Dow gets good marks for corporate citizenship
The Dow Chemical Co., which has drawn fire for controversies including napalm used in Vietnam and polluted run-off from its own Michigan headquarters, still gets high marks in many quarters for its corporate citizenship.
So business leaders in Philadelphia say they are optimistic that Dow's purchase of local corporate icon Rohm & Haas Co. bodes well for this region.
"We're told that Dow is an engaged corporate citizen wherever they have a presence. This suggests that they will become a part of the corporate leadership here," said Mark S. Schweiker, the former governor who is president of the Greater Philadelphia Chamber of Commerce.
Raj L. Gupta, chairman and chief executive of Rohm & Haas, "has been heavily involved - he's been a leader in the CEO Council for Growth," Schweiker added, "Every indication so far is that what we've enjoyed to date will not change."
Dow touts corporate citizenship on its Web site, where it displays a quotation about the company from its chairman and CEO, Andrew Liveris: "Sustainability begins at home, but its destiny is to engage the world's most pressing problems. We will build on our company's rich legacy of leadership with a spirit of fearless accountability, not just for our own footprint on the planet, but the collective footprint we make as part of the human family."
Dow is a global giant, with $54 billion in annual sales and 46,000 employees worldwide. Experts say they believe it will nurture rather than change Rohm & Haas.
"Dow is a standard smokestack company, a producer of commodity chemicals. Rohm & Haas is a more profitable producer of specialty chemicals," said Michael Gombola, head of the finance department and an expert on mergers and acquisitions at Drexel University's LeBow School of Business.
"I wouldn't be too surprised if Dow [gives] Rohm & Haas a long leash," Gombola said. "Specialty companies tend to be more high-tech, a little less bureaucratic, more entrepreneurial and open. I don't think Dow wants them to be less high-tech and more like smokestack company. I think they will want them to stay innovative."
Aside from a boost in profits, he said, Dow may hope the purchase "brings new blood" to its management.
Indeed, Dow this week said it has tapped Rohm & Haas' current chief operating officer, Pierre Brondeau, to head its restructured specialty-chemical business, which will be based in Philadelphia under the Rohm & Haas name.
Two current directors of Rohm & Haas will also join Dow's board.
Environmental groups such as Greenpeace remain critical of the company, complaining among other things about its role in the still-lingering aftermath of the 1984 Bhopal chemical plant disaster in India, which killed 11,000 during the first two weeks and caused diseases linked to thousands more deaths. The Bhopal plant was owned by Union Carbide, which Dow acquired in 2001, 17 years after the accident.
More recently, the U.S. Environmental Protection Agency said Dow had agreed to clean up soil and homes along the Lower Tittabawassee River in Saginaw, Mich., that were contaminated by waste flowing downstream from the company's Midland manufacturing site. Dow still faces a class-action lawsuit by 2,000 homeowners who live along the river.
Worldwide, Dow says it is engaged in "a community relations assessment" to size up and work with local residents to improve its impact on communities where it operates.
Its Web site describes initiatives to enhance education, as well as programs and awards to encourage employees to volunteer in their communities. "The idea," the company says, "is to make a community a better place to live and work because Dow and Dow employees are there."
Dow has not made any major acquisitions recently by which to judge its track record on treating new communities under its fold. Its last was the 2001 purchase of London-based specialty-chemical maker Ascot P.L.C.
The 111-year-old Michigan-based company also says it promotes improved working conditions, citing a significant reduction in employee and contractor injuries and illnesses.
The chemical industry has been hit hard by skyrocketing crude oil prices. Philadelphia's Sunoco Inc., citing raw material costs and other issues, is looking for a joint-venture partner for its chemical unit.
Dow's purchase of Rohm & Haas was financed in part by legendary investor Warren Buffett, giving some optimism for the long-term strength of Philadelphia's newest corporate citizen.
"That he expects growth is interesting," said Gombola, the Drexel professor. "I'm not sure why, because chemical companies are being squeezed by input [crude oil] price. But he takes a very long view - five to 10 years. He's been successful in past."
Contact staff writer Henry J. Holcomb at 215-854-2614 or hholcomb@phillynews.com.
Contact staff writer Henry J. Holcomb at 215-854-2614 or hholcomb@phillynews.com.


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