"Approximately 1,700 Delaware-based positions will be eliminated in the beginning of the year," DuPont CEO Edward Breen told employees in a note this morning. That's 28% of DuPont's 6,100 jobs in the company's home state, mostly in labs and offices in the Wilmington and Newark areas along I-95.
The cuts are part of DuPont's planned $700 million in expense reductions in advance of its proposed merger with Dow Chemical Co. -- which will mean more cuts. Breen and Dow boss Andrew Liveris plan to combine their companies and then break them into three independent business groups.
In a statement, Del. Gov. Jack Markell called Breen's decision "deeply disappointing" but also pledged his government will do "all that we can to promote" DuPont's remaining locally-based businesses, which make products like Kevlar bulletproofing and Tyvek insulation. -- Breen said in his note that he and DuPont's board had considered other actions but in the end their decision was "unanimous." Excerpts:
"The effect in Delaware will be significant, reflecting the ugent need to restructure our cost base and, as part of that effort, reduce our corporate overhead costs so we can remain competitive...
"Given that we are in the middle of the holidays, we would have preferred to wait... (But) we are legally required to file a notice...
"We fortunately are able to announce that the corporate headquarters for the combined, post-merger Specialty Products business will remain in Delaware."
Specialty Products includes all of today's DuPont except (1) DuPont's pesticide and seed businesses, which are being combined with Dow's ag units; and (2) DuPont's performance-materials businesses, which will be added to Dow's materials businesses and based at Dow HQ in Midland, Mich.
The remaining DuPont units in Specialty Products include Nutrition & Health, Industrial Biosciences, Safety and Protection, and Electronics & Communications, plus Dow's Electroncis Materials unit. Dow's and DuPont's electronics businesses "create a new global leader in Electronics Products," with attractive products like Organic Light-Emitting Diodes (OLEDs).
Breen says the electronics businesses will attract new investments and sales. Some observers expect Breen may eventually sell electronics and other Specialty Products businesses in a second break-up.
"DuPont has evolved many times over the past two centuries," Breen concluded. "Each business will be able to create the value-added solutions its customers expect through targeted, highly productive investments in science and R&D."
In a separate memo obtained from DuPont employees, Breen told Specialty Products workers their shrunken company "will become a new industry leader focused on attractive markets where our innovation and science will give us a clear advantage." Revenues will total around $13 billion, about half the new ag company's and one-quarter of the Dow-based materials company.