This article originally appeared in Chemical Solutions, Issue 12.
DowDuPont is busy cutting $3.3 billion in costs before its planned split into three independent businesses, but so far the impact on USW chemical workers has been minimal.
The company shut down its manufacturing plant in La Porte, Texas, and its Kevlar facility in Charleston, S.C. Last March, it decided to move DuPont’s production of aramid intermediates at the Chambers Works site in Deepwater, N.J., to a supplier from India that had newer process technology. Decommissioning of the manufacturing section is expected to be finished this summer.
The company said it would help the 100 USW-represented Chambers Works employees laid off from the production move with transfer to other jobs within the corporation or to other positions with local employers.
DuPont is a tenant at Chambers Works. The company spun off its performance chemicals division to a new company called Chemours on July 1, 2015. Chemours took control of the Chambers Works site.
So far, the merged company has not shuttered any Dow sites or laid off any Dow workers, according to Kent Holsing, chair of the DowDuPont North American Labor Council (DNALC).
Chopping Expenses
DowDuPont plans to save money through procurement activities, global workforce reductions, building and facility consolidations and select asset shutdowns. Before splitting into three independent segments, the material sciences and agriculture divisions each are eliminating over $1 billion in costs and the specialties segment is expected to save just under $1 billion. Nearly 60 percent of DuPont’s corporate overhead costs have been eliminated
DowDuPont Chief Executive Officer Ed Breen is shutting down research and development projects that are expensive, require years of work and may have poor investment returns. He calls these projects, “moonshots,” and considers them a waste of money. One such project was DuPont’s $200 million cellulosic ethanol bio-refinery in Iowa that opened in 2015. The plant turned corn stalks, leaves and cobs left in fields into 30 million gallons of ethanol a year. That business is for sale.
Instead, DowDuPont will invest in smaller projects that cost no more than $30 million, carry less risk and improve profit margins. Plans are for the material sciences division to have incremental capacity expansions over several years to make it a “cash machine.” Recently, the newly designed laboratories in the Experimental Station building in Delaware received a $200 million facelift to attract top scientists for the company’s consolidated industrial biosciences division. It creates enzymes for a variety of products.
Upcoming Split
The materials science division will be the first to split around April 2019, and it will have headquarters in Michigan. The agriculture division will separate by June 1, 2019. It will be called Corteva Agriscience and be headquartered in Delaware. Then, the specialty products division will be formed, and it will be called DuPont. Its headquarters will be in Delaware, too.
Marc Doyle, chief operating officer for the specialty products division, has not said if he will be the CEO for the new DuPont. He told the media that management is working on how to handle DuPont’s billions of dollars in pension liabilities, and will discuss it later this year.
DowDuPont earned $1.1 billion profit for the first quarter of 2018. The materials science division increased sales 17 percent, and the specialty products division had an 11 percent increase in sales. The agriculture division saw net sales decrease 25 percent because of weather delays in the northern hemisphere and Brazil.
Delaware-based DuPont and Michigan-based Dow Chemical had their $150 billion merger approved by all regulatory authorities worldwide in August 2017.
DowDuPont Council Petition Needs Your Signature
The 2017 DowDuPont merger was about satisfying Wall Street and the companies’ shareholders, and the company’s leaders continue to pander to these investment interests through their plan to chop over $3 billion in expenses. They say they will run the merged organization “lean and mean” by shutting down plants, eliminating jobs, laying-off employees and reducing the number of suppliers.
In response, the DowDuPont North American Labor Council (DNALC) launched a global petition to DowDuPont CEO Jim Fitterling. The council is challenging the multinational corporation to focus on the interests of its employees, their families and their communities instead of paying attention solely to Wall Street.
“Globally, DowDuPont employees will face many changes and challenges in the coming months, so the company’s unionized workers around the world are mobilizing together to ensure that everyone’s best interests are represented,” said USW Local 12075 President Kent Holsing from the Midland, Mich., facility. Holsing chairs the DNALC.
“We also are speaking for the non-union employees who do not have a voice. Our goal is to use this petition as a platform to ensure the employees and their communities are represented and heard,” he added.
The petition is available in English, Spanish and Portuguese by going to http://usw.to/dowdupontpetition
Please post and share the petition on social media and your local union webpage.