people are going to think about this, because I have experience with the Dubai Ports Deal.
CALLER: (Laughing.) They have no imagination.
RUSH: What they’re going to think is, ‘Okay, we got these Arab dictatorships.’ Let me read you the list again. Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates including Dubai, and Oman. ‘They’re buying a chemical company. If they want to use an American chemical company to start making weapons of mass destruction, they’re going to do it.’
CALLER: Ah, come on. If these guys wanted to they could create their own petrochemical companies. They’ve got all the money in the world. They’re taking an existing facility and putting it to work. There is nothing to stop these guys if they want to compete with us. I would rather be in the driver’s seat running the world economy on things that are benefit the United States, which it will do.
RUSH: Wait a minute. Wait just a second. There’s nothing that could stop these guys if they wanted to compete with us, and you want to be in the driver’s seat of…?
CALLER: They run the petro companies. The world runs on oil. They control the oil. They have a whole bloody thing.
RUSH: Yeah, but they won’t when Nancy Pelosi becomes president.
CALLER: Wanna bet? (Laughing.) Nancy Pelosi would fall on herself trying to figure out what door to open.
CALLER: Rush, are you disappoint me? I’m just kidding you. You don’t. These guys know what they’re doing, and Dow Chemical would benefit. Now, the European socialists that run it wouldn’t like it.
RUSH: Wait, you are muffled and I’m not getting every word.
CALLER: I can’t help it. It’s this crappy Wal-Mart phone, probably.
RUSH: I just need to ask you a question.
RUSH: Did you not call me a socialist?
CALLER: No, no, no, no, no! I said, the European socialists who run Dow Chemical won’t like it, because it’s pretty much a European management-type thing that is in control of Dow right now.
RUSH: The Europeans won’t have any problem with it. When to look at the Saudis as a threat.
CALLER: None whatsoever. They love them. They love them, except it’s all about power.
RUSH: You guys said these guys, the Arabs, would rather buy an existing outlet than compete with us?
CALLER: Absolutely. They could do it if they wanted to.
RUSH: Well, then, why don’t they?
CALLER: They may. That’s just it. That’s just it.
RUSH: Well, we may force them into that when we deny them the rights to do this deal.
CALLER: And guess what? They got the feedstocks. They got the whole bloody thing. Dow Chemical has got plants all over the world, huge plants, in the Southwest. They’re building plants in China. They got plants in South America.
RUSH: You’re not telling me anything I don’t know. You’re missing my point here. The reality of this is, I tried this during the Dubai Ports Deal. It didn’t work. You can sing the praises of this deal all you wanted, and you can talk about how this is no big deal, and people aren’t going to hear it. They’re going to think, ‘Chemical company owned by Arab dictators. War on terror! Oh, no!’ That will be the end of it. This may bring Congress back early so that the Democrats and Republicans get into a race again to see who can be the first to pass legislation saying this can’t happen, just like they did with the Dubai Ports Deal. Nobody is going to look at it with logic. Logic is not only not appreciated, logic isn’t relevant here. We’re going to be discussing raw emotion on it. You wait and see.
RUSH: Kathy in Midland, Michigan, well known to the EIB Network. It’s great to have you with us.
CALLER: Thank you for taking my call, and of course I’m very interested in your subject today. I am a native of Midland. I was born here and actually my family is one of the founding families of the area.
RUSH: Let me ask you a quick question out there, Kathy. Is Midland, Michigan, in the middle of the state?
CALLER: Well, it’s about 100 miles north of Detroit, toward — well, 20 miles away from Lake Huron’s Saginaw Bay.
RUSH: All right. Some places named ‘Midland’ are in the middle of nowhere. I just wanted to find where this is.
CALLER: You heard correct. We are in the middle of nowhere, and when some of the people who are employed by Dow Chemical and have come from the entire world, believe that they’ve gotten to the end of the earth, however, they find that we have a magnificent community. There are about 6,000 employees at the company, and our population for the city is around — Alexander 40,000, but it was the environs, we’re probably just under a hundred thousand. So of course this would totally devastate this area.
RUSH: Why? What would change?
CALLER: What would change? Dow Foundation, we have foundations that have been funded because of employees who have profited because of their work with the Dow Chemical Company. We have just had, actually, an opening day —
RUSH: Let me tell you something, if they own stock in it and this deal goes down, they’re going to benefit tremendously.
CALLER: I heard the man speak before, and I think I do not own any stock in Dow Chemical because it’s not my sacred cow.
RUSH: No, you said the employees, if they own stock, they’ll do well — maybe I missed something in what you were saying, but you said, ‘We have foundations that have been funded because of employees who have profited because of their work with the Dow Chemical Company.’ You think they’re going to be fired if…?
CALLER: Oh, no. We have a foundation called the Dow Foundation. We have a foundation called the Strosacker Foundation. They have been set up because of the people who began Dow Chemical over a hundred years ago, and in turn, these foundations help to build our hospitals, they just —
RUSH: I understand, but I’m running out of time, I don’t mean to be rude. How is this going to change if the Dubai people end up owning Dow?
CALLER: Well, when I went to a meeting — I belong to the Chamber of Commerce, and they have a meeting that tells people what is going to happen. About three years ago I went to a meeting, and the screen as we came in, there was a horizontal view of a city, and I thought that looks like Midland, and, oh, that’s wrong. It was Qatar. Dow Chemical has a facility in Qatar that they went to there because the chemicals —
RUSH: Well, wait, I’m still not understanding. You have to think they’re going to shut down Midland, Michigan, if they buy it.
CALLER: Sure they would. Sure they would. There’s no reason for them to stay in Michigan. To transport out of this area anything is a railroad and over our roads, maybe airplanes. Why would you keep…? This is a dead end. Frankly, it’s a dead end place! The Dow Chemical Company was started here because of a strike.
RUSH: You don’t want to say it that way. If you’re going to call Midland, Michigan ‘a dead end place,’ then you’re justifying them moving out because nobody wants to be in a dead end place.
CALLER: Well, I would not do business… I mean, I could not afford my business if —
RUSH: Why don’t you do this. You’re a member of the Chamber of Commerce?
RUSH: Suggest changing the name of the town to ‘Midlandistan,’ and it might not like seem such a dead place.