Was DuPont Co. interested in buying Rohm & Haas Co.?

It was at one time, according to an interview with former Rohm & Haas chairman and CEO Raj L. Gupta in the latest issue of Directors & Boards magazine.

Gupta told the Philadelphia-based trade publication that Dow Chemical Co., BASF and DuPont each had “told us over the past 10 years that they were doing their homework on us and would be ready if ever there was an opportunity.”

Gupta said he told the CEOs of all three chemical companies at an industry conference in California in June 2008 that Rohm & Haas’ board “might be interested in looking at options.”

BASF and Dow would go on to make bids, but not DuPont. “DuPont had begun moving in a different direction with its strategy,” Gupta said in the interview with the publication’s editor, James Kristie, and chairman, Robert Rock.

Dow outbid BASF with a $78 per share offer that was announced nearly a month later. Rohm & Haas shares were trading at $55. Then, the global economic slowdown walloped the chemical industry. By year’s end, that price looked too rich. Dow wanted out, but Rohm & Haas sought to force Dow to complete the deal.

After some legal jousting, the $15.3 billion deal closed on April 1. “Clearly it was a home run for the shareholders. From the point of view of the employees it’s obviously been painful,” Gupta said.

By that, he means the layoffs and plant closings announced by Dow, including its factory in Philadelphia’s Bridesburg section, where the last 25 employees will lose their jobs by mid-2010.

But in the interview, he makes it clear that cuts would have been inevitable - deal or no deal.

“Given the economic environment we were facing, we would have had to go through a major downsizing and restructuring on our own at Rohm & Haas,” he said.

Earnings

Tuesday: DuPont, Pfizer;

Wednesday: Air Products & Chemicals, Boeing, Exelon, SEI Investments;

Thursday: Hershey, Merck;

Friday: CSS Industries.

Everyone expected September would be clunker for auto sales, and the numbers coming out today show that everyone was right.

General Motors' sales were down 45 percent in September compared with the same month in 2008. Chrysler was down 42 percent, while Ford Motor was down only 5 percent.

Locally, Cherry Hill-based Subaru of America Inc. eked out a 0.7 percent rise in September sales. The Japanese automaker is tiny next to the Detroit Three. (Subaru sold 14,593 vehicles last month.)

South Korea's Hyundai was another automaker with a rare increase, with September sales up 27 percent compared with last year.

Subaru did experience a big 50 percent decrease in sales between August, when the federal "cash for clunkers" program was humming, and September. (Subaru sold 28,683 units in August.)

Sales for the first nine months of 2009 for Subaru remain 10 percent ahead of where they were in 2008. So far, it has sold 158,421 of its all-wheel drive vehicles this year.

Philadelphia is trying hard to attract a South Korean electric-car maker.

Representatives of CT&T Co. Ltd. met with Mayor Nutter last week in an effort to bring a “regional assembly and sales” operation to Philadelphia, said Curt Westlake, the company’s senior director of marketing.

In essence, it would be a final-assembly operation with a retail location where people could buy the electric car called the eZone. Founded in 2002, CT&T now makes its vehicles in South Korea. But its plan to expand in the United States calls for the company to establish RAS sites around the nation.

So far, it has set up joint ventures to do so in Greenville, S.C., and Riverside, Calif., Westlake said. The typical RAS will employ 90 to 125 people.

CT&T intends to make its U.S.-market cars entirely in this country within 18 to 24 months. To do so, it will set up a central manufacturing location to make frames and other key parts, Westlake said. States in the running for that factory are South Carolina, Georgia, California and Alabama. The decision time for that is in the next 30 days, he said.

Though we’ve heard a lot of hype about various plans for electric vehicles, CT&T fully hopes to be selling its first eZones in the United States before year’s end, Westlake said.

However, the company has a bit of a problem. Right now, it can’t import anything that can go faster than 25 m.p.h., he said. Then, there is the matter of where consumers can drive what is considered a “neighborhood electric vehicle” or “low-speed vehicle” with a range of 70 miles. Some states don’t permit them on the road. Others allow them only on streets with posted speeds as high as 35 m.p.h.

That could make some commutes tricky, but not impossible, said Westlake, who said he’s able to do about 80 percent of his errands driving a two-passenger eZone around Greenville.

The eZone looks like a cousin of Daimler’s Smart Fortwo. With a retail price projected to be under $15,000, the eZone would be comparable to the gasoline-fueled Fortwo, which has a manufacturer’s suggested retail price starting from $11,990.

