Dow Chemical to shutter plants, slash 1,000 jobs
By Christopher Hinton, MarketWatch
Last update: 5:17 p.m. EST Dec. 4, 2007
NEW YORK (MarketWatch) -- Dow Chemical said Tuesday it would shut down a number of its global-wide operations, including an exit from its automotive sealer business and certain performance chemicals facilities, eliminating about 1,000 jobs.
The Midland, Mich.-based company said the move would result in a $500 million to $600 million charge in the current quarter, which includes severance and asset write-down costs. The strategy should save the company about $180 million a year once it's completed.
Last year Dow Chemical earned slightly more than $3.72 billion on sales of $49.1 billion.
"Today's announcement reflects our commitment to prune businesses that are not delivering appropriate value and tackle tasks more efficiently across the entire organization ... freeing up capital and resources that will be redirected toward value-creating growth opportunities," said Chief Executive Andrew N. Liveris in a statement.
Investors seemed unimpressed by the cost trimming, with shares off by 1.2%to close at $41.05. The stock is up almost 2% year to date, but has had a volatile run, changing hands in the range of $47.96 and $39.85 because of merger rumors.
Credit ratings provider Egan-Jones said the company remains a buyout candidate and a purchaser of Imperial Chemical Industries (UK:ICI: news, chart, profile) . Meanwhile Dow Chemical is purchasing shares in an effort to support its stock price.
DOW 42.74, +0.60, +1.4%) said it intends to exit its North America, Asia Pacific and Latin America automotive sealer business within the next nine to 18 months, and will explore "strategic options" for its related European operations.
The company also plans to pare back a research and development facility for its wholly-owned subsidiary Union Carbide in South Charleston, W.Va., resulting in the loss of about 200 jobs; as well as shutter the subsidiary's St. Charles, La., polypropylene plant because of high capital costs.
Dow's styrene plant in Camacari, Brazil, will also be shuttered because of escalating competition and weak industry fundamentals, and its facility for producing hydroxyethyl cellulose -- used as a thickener in lotions and creams -- in Aratu, Brazil.
Finally, Dow Chemical said it would write down its Petromont and Co., Limited Partnership, a joint venture producing plastic materials and resins, and close a fungicide plant in Lauterbourg, France. End of Story
Christopher Hinton is a reporter for MarketWatch based in New York.
Find thousands of Bilingual jobs at LatPro.com.
Last update: 5:17 p.m. EST Dec. 4, 2007
NEW YORK (MarketWatch) -- Dow Chemical said Tuesday it would shut down a number of its global-wide operations, including an exit from its automotive sealer business and certain performance chemicals facilities, eliminating about 1,000 jobs.
The Midland, Mich.-based company said the move would result in a $500 million to $600 million charge in the current quarter, which includes severance and asset write-down costs. The strategy should save the company about $180 million a year once it's completed.
Last year Dow Chemical earned slightly more than $3.72 billion on sales of $49.1 billion.
"Today's announcement reflects our commitment to prune businesses that are not delivering appropriate value and tackle tasks more efficiently across the entire organization ... freeing up capital and resources that will be redirected toward value-creating growth opportunities," said Chief Executive Andrew N. Liveris in a statement.
Investors seemed unimpressed by the cost trimming, with shares off by 1.2%to close at $41.05. The stock is up almost 2% year to date, but has had a volatile run, changing hands in the range of $47.96 and $39.85 because of merger rumors.
Credit ratings provider Egan-Jones said the company remains a buyout candidate and a purchaser of Imperial Chemical Industries (UK:ICI: news, chart, profile) . Meanwhile Dow Chemical is purchasing shares in an effort to support its stock price.
DOW 42.74, +0.60, +1.4%) said it intends to exit its North America, Asia Pacific and Latin America automotive sealer business within the next nine to 18 months, and will explore "strategic options" for its related European operations.
The company also plans to pare back a research and development facility for its wholly-owned subsidiary Union Carbide in South Charleston, W.Va., resulting in the loss of about 200 jobs; as well as shutter the subsidiary's St. Charles, La., polypropylene plant because of high capital costs.
Dow's styrene plant in Camacari, Brazil, will also be shuttered because of escalating competition and weak industry fundamentals, and its facility for producing hydroxyethyl cellulose -- used as a thickener in lotions and creams -- in Aratu, Brazil.
Finally, Dow Chemical said it would write down its Petromont and Co., Limited Partnership, a joint venture producing plastic materials and resins, and close a fungicide plant in Lauterbourg, France. End of Story
Christopher Hinton is a reporter for MarketWatch based in New York.
Find thousands of Bilingual jobs at LatPro.com.
Labels: Dow Chemical, layoffs
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