BUSINESS
DUPONTWILL SHEDJOBS Number two chemical maker will eliminate 3,500 positions this year
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N A ROLLER-COASTER WEEK,
DuPont announced that it is cutting 3,500 jobs—6% of its total workforce—by the end of the year as part of its previously announced $900 million costcutting program. It also agreed to take on some $150 million in liabilities related to an antitrust investigation involving its DuPont Dow Elastomers joint venture with Dow Chemical. Despite the bad news, DuPont upgraded its 2004 earnings forecast. Due to a recovering economy and particular strength in its agriculture and nutrition business, the company says its earnings for the first quarter—excluding 16 cents per share in extraordinary items—will be 95 cents per share, well above the 65 to 75 cents it expected inJanuary What's more, DuPont says the head-count reduction will generate savings of $325 million annually by the end of 2005, half of which will occur this year. The workforce reductions exclude 18,000 jobs in DuPont's Invistafibersbusiness, which will be sold to Koch Industries at the end of this month for $4.2 bilAIR
lion. But CEO Charles O. Hollidayjr. adds that DuPont will need to reduce corporate positions that were tied to thefibersunit. "These are difficult but necessary decisions as we align our resources with market needs and adjust the size of our infrastructure following the anticipated separation of Invista," he says. DuPont's operations in North America will see about 70% of the layoffs; most of the rest will occur in Europe. The company will shed 650 jobs in Delaware alone. In addition, 450 contractor positions will be eliminated. DuPont is revamping four manufacturing plants in North America. It is ending dimethyl terephthalate production in Old Hickory, Tenn., and exiting the merchant DMT business. Some 125 employees will be laid off there byJuly The company is closing its spandexfibersplant in Maitland, Ontario, next month. That closure, plus other restructuring, will result in 200 DuPont layoffs in Canada. Restructuring inTowanda, Pa., will result in 30 layoffs by the end of April. And DuPont is
closing Liqui-Box container lines in Worthington, Ohio, resulting in 15 lost jobs. In addition to the job cuts, DuPont says it will save $375 million annually by 2005 through cost reductions in areas like contract services, procurement, telecommunications, and information technology The company plans to save an additional $200 million through improved manufacturing efficiency Separately DuPont will take the lead in dealing with an ongoing antitrust investigation of DuPont Dow Elastomers in synthetic rubber. DuPont says it will fund liabilities in the investigation up to $150 million and will pay 75% of penalties over that amount. DuPont is taking a first-quarter charge of $150 million to cover potential liabilities. Dow now has an option to pull chlorine and ethylene elastomers out of the venture in a cashless deal. IfDow does exercise this option, DuPont will buy out DoVs equity interest.—ALEX TULL0
POLLUTION
EPA Issues New Rule On Ozone
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Clean Air Act rule unveiled last week may mean that some chemical plants will have to curtail their emissions. It may also limit the ability of facilities to expand or make operational changes that increase emissions. EPA's April 15 rule says that about 100 urban areas, including 474 counties, are nonattainment areas, meaning that they fail to meet the nation's air quality standard for ground-level ozone. That standard, which defines how much ozone is unhealthy, was set in 1997, but its implementation was delayed by legal challenges, it toughens a national ozone benchmark set in 1979 but gives areas more time to clean up their air. Under the new rule, nonattainment areas for the ozone standard will have to reduce emissions from existing sources
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before any new facilities or expansions can get air pollution permits. This will be particularly tough in metropolitan areas that for years have had strict emission standards under the 1979 ozone standard, says S. William Becker, executive director of groups representing state and local air pollution control officials. Environmental activists say the new rule gives communities far too much time to clean up their air. "The real beneficiaries," says Angela Ledford, director of Clear the Air, "are corporate polluters." The American Chemistry Council says implementation of the rule "should be made in a way that won't further exacerbate the nation's natural gas crisis."—CHERYL H0GUE
C & E N / APRIL 19, 2004
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