Westlake said CT&T will be showing off its cars at events associated with the Group of 20 Summit in Pittsburgh later this week at the invitation of Gov. Rendell.

This had been the week that the Mayor’s Task Force on Tax Policy & Economic Competitiveness was originally due to provide its recommendations on how to improve the business climate in Philadelphia.

However, Mayor Nutter has given the 17-member group an extension to Oct. 15. (Will Pennsylvania and Philadelphia have their budgets settled by then?)

But if you just can’t wait to read a report that tells city officials what they should do, but have lacked the will to pursue in the past, I recommend the Committee of Seventy’s “Tackling True Reform” report.

While the watchdog group certainly hopes that its call to pursue innovative policies inspires public officials to act, I found the examples of bureaucratic inertia and political muscle-flexing providing new reasons for businesses to think twice about locating in the city.

The report really is a challenge to Nutter to wield the reformer’s sword he flashed so effectively during his campaign.

The mayor still seems to receive enthusiastic applause when he drops in on business events. But, as the Committee of Seventy writes, Philadelphia is “no more business-friendly than it was during the years when John Street - who was often perceived as being anti-business - was mayor.”

Steel Yourself

Concord Steel Inc. has closed its factory in Essington, Delaware County.

The company had announced a layoff there earlier this year, but its business, which specialized in making steel counterweights, was walloped by a drop-off in orders from customers in the infrastructure, construction and residential sectors.

Warren, Ohio-based Concord filed for bankruptcy under Chapter 11 on Monday. The move came after the manufacturer had gutted its workforce companywide by 75 percent over the last 18 months, cut salaries, and tried to modify its credit agreement.

Concord, which was bought by Stamford Industrial Group Inc. for $45.2 million in October 2006, said it eliminated 93 jobs by closing the Essington factory at the end of August and making permanent previously temporary layoffs at its plants in Ohio and Illinois.

Everything about Boeing Co. is big.

Revenues for the Chicago-based company in 2008 topped $60 billion. Its global workforce is more than 150,000 people. And if you drive along I-95 in Delaware County, the Boeing Rotorcraft complex sprawls over 364 acres between the highway and the Delaware River.

Standing on the factory floor inside a massive U-shaped building yesterday, I marveled at the Chinook assembly line. The tandem-rotor helicopter is big, but even a row of the new F class models was dwarfed by the soaring structure.

Boeing’s CH-47 assembly line inhabits an 80-year-old building once used by the defunct Baldwin Locomotive Works, which built even more massive machines along the river’s edge. The Chinook has been rolling out of the same factory since 1961, and now Boeing intends to modernize the building.

In all, Boeing management has proposed spending $130 million over two years to enable the factory to produce five Chinooks a month, compared with three now, said Obie B. Jones, site manager for the local operations.

These are good days for Boeing’s rotorcraft business with record orders in 2008, when it landed a $4.3 billion U.S. Army contract for 191 CH-47F Chinooks. Last month, Boeing got a $1.15 billion contract from Canada for 15 Chinooks. In May, Boeing and AgustaWestland reached a $1.23 billion deal to make 16 Chinooks for the Italian Army.

But mindful that Defense Secretary Robert Gates is trying to change how the Pentagon buys weapons, Boeing Rotorcraft Systems general manager Philip J. Dunford said none of the 5,200 local employees should feel complacent. After all, it’s not guaranteed business. “They can always take the money away,” he said.

As busy as the global helicopter industry is, Dunford said, the signs point to a drop-off in orders in 2018. No one seems to have the next big thing, although they’re trying with heavy-lifting dirigibles and unmanned reconnaissance craft.

Perhaps, Dunford speculated, the big thing will be a substantial improvement in reliability for helicopters, which require more downtime than fixed-wing aircraft.

Or maybe the next big thing will resemble the last - the enduring Chinook.

Last week, a Washington think tank made the case that boosting manufacturing is crucial to U.S. economic growth and used the Pittsburgh area as the example of a region that’s done so.

Yesterday, London-based Johnson Matthey P.L.C. said it has opened a new factory to make emissions-control catalysts in Fayette County, one of the seven counties that comprise the Pittsburgh metropolitan statistical area.

Johnson Matthey’s North American headquarters are in Wayne, and it employs more than 600 people in its emissions-control operations in Chester County.

