Monday, December 17, 2012

What is Andrew Liveris saying, exactly?

So we've talked about Dow's layoffs and retrenchments already; here's Andrew Liveris in this week's C&EN talking to investors (article written by Alex Tullo):
Dow Chemical’s chief executive officer, Andrew N. Liveris, isn’t as optimistic as he once was.
In 2009, Liveris had just guided the company through the financial crisis and Great Recession, all while digesting its purchase of specialty chemical powerhouse Rohm and Haas. The “new Dow,” armed with enormous economies of scale and its widest-ever breadth of technical expertise, seemed ready to conquer any market it coveted. Solar panels, lithium batteries, and polymers made from ethanol, though new to Dow, were targets every bit as legitimate as the packaging, paint, and construction materials that had always been at the firm’s core.
Faced with slumping revenues and earnings, Liveris is now cutting back. In October, Dow announced it will lay off 2,400 workers—5% of its workforce—and shut down 20 plants. And reversing its stance of only a few years ago, the company is cutting future-oriented spending by about $1 billion in total. Mostly this will come from capital projects, but R&D will not be spared the ax. Dow also plans over the next two years to divest underperforming businesses that together generate $1 billion in annual sales. (emphasis CJ's) 
At an investor forum in New York City on Dec. 3, Liveris tried to justify such measures to reporters, investors, and analysts. Dow didn’t change, he maintained. The rest of the world did by slowing almost to an economic halt. 
Even with the cuts, Liveris said he wants to keep Dow’s scientific staff intact. When asked whether he will lay off chemists, Liveris responded, “Not to my knowledge. We are pretty much redeploying people. Scientists are precious. You bring them in, you train them, you redeploy them.” (emphasis CJ's) 
He added that the company wants to attract more scientists. For example, Dow is moving researchers from a former Rohm and Haas laboratory in Spring House, Pa., to a newer, former Pfizer site in nearby Collegeville. “Finally, our scientists in the Philadelphia area are getting modern facilities,” he said, positing that Dow could “attract the best scientists on the East Coast.”
So. Couple of things:
  • So we're not laying off chemists, but we're cutting underperforming businesses and R&D?
  • We know that Dow has/will laid off 2000 employees; doubtless some of them are bench/R&D chemists (not necessarily equivalent). Have all the chemists affected been offered transfers to other Dow sites? 
  • If you read the rest of the article, it's about how much Europe and China's slowdowns are affecting Dow (which, I suspect, is draws a significant portion (a majority?) from non-US business.) What does that say for US growth prospects in 2013? 
Hmmmmmmm. 

6 comments:

  1. He's doing his best to alleviate the national shortage of technical people he so frequently speaks about.

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  2. I've always considered myself precious, a special snowflake.

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  3. I worked for Dow on the solar project and was cut when Dow decided to shift resources to an external firm. I was lucky as there was some effort to find me an internal job but it was not as attractive as just leaving. I was told when I joined the solar project that risk taking was valued at Dow. That was not true and I have heard there is difficulty in finding people to take on challenging projects after what happened in solar. Do not believe what Liveris is saying. They will cut R&D hard.

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  4. R&D at Spring House was cut by about 16% I think. that does include the India tech center, which was shuttered and also some non tech people but alot of chemists and Phd researchers were cut. Also the move to "newer and more modern facilities" is non-sense. We are moving from a site which provides us with roomy safe working conditions , about half of the site has been updated in the last few years also, to a site which is >20 years old, has substandard labs, meaning less safe, much less storage, etc. There is something afoot with this move or else DOW has completely lost it if they feel this is a good move for us.

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  5. I love how Liveris stands in dead opposition to allowing much natural gas to be exported, because he wants the gas to be captive inside North America and drive his costs down the international competition. So for Dow, it's all about free markets and the government never ever "picking winners and losers", until the day protectionism and nationalism are better for the bottom line. Since Liveris is far too smart to be this stupid, I can only assign such cognitive dissonance to complete dishonesty. That's par for the C-suite course, sadly enough.

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    1. I'm unconvinced that Dow has ever been averse to the government offering them a helping hand. I'd like to think that the C-suite is full of anarchocapitalists, but I've yet to see that be the case.

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