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Wednesday, 02/19/2014 7:52:22 AM

Wednesday, February 19, 2014 7:52:22 AM

Post# of 6681
Unless someone can prove that the LME operated any differently during Exide's FY13, the year that apparently led to the BK filing, this whole circus is a wild goose chase and a distraction from genuine issues that will have an immediate and consequential impact on common shareholders. Most battery supply contracts have a lead escalation provision which indexes customer purchase costs to changes in commodity pricing quoted on various exchanges. In Europe this is typically the London Metals Exchange; in the U.S. it is typically the American Metals Market.

It should be noted that these published indices are used to peg customer pricing. The AMM does not warehouse or offer lead for sale. The LME does warehouse and sell lead, but is not the exclusive source for raw materials in the Eurozone. Many other competitors operate in the same geography as Exide, all are equally affected by lead pricing and NONE of them filed for bankruptcy... only Exide did.

In business, if your costs go up, you raise prices. It is called a force majeure. Airlines and trucking companies raise prices, historically, when fuel costs spike. It is done with commodity prices, all the time. It has been done in the battery industry for 75 years! People took issue with my comment the other day that Exide lacked experienced battery leadership to help guide Caruso through an effective reorganization. Here is just one concrete example of how loading the top of a battery company with "newbies" creates an experience gap and leads to catastrophic results.

JMHO.

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