Sid,
Regarding my point #4, the distinction between Ballard and
the new JV company. This distinction is very significant.
It means Ballard earns money a earlier than it otherwise
would, and a lot more of it.
First, we need to be clear on one fundamental point. Ballard
will sell fuel cells to the JV co. "at arms length prices -
no question." This quote is from Paul Lancaster, Ballard's
treasurer. So as soon as the JV co. starts buying fuel cells,
Ballard starts generating revenues. They will buy in small
volumes at first, but as the JV ramps up production to
prepare for product sales, revenues will come to Ballard
during the manufacturing phase, long before testing, shipping,
sales, etc. This may mean the difference of a year or more.
One of the things that often kills a hi-tech R&D company
is the "let's do it all" attitude, i.e. let's do our own
manufacturing, marketing, distribution, etc. This has been
the cause of many good technologies never making it to
market. Ballard has excellent management, and they did not
make this mistake. It was never part of their plan. Sure,
they would have made much more if they manufactured and
sold the engines themselves, or better yet, the complete
automobile! But they would never have made it. To say that
"Ballard has lost X% of its earning potential by partnering
with Daimler" is silly.
It's like saying "oh, our lab has just developed a wonder
drug. Let's NOT partner with a big Pharmaceutical co. who
has global distribution and sales force. Let's sell it all
from our lab!". There are good reasons why stocks go up when
a small player partners with a major. This is one.
The corollary of this point is that with Daimler behind
the JV co, the volume of sales will be much bigger than
Ballard could ever have done alone. So not only does $$
start coming in sooner, it will do so in larger volumes.
As far as the timeframe for introduction of product into
the mainstream, I am not too surprised that it hasn't been
drastically reduced by the JV. It will shorten it somewhat,
but more importantly, it will increase volumes dramatically.
Finally, the deal with Daimler does NOT in any way restrict
Ballard in selling fuel cells to any other company. Nor is
the new JV co. resricted - it can sell to anyone, GM, Ford,
Chrysler, Toyota,... This is direct from Paul Lancaster.
By the way, there are LOTS of examples of one co's parts
in another co.'s cars. Suzuki engines are not only found
in the Suzuki Swift/Sidekick, etc. but also in the Pontiac
Firefly and Chevy Sprint. BMW put a volkswagen engine into
one of their models. This tendency is now called outsourcing
and as anyone who listens to the news knows, it is a growing
trend. So yes, Ballard and the new JV co. can, and almost
certainly will, sell to other auto makers.
The more I look at this deal, the more I am impressed with
Ballard's excellent management.
Garth. |
