DuPont Co. shares traded modestly higher Tuesday as Edward Breen, an architect of the Dow-DuPont merger and breakup that has shrunk the Wilmington-based chemical giant while disappointing investors, said Tuesday that he will again take over as chief executive of the Delaware-based chemical company.
Breen replaces veteran DuPont executive Marc Doyle, who is leaving eight months after his promotion to the job, which took place at the same time asDuPont’s separation from the pesticide maker Corteva, after earlier splitting from the reorganized Dow Chemical Co.
Doyle’s departure followed a drop in sales and profits at the $21.5 billion (yearly revenues) company last year amid a worldwide manufacturing slowdown, and a flat share price that has failed to meet the board’s goals. DuPont has missed goals despite cost-cutting efforts since Breen was named DuPont CEO amid a 2015 shareholder rebellion, announced the Dow merger, and cut back central research and management.
“While we made some progress in 2019, we did not meet our own expectations and we now need to move aggressively to secure our foundation for growth,” Breen said in a statement.
Shares closed at $53.44, a rise of 34 cents or 0.64%.
“We have solid businesses," Breen wrote, but “need to accelerate operational improvement” and reach financial goals. He added, “I continue to have enormous confidence in this company and in our team.” Breen also said he’s leaving the board of Corteva, based across the parking lot from DuPont in offices outside Wilmington, to spend more time at DuPont.
Breen and Doyle had fielded investors’ questions together on Jan. 30 after announcing 2019 earnings. At that presentation, Doyle blamed soft sales on “the China tariff situation, which significantly challenged two of our key end markets, auto and electronics," while acknowledging the company was squeezed between higher material prices and weaker demand.
In the same conference call, Breen discussed the possible sale of DuPont’s electronics, which he said was worth far more than the level at which investors have been valuing it as part of DuPont.
Since separating last June from Corteva, DuPont has planned the spin-off of its largest remaining business group, food and drug additives, which is to be combined with International Flavors & Fragrances Inc.
DuPont is investing even as it consolidates. The company, which employs around 32,000 worldwide, has spent around $350 million over the past few years upgrading labs, offices and systems at its 40-building Experimental Station campus northwest of Wilmington, a three-mile drive from its headquarters offices. The complex is home base for about 1,550 of DuPont’s 3,500 area employees, plus around 500 contractors, and 400 tenants.
Breen, a New Hope resident, previously headed and broke up the former Tyco International, and served as lead outside director at Comcast. He was also a senior executive at the former General Instrument Corp. in Horsham when it was sold to Motorola.
Breen was already ”executive chairman” of the DuPont board and will now do both jobs.
Besides Doyle’s departure, Breen announced that chief financial officer Jeanmarie Desmond is also leaving the company, effective immediately.
She will be replaced by Lori D. Koch, vice president of investor relations and corporate financial planning and analysis. “Lori Koch will be a great partner in this effort. She has delivered consistently excellent results across a substantial career as a finance leader at DuPont and has significant knowledge of our businesses," Breen said.
In a statement, DuPont’s lead independent director, Alexander Cutler, said his fellow directors “made these leadership changes to accelerate operational performance improvement and to more directly tap Ed Breen’s significant management experience.”