Since this new $43 million factory near Smithfield will make catalysts to cut diesel-engine emissions, I suppose we can add 110 more jobs to the state’s burgeoning “green-collar” sector.

But make no mistake: The state still needs to spend the green to get green jobs. The Rendell administration provided $3.5 million in loans, grants and job-training funds to attract the factory, which is located in a low-tax Keystone Opportunity Zone.

Net cash, please

Alesco Financial Inc., a Philadelphia company that invested in mortgage-backed securities and other debt instruments, had its business strategy derailed by the financial crisis.

So even though it turned a profit of $374 million for its quarter ended June 30, Alesco isn’t trumpeting a revival.

In fact, chief financial officer John J. Longino cautioned during a conference call that such “GAAP income-statement amounts bear little to no correlation to Alesco’s actual economic results for the quarter.”

What does? Net cash from investments, he said. That was $5.1 million in the second quarter, down from $6.6 million in the first quarter.

Quotable

I do want to say that the banks are not being very cooperative in this marketplace, as I’m sure many of you as investors and business owners know. We’ve seen them turn down deals even with 30 and 35 percent down payments.

- Dennis Raefield, CEO of Mace Security International, on a conference call Tuesday talking about the Horsham company’s efforts to sell its 12 remaining car washes.
 

Dietz & Watson Inc. has a beef with Boar’s Head Provision Co., its larger competitor.

A Philadelphia maker of deli meats and cheeses, Dietz & Watson is casting itself as the defender of consumer choice in calling on its Florida rival to end its practice of demanding exclusivity to sell in supermarket delis.

Dietz & Watson and Boar’s Head duke it out in deli sections where store personnel slice to order. Given the “premium” nature of the brands, both charge a buck or two more per pound than a store’s private-label brand meats and cheeses.

But you won’t find Dietz & Watson and Boar’s Head side-by-side in that deli case.

Case in point: About a dozen Harris Teeter supermarkets in the Charlotte, N.C., area dropped Dietz & Watson products this spring in order to carry Boar’s Head. A couple of food-oriented blogs buzzed with customer comments praising or panning the switch.

Dietz & Watson president and CEO Louis Eni said the customer reaction to the Harris Teeter move spurred him to draw attention to Boar’s Head’s practice of insisting that grocers boot out other brands, including some pre-packaged products.

Shoppers lose when any product maker demands that a retailer carry only its line and no other, Eni said. Dietz & Watson has not and will not do that, he said.

But seeking exclusivity is Boar’s Head’s business model, according to Mark Lang, a food marketing lecturer at St. Joseph’s University. He saw it firsthand as a marketing executive at Publix Super Markets Inc. in Florida, where Boar’s Head has managed the 900-story chain’s deli cases for years.

Lang called Boar’s Head’s aggressive distribution network its “secret sauce.”

Most areas of a supermarket are self-service. Not the deli or bakery, where customers must ask interact with employees to get the cold cuts or birthday cakes they want.

A well-run deli should be a profit center, Lang said. But we’ve all encountered delis that aren’t well-run. Boar’s Head’s distributors are the best at whipping a deli into shape, even training the store’s own staff, Lang said.

I called Boar’s Head’s corporate offices in Sarasota, Fla., seeking comment. With the spokeswoman on vacation, I asked to speak with someone in management about its practices. No one called back.

Dietz & Watson calls itself the No. 2 deli brand, which is quite possible but with the biggest players all privately held it’s hard to get independent confirmation. Eni would say only that Dietz & Watson has annual sales of more than $300 million, having grown at a double-digit pace for several years in a row.

Boar’s Head and Dietz & Watson have much in common. Frank Brunckhorst started making Boar’s Head cooked hams in Brooklyn in 1933, while Gottlieb Dietz began making deli meats in 1939. Both have expanded beyond their regional strongholds in recent years.

Boar’s Head is available through the U.S. with Dietz & Watson sold in more than 40 states.

Eni insists Dietz & Watson is making more inroads than it is losing. It recently began distributing products to Meijer, a Grand Rapids, Mich.-based chain of 189 stores in the Midwest. Costco Wholesale warehouse clubs is another new client.

Why doesn’t Dietz & Watson fight back with its own exclusivity arrangements? Eni said he thinks that it's unfair to customers to limit their choices.

When it comes to grocery stores, consumers have a lot of choice. And supermarkets have been known to relent when enough customers demand the return of a product.

