UpdateDow to cut 5,000 jobs, close plants in major restructure

08 December 2008 14:05  [Source: ICIS news]

Dow to cut jobs and close plantsLONDON (ICIS news)--Dow Chemical will cut 5,000 full-time jobs, close 20 plants and sell businesses in the face of the economic downturn, it said on Monday. 

Plants would be closed in high cost locations, the largest US chemicals producer said as it sought to save $700m (€553m) in operational costs by 2010. The job cuts represented a reduction of approximately 11% of its global workforce, Dow said.

In addition, the company would temporarily idle 180 plants and reduce its contractors worldwide by approximately 6,000 as predicated by reduced operations, it said in a staement.

Having just created its upstream chemicals and polymers joint venture with PIC of Kuwait, called K-Dow, and in expectation of completion of its acquisition of specialties maker Rohm and Haas, the company said it was re-organising its approach to three distinct areas of business and the creation of a "lean corporate centre".

The $700m in additional cost savings are expected to be made in addition to projected $800m in savings from the