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. 

On earnings reports, DuPont, Dow to cut 4,000 jobs

After some optimistic comments, comes the reality of earnings season. From Chemistry World's Andrew Turley:

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.

Andrew Liveris: the gift that keeps giving

Andrew Liveris was interviewed on Marketplace yesterday, and he brought his trademark foot-in-mouth-ism with him. Here he is, identifying the dark matter problem in the universe:

Ryssdal: What do you do when the first thing that most people think of when Dow Chemical comes to mind is "oh man, whatever they make is probably toxic. It's chemicals, it's hydrocarbons -- holy geez, I don't want any of that stuff." 

Liveris: Yeah, it's a branding topic. So we've got to go out there and really re-educate humanity, because at the end of the day, 95 percent of all products out there have chemistry in them. 

As both Dr. Rubidium (~nsfw language) and See Arr Oh already said, what's the other 5%?!?

Of course, Liveris was trying to say that most, if not all, manufactured products use products from the chemical industry. But it would have been really nice if Mr. Liveris (a chemical engineer) would also have attempted to correct Ryssdal's suggested stereotype a little more forcefully. "I believe chemicals can be a force for good for humanity" or something equally cheesy might have helped. (Who knows, perhaps it ended up on the digital equivalent of the cutting room floor.)

While Mr. Liveris did not take the time to push his trademark "STEM degree holders get paid bazillions of dollars right out of school" baloney, he did try to steal second on jobs:

Ryssdal: And I'd be curious as to your perspective -- as a foreigner but one who has spent a lot of time in this country -- what your take is on the wailing and gnashing of teeth of the loss of American industry and manufacturing.

Liveris: The word manufacturing, you know, even the word industry just doesn't sit well. People think about it as a smokestack, environmental, yesterday's era; that everything should be services. Well last time I checked, you've gotta invent stuff, make stuff and sell stuff -- and then you'll service stuff. But if you don't do those first three things, who are you servicing? We really have to get our heads out of the notion that we can just be a service economy. 

The whole point I made from a Dow Chemical perspective is not only are we re-branding our company, but we're re-branding our industry. We're re-branding what science, technology, engineering, maths mean to this economy and how we can transfer that into American jobs for the next generation.

Boy, that sounds nice, doesn't it? (But what does it all mean, Basil?)

I'm pretty skeptical about Andrew Liveris' talk about American manufacturing jobs. It seems to me that he's consistently pushing for policies that will benefit his corporation without committing to siting manufacturing facilities in the United States. That is his prerogative as a CEO of a multinational corporation -- but don't try to dress it up in happy talk about "American jobs for the next generation."

Andrew Liveris is either confused or fibbing about salaries

Courtesy of the excellent (and mysterious!) @jfreebo comes the spectacle of Andrew Liveris telling a group of people at University of Pennsylvania that (starting at 1:01:00):

Starting salary of a chemical engineer today is? 120 [thousand] That's shortage. Last time I checked that's a good market, guys. You know? Demand's high, supply is short. 

Contrast that with AICHE's blog, where the median starting salary of a B.S. chemical engineer (via Payscale.com) is [drumroll!] around $65k. AICHE's 2011 salary survey (unlinked to respect member exclusivity -- you can Google it) confirms that range. What's the median overall salary for AICHE's 2011 salary survey? $110,000.

There are four possible explanations:

• Dow is paying their starting chemical engineers $120,000 and Liveris is reporting the truth. 
• Dow is paying really good for the industry right now, and are handing out significant bonuses, which Liveris is conflating with salaries. 
• Andrew Liveris is confusing median and starting salaries. 
• Andrew Liveris is intentionally lying about chemical engineer starting salaries.

I would really like to know which one of those is true. Readers?

UPDATE: 88% (y/y) inflation hits Andrew Liveris' mouth. From a July 2011 CBS news report:

But Liveris, whose company employs 24,000 people in the U.S. alone, says he can't get enough good workers here. "The starting salary of a chemical engineer is $85,000," he said. "And I can't get chemical engineers."

I think Mr. Liveris needs to go on the gold standard.

UPDATE 2: Anon1125a says:

Glassdoor.com screenshot for Dow Chemical

According to Glassdoor.com, 120 K is at the high end of the senior engineer pay scale at Dow. Senior chemists and senior engineers are early career PhD's, mostly recent hires. In principle, Mr. Liveris is not necessarily fibbing, he just neglected to mention that the qualifications for that salary are a PhD, a stellar job talk and interview, and the candidate would probably have a number of offers from competing companies. 

I know a newly minted chemistry PhD that just landed a senior chemist position at Dow starting at 95 K. I've always heard that engineers made about 20% more than chemists, so it appears consistent. In any event, I wouldn't mind getting a foot in the door at Dow. 

Andrew Liveris, at it again

Our favorite chemical company CEO, Dow's Andrew Liveris, is at it again, claiming shortage. Via Bloomberg:

The U.S. needs to train more people to work with technology through vocational schools and doctorate programs if it’s to reclaim its leadership in manufacturing, Dow Chemical Co. Chief Executive Officer Andrew Liveris said. “This is the one that keeps me up at night: The human talent issue that built this country and rebuilding it so that the American manufacturing base can truly move to advanced technologies,” Liveris said yesterday in an interview at Bloomberg’s New York headquarters. 

Dow, the largest U.S. chemicals producer, last year pledged grants totaling $250 million to 25 chemical-engineering schools, including 15 in the U.S., to educate more scientists who can develop new materials. The Midland, Michigan-based maker of chlorine, epoxy resins and linear low-density polyethylene plastic, is having trouble hiring qualified people to work in its research labs and factories, Liveris said. 

“We are behind in that strategy compared with other nation states,” Liveris said. “We need Ph.D.s and scientists and chemical engineers, materials engineers.”

Liveris, 57, said next week he will be in Singapore and China, which are better at educating their citizens to work in high-technology manufacturing fields. “China had two foreign labs in 1990 and by 2010 it had 900, including one of ours,” he said. “They have a deliberate national strategy to attract companies like mine” that have intellectual property.  

Investing in technology education doesn’t guarantee students will study in that field, Liveris said. The president’s manufacturing panel also will recommend a national outreach program to encourage students to attend vocational schools or pursue engineering degrees, he said.
“We have to change the national psychology,” Liveris said. “Losing competitive advantage in polymer science, materials science, and then ultimately biological science, we should care about that.”

Well, let's go over to dow.com and look to see how many openings they have for relevant search terms:

Total North American job openings: 129
"Scientist": 5
"Chemist": 27 (only 4 of which I find to be actual chemist jobs)
"Polymer": 5
"Engineer": 80

It looks to me as if Dow does indeed have a need for engineers (more evidence for the "STEM is TE" theory"), but I'm pretty skeptical about Dow's need for more scientists. If they do, they have a funny way of showing it. Liveris is fibbing again.