DuPont-Dow HQ in Delaware might not be a jobs winner for state
Battered by years of corporate departures, Delaware elected officials bragged as if they'd won the lottery when DuPont Co. and Dow Chemical Co. said the new corporation they are forming to sell pesticides and seeds will have world headquarters not at its Iowa-based crop seeds group, nor at Dow's Indianapolis pesticides business, but at DuPont's Chestnut Run office complex near Wilmington.
Battered by years of corporate departures, Delaware elected officials bragged as if they'd won the lottery when DuPont Co. and Dow Chemical Co. said the new corporation they are forming to sell pesticides and seeds will have world headquarters not at its Iowa-based crop seeds group, nor at Dow's Indianapolis pesticides business, but at DuPont's Chestnut Run office complex near Wilmington.
Yet it's not clear this will add any Delaware jobs. DuPont and Dow plan more cost cuts in advance of their merger later this year.
DuPont had already laid off 1,700 central office and R&D staff in Delaware earlier this winter, leaving about 4,500 jobs there - plus Dow's 600-worker electronics plant in Newark, Del. (Dow employs 2,000 at former Rohm & Haas sites around Philadelphia.)
The Delaware headquarters "will not change or add to the 2016 restructuring we implemented in December," DuPont officials noted in a Securities and Exchange Commission filing Friday. Staffing plans "will evolve over the next two years."
More jobs could still exit Delaware: DuPont's own Wilmington-based pesticide corporate offices, as part of the new agriculture company, might be moved from Wilmington to the Midwest "over the next two or more years," depending on a decision process still in progress, DuPont said. Last fall, DuPont stopped work on a new seed lab in Newark and moved some ag staff to the Midwest.
Gov. Jack Markell said in a statement that Delaware would offer incentives to try to get the companies and any spin-off successors to base more managers and researchers in Delaware.
He said Delaware plans to expand R&D tax credits, propose a state income-tax break for jobs paying more than $70,000, and give the new DuPont ag company up to $9.6 million in capital-spending and employment grants.
DuPont says Wilmington will be home to the ag group's "CEO and corporate support functions" using "existing corporate infrastructure." But other central jobs, including "business lines, business support functions, R&D, global supply chain, and sales and marketing" will remain "in the two Midwest locations." Analyst Jonas Oxgaard of Sanford C. Bernstein told the Indianapolis Star-Ledger that 100 current employees could staff the new office.
DuPont ag boss Jim Collins could end up running the new company, DuPont sources told me. DuPont says a decision is many months away.
Another planned Dow-DuPont successor, including Dow's legacy materials businesses, will be based at Dow headquarters in Midland, Mich., and keep the Dow name, Dow chairman and CEO Andrew Liveris said in a statement.
DuPont's legacy "Specialty Products" company - an as-yet unnamed group of DuPont's remaining businesses, except ag and performance materials - will be based in Wilmington. The group includes electronics, nutrition, health, industrial biosciences, and safety (Protective Solutions) products, and will also include Dow Electronics and its Newark plant.
Noting that those businesses don't have a lot in common, some observers have suggested that the group could be broken up or sold in pieces, as DuPont CEO Edward Breen did with Tyco International.
Breen split Tyco into four publicly traded companies while selling other major business units. Each of the Tyco successors, except for Berwyn-based TE Connectivity, has since agreed to be acquired by larger companies or buyout investors.
Dow and DuPont hope to complete their merger by the end of 2016 and finish the spin-offs by 2018.
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