Interim DuPont CEO promises more cuts
Ellen Kullman is stepping down Oct. 16 as chairman and chief executive of DuPont Co., the Wilmington pesticide and chemical giant, as the company warned its profits are falling amid weak farm chemical sales.
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Ellen Kullman is stepping down Oct. 16 as chairman and chief executive of DuPont Co., the Wilmington pesticide and chemical giant, as the company warned its profits are falling amid weak farm chemical sales.
Edward Breen, a longtime New Hope resident who broke Tyco International into several companies, will take over as DuPont's interim chairman and CEO, the company said. DuPont also hired an executive search firm to find a permanent replacement.
Kullman, 59, is leaving as DuPont said it won't make as much money as it expected in the current quarter, and has made plans to accelerate and expand previous cost-cutting proposals.
Kullman and her allies narrowly beat back a rival board led by billionaire investor Nelson Peltz in a contested board election this spring. Peltz supported expanded cost cuts, including research and development projects that can't easily be tied to profits, and urged the board to consider splitting the company into smaller units.
In her statement, Kullman sought to paint her departure as a triumph, saying the company has been successfully reorganized after the spin-offs of its Axalta (auto paint) and Chemours (titanium dioxide pigments) units, and "now is the right time for a new leader to continue to drive the pace of change."
"She's a good corporate person, but it's too cyclical a business," depending too much on commodity prices and pesticide spending, said Robert Costello, who owns Costello Asset Management in Huntingdon Valley.
Costello owns a small portion of DuPont shares after selling its Chemours stock "immediately" following that firm's spin-off this year, avoiding its subsequent 60 percent decline. "They're getting hurt in the agricultural business; they're getting hurt on chemicals. There's nothing really working," Costello added. "It's not just them."
As CEO of Tyco International, Breen broke that company into several independent parts after failing to boost the share price in the 2000s. He's also former CEO of Motorola and of Horsham-based General Instruments, and current co-owner of the Reeds at Shelter Haven, a boutique hotel in Stone Harbor.
Breen joined the DuPont board earlier this year as part of Kullman's response to criticism that her board was insular and was failing to demand more profits.
"Looking ahead, we will continue to drive productivity, and we plan to conduct a deep dive into the details of our cost structure and allocation of capital to ensure we deliver appropriate returns for shareholders," Breen said in a statement sure to chill any DuPonters who thought previous rounds of cost cutting had already left the company lean.
DuPont cut yearly per-share profit targets to $2.75, from a previous $3.10, blaming the strong U.S. dollar and weak foreign pesticide markets.
DuPont also said it will speed up cost cuts "to achieve $1.3 billion of savings" in 2016, instead of 2017, and will cut an additional $300 million in 2017. DuPont will put out third-quarter results Oct. 27.
Its stock closed Monday at $51.28, up $2.02 or four percent.
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