Cuts to DuPont's research, business draw mixed reactions
Scholars, shareholders, the newly separated, and the long-frustrated have plenty to say about cuts to the central research and business units at DuPont Co. by new CEO Edward Breen. Some highlights:
Scholars, shareholders, the newly separated, and the long-frustrated have plenty to say about cuts to the central research and business units at DuPont Co. by new CEO Edward Breen. Some highlights:
"DuPont struggled with return on R&D over the years," notes Ben duPont, a shareholder and past manager at the chemical giant that bears his ancestor's name.
"For 40 years, like a drumbeat, every few years DuPont introduced a new blockbuster product - nylon, Teflon, Tyvek, Delrin, Kevlar, Lycra, Kapton, Neoprene, Mylar." (They weren't all blockbusters; duPont still has a pair of Corfam shoes - the Edsel of leather.)
"But the fact is, over several decades, that slowed down to a trickle," duPont added. "Can you name one of the same stature from the past 10 years?"
Last year, he sided with then-CEO Ellen Kullman against insurgent investor Nelson Peltz, of Trian Fund Management. But duPont doesn't blame investors for what's been cut from Wilmington since Breen replaced Kullman.
"Trian was the messenger, but the message started two decades ago," duPont told me. Hard-to-measure research, short-term thinking, reluctance to bet big, all seemed to feed sclerosis, he said.
Despite cuts to Central R&D, duPont notes that Breen's administration still does science in its business units - which, DuPont Co. spokesman Daniel Turner told me, accounted for most of its annual research expenditure of $2 billion last year.
"We need to get back to the drumbeat" of successful products, duPont concluded.
Veteran Philadelphia industrial scientist Peter Lantos tells me that many of DuPont's greatest products, later refined at the central Experimental Station on Brandywine Creek, were first discovered in an old business unit, Textile Fibers, at its Pioneering Research office in Buffalo.
Kevlar, Tyvek and Lycra "were not the products of the Central Research Department" but were first developed at the Pioneering lab, whose researchers mixed with colleagues in production units, and where chief Hale Charch "had an uncanny ability to pick winning projects. In fact, after his death [1958], that lab produced not one single new product," Lantos said.
Bob George, a 42-year DuPont veteran who is now a Chester County-based business consultant, says the cuts make it tough to repeat that success.
"When the Koch brothers bought DuPont's fibers business [in 2003], they didn't grow it," George says, but cut jobs and "milked" profits.
He says the new owners would rather pump millions into political campaigns to help keep their taxes low than pay researchers to find new products. Breen's cuts, he told the CEO in a letter, are another example of billionaires squeezing "middle-class" workers.
A consulting executive who was assigned to DuPont in the 2000s, and who spoke on the condition that I not identify him, says the company's uncoordinated IT helped force the sale.
Once a financial innovator, DuPont in the 2000s let departments adopt their own hard-to-coordinate systems, he said, instead of imposing one corporate system as Philadelphia rival Rohm & Haas did.
Breen's predecessor, Kullman, belatedly committed a billion dollars to a unified system, "One DuPont." Breen canceled it, as I reported in the fall, on the eve of the Dow Chemical merger. Dow runs a single system, which it acquired when it bought Rohm & Haas and will now presumably impose on DuPont.
The executive said DuPont's famous safety culture became a liability: Risk aversion is laudable in labs and factories, but deadly in management.
I've also heard from people who claim little concern about DuPont's fate, citing the many cases of industrial poisoning - from tetraethyl lead to PFOAs - that followed the miracles of DuPont science.
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