After some optimistic comments, comes the reality of earnings season. From Chemistry World's Andrew Turley:
To those people who are going to lose their jobs, best wishes to them, and to all of us.
The chemical industry was hit by news of nearly 4000 planned job cuts, and multiple site closures, yesterday as two iconic firms, DuPont and Dow, announced dramatic restructuring plans alongside their financial results for the third quarter (Q3) of 2012. Sales from continuing operations fell 9% to $7.4 billion in Q3 as a result of weaker than expected demand in the markets for titanium dioxide and photovoltaic materials, said chief executive Ellen Kullman.
DuPont said it would reduce its global workforce by 1500 (2%) over the next 12–18 months with the aim of saving $450 million (£280 million) in annual costs. The move will cost the company $152 million in 2012.
[snip] Meanwhile, Dow said it would cut 2400 jobs, representing 5% of its global workforce, and close 20 manufacturing plants, in a bid to shave $500 million off its annual costs over the next two years. Sales at Dow fell 10% – 7% when adjusted for recently sold business activity – to $13.6 billion in Q3, with economic instability in Europe leading to lower prices cited as a key factor.The DuPont press release does not mention the actual cuts to come, while the Dow press release actually delivers the butcher's bill:
Dow will shut down a high density polyethylene facility in Tessenderlo, Belgium, a sodium borhidrate [CJ's note: sic] plant in Delfzijl, the Netherlands, as well as a number of Performance Materials manufacturing facilities, including: an Automotive Systems Diesel Particulate Filters manufacturing facility in Midland, Michigan; Formulated Systems manufacturing facilities in Ribaforada, Spain, Birch Vale, United Kingdom and Solon, Ohio; and an Epoxy resins facility in Kina Ura, Japan. Additionally, the Company will record an impairment charge related to the write-down of Dow Kokam LLC’s assets, reflecting weak global demand for lithium-ion batteries; and will consolidate certain assets in its Oxygenated Solvents business, as well as shut down a number of other small manufacturing facilities. These actions are expected to take place over the next two years.While I'd like to take a moment to kick Andrew Liveris in the shins a bit, I just don't have the heart to do that. Suffice it to say that it is broadly confusing to me what is going on in the global economy right now. Things in the US economy seem to be bumping along fine (for example, both consumer sentiment and the ACC's Chemical Activity Barometer are up), Europe is still more or less hurting and Asia seems to be slowing. I have my skepticisms about Paul Hodges and his economic predictions, but his insistence that we live in a world defined by uncertainty and unpredictability rings true to me.
To those people who are going to lose their jobs, best wishes to them, and to all of us.
I have no idea what is going on in the manufacturing world right now. It seems a little scary in my opinion, and I am trying to figure out if these general chemical business trends are a leading or lagging indicator.
ReplyDeleteEh, I don't know. I really don't fell all that scared about the job situation really. I mean, the positive tones from the US leave me a lot less worried than last year. True, I'm applying for academic jobs, of which there are a lot right now, but after I get rejected from all those, I don't think my chances in industry are all that bad (besides the being laid off forever part at 45 which I accept now). And at least Aunt Sam will get a job for sure. I look at it all positively after all that's happened to the jobless rate in the last few months and the economy picking up in the states. I read a news story that the States are going to become the leading oil producer in the world in 2013 even with Saudi at full capacity, so that's going to take a huge weight off the economy.
ReplyDeleteOf course, I have had 1.5 litres of 9% beer by now (needed to relax the muscles after playing football yesterday and basketball today; it actually works really well), so I might be more worried tomorrow. Especially after the head of one of the academic hiring committees emailed me to tell me that I forgot to send them a CV... it might make me anxious about all the stuff I forgot to send all the others that didn't email me. Plus since I'm outside the States, I'm affected by all the European negative economic news, so that will probably bite me tomorrow when I'm sober.
After being more sober, and reading the local news reports, I want to retract my previous statement and say instead that we are all doomed. Thank you. DOOOOOOOOOOOOOOOOOOOOOMMMMMMMED!!!!
DeleteHa! It's amazing what a couple beers will do for your outlook.
DeleteBy the way, I would take it as a good sign that they told you about a missing CV. If they weren't interested, it would have just ended up in the trash without notification. Good luck!
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ReplyDeletehope for better
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