By the end of this month, the Department of Energy is expected to award up to $2 billion in grants to encourage the manufacture of lithium-ion batteries on U.S. soil.

Right now, Asia dominates production of the batteries that go into consumer products such as laptops, cell phones and camcorders. But lithium-ion batteries are key to the development of hybrid, plug-in hybrid and electric vehicles, so U.S. authorities have grown concerned that where battery manufacturing goes, so goes the future auto industry.

The smell of hundreds of millions of dollars attracted 165 applications from companies and at least one industry consortium that claim to have shovel-ready projects to bring to life the federal Electric Drive Vehicle Battery and Component Manufacturing Initiative. (Rolls right off the tongue, doesn’t it?)

International Battery Inc., based in the Allentown area, applied for $100 million to expand its 80,000-square-foot factory, where it employs 55 people who make large-format lithium-ion batteries.

Ener1 Inc. is seeking a $480 million loan to increase manufacturing capacity at its factory near Indianapolis that it acquired from Delphi Corp.

Last week, Quallion L.L.C. said it had picked Palmdale, Calif., for a new battery manfacturing factory - as long as it wins a grant from the Energy Department.

But one of the more intriguing applicants is the National Alliance for Advanced Transportation Batteries, which is seeking a $342 million grant to build a 1 million-square-foot plant in Kentucky to manufacture four different formats of lithium-ion battery cells.

Sanjay L. Deshpande, president of the nonprofit cooperative that calls itself NAATBatt, said the group consists of more than 50 companies, including several in the Philadelphia area. Members paid a $10,000 fee to start NAATBatt last December.

Local members are battery makers C&D Technologies Inc., of Blue Bell; EnerSys, of Reading; East Penn Manufacturing Co. Inc., of Lyon Station; and Lithium Technology Corp., of Plymouth Meeting. (Colorado-based Porous Power Technologies, which has operations in Plymouth Meeting, and International Battery are members, too.)

Philadelphia-based FMC Corp. and Radnor-based Airgas Inc., which supply raw materials to the battery industry, are also NAATBatt members.

Based in Kentucky’s “Auto Alley,” the plant would specialize in manufacturing cells on behalf of its members. Deshpande said organizers liken their effort to Sematech, formed by the U.S. semiconductor industry with grants from the federal government in the ’80s in response to the growing concentration of chip manufacturing in Asia.

The big difference is that where Sematech is R&D-driven, NAATBatt is manufacturing-driven. Deshpande said the U.S. semiconductor industry in the ’80s had giants such as IBM, Intel and Texas Instruments with huge manufacturing capabilities. Everything about the U.S. lithium-ion battery industry is small, he said.

But the goals of the two organizations are same: keep key capabilities and expertise in the United States.

No one company will control NAATBatt, said Deshpande, who is an executive with EnerSys. Any “profits” made by the factory would be either reinvested or rebated to members through lower prices for the cells they buy.

If the Energy Department does award a grant to NAATBatt, construction could start by Oct. 1 with the first batteries ready for shipping by the end of 2010, according to Deshpande. Plans call for 2,000 people working there within four years.

At the end of 10 years, the Department of Energy would have the right to sell the factory to a third party or through an initial public offering, splitting the proceeds with Kentucky, Deshpande said.

NAATBatt has come up with an interesting approach, but the question remains: A decade from now, will Kentucky be able to compete with China, Taiwan and South Korea?

The former chief financial officer of Rohm & Haas Co. has been hired as CFO of Bacardi Ltd. , the privately held maker of rum and other liquor.

Jacques Croisetiere, 55, will join the Bermuda-based company Aug. 3. He succeeds Ralph Morera, who is retiring.

Croisetiere had been at Philadelphia's Rohm & Haas for 10 years, serving as CFO since 2003. He was one of three executives that formed the "Chairman's Committee" at the specialty chemical maker, which was acquired earlier this year by Dow Chemical Co.

(The others on that committee were former Rohm & Haas CEO Raj Gupta and Pierre R. Brondeau, who is currently president and CEO of Dow's Advanced Materials Division, which consists mostly of the Rohm & Haas operations.)

Bacardi said that Croisetiere's appointment will become effective at its July 9th annual general meeting.

And yes, this means that Croisetiere will be based in Bacardi's headquarters in Hamilton, Bermuda. Think he'll miss Philadelphia winters?