Dow Chemical cuts 5,000 jobs, closes 20 plants
The Michigan chemical company will cut 11% of its workforce due to poor market conditions.
The company, one of the largest chemical makers in the world, expects the moves to save about $700 million per year by 2010. Dow also will temporarily idle 180 plants and prune 6,000 contractors from its payroll.
The Midland, Mich.-based company expects “the new Dow” to be comprised of three units: joint ventures; performance products; and health and agriculture, advanced materials and other market-facing businesses.
The reorganization comes just days after the company closed on its K-Dow Petrochemicals joint venture with a company controlled by the Kuwait government.
Dow (DOW, Fortune 500) is slated to close on its $15.3 billion buyout of Rohm & Haas Co. early next year, a deal it hopes will help it grow into the high-margin specialty chemicals market. The company expects that deal to results in about $800 million in savings over time.
Last week Dow rival DuPont (DFT) said it would cut 2,500 jobs and warned it won’t turn a profit in the fourth quarter due to a slowdown in the automotive and construction markets.
Shares of Dow Chemical jumped 75 cents, or 4 percent, to $19.75 in premarket trading, having closed Friday at $19. The stock is still worth less than half of its 52-week high of $45.50, set nearly a year ago. To top of page
Source: CNN Money
