DuPont spin-off Chemours to stay in Wilmington
Chemours, the chemical maker spun off by DuPont last year with some of that company's dirtiest industrial plants, has decided to stay put in Wilmington.
Chemours
, the chemical maker spun off by
DuPont
last year with some of that company's dirtiest industrial plants, has decided to stay put in Wilmington.
CEO Mark Vergnano cited the corporate-tax reductions passed by the Democratic legislature and signed by Gov. Jack Markell in the "Delaware Competes Act" as a reason not to move to New Jersey or Pennsylvania.
"This legislation isn't about Chemours specifically," Markell spokeswoman Courtney McGregor told me.
As DuPont fragments, the state has stepped up efforts to keep not just Chemours but also two other planned DuPont successor companies from fleeing, the way paint-making spin-off Axalta moved its headquarters to Philadelphia two years ago.
Delaware used to tax business operations: The more you had, the more you paid. Now, it just taxes companies' sales in Delaware, which is supposed to make it more competitive with its neighbors.
The state, which is home to about as many people as Montgomery County, figures that these tax cuts will shave about $8 million from tax collections this fiscal year, $18 million next year, $23 million the year after. That still leaves "more jobs and more economic activity than if they had left," McGregor told me.
The cash-strapped city of Wilmington and New Castle County also have agreed to tax breaks benefitting Chemours, which employs about 1,000 in Delaware after closing its Edgemoor, Del., plant last year.
How valuable is the prize? DuPont has made plans to cut more workers than Chemours employs as part of its ongoing reorganization and merger with Dow Chemical Co.
How long will Chemours be around? With investors concerned about its cyclical world markets, pollution liability claims, debt levels, and retiree pension funding, the company's shares fell from $20, when it started trading as an independent company last year, to as low as $3 in January, before recovering to the $9-to-$10 range last month. Analysts expect it may be acquired by a larger chemical maker, or by private-equity investors as Axalta was.
While promising to stay in Wilmington, Chemours has not yet committed to remain in the block-long former Rodney Square headquarters where DuPont was based for nearly 100 years before consolidating in the suburbs last year.
It's not all bad news in the city that calls itself the "nation's corporate capital." Incyte Corp., the cancer-therapy developer founded by three former DuPont-Merck Pharmaceutical executives, has been profitable and growing. JPMorgan Chase & Co. employs 9,000 in Wilmington-area back offices.
The state's efforts to replace its vanished auto and steel plants have had limited success. SevOne, the "infrastructure digital management" company that opened an office employing 230 at the former Chrysler plant site in Newark, Del., last year, has started its second round of mass layoffs since last fall, the Wilmington News-Journal reports.
SevOne, which counted Comcast, Lockheed Martin and Russia's Sberbank among major clients, grew rapidly after raising $200 million in 2013-14 from investors led by Bain Capital, even as founder Vess Bakalov moved his headquarters from Delaware to Boston, Bain's hometown.
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