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?