By Frank Esposito, Plastics News
Economic hard times are prompting DuPont to eliminate 6500 jobs worldwide, and for Dow Chemical to cut "thousands" of contract workers in Texas, US.
DuPont, a major producer of nylon and other engineering resins, said in a news release that it would shed 2500 full-time employees and 4000 contractors. Most of the full-time cuts will come from businesses that support the motor vehicle and construction markets in the US and Western Europe, officials said.
For Dow, "thousands" of the 4000 contract workers that the firm employs in Freeport, Texas, will be let go, according to a 4 December report in the Galveston, Texas-based Daily News. Dow also has 4500 full-time employees in Freeport, some of whom will be asked to take vacations as production at the site drops to 35 percent, according to the report.
Dow officials could not be reached for comment. The Daily News report added that the production cut in Freeport - a major production centre for polyethylene, polypropylene and other plastics - will last from 15 Dec until at least 5 Jan.
Freeport is Dow's largest integrated site, with 75 production plants covering 5000 acres. More than 40 percent of all Dow products sold in the US are made in Freeport.
Plummeting global demand has sent the stock prices of both DuPont and Dow plunging in recent months. With each dropping about 45 percent since mid-September. DuPont's per-share stock price was above $45 in mid-September, but was under $24 in early trading on 4 December. Dow's per-share price was above $35 in mid-September, but was under $19 in early trading on 4 December.
The DuPont moves are expected to increase the firm's pretax earnings by $730m and reduce working capital by $1bn. The contractor cuts will be made by the end of the year, with additional cuts in that area possible in 2009. Further details of the cuts - including their impact on DuPont's plastic-related businesses - were not provided.
"We have taken immediate and aggressive actions to maximize cash flow by reducing cost, working capital and capital expenditures in responses to current market challenges," DuPont chairman and ceo Charles Holliday said in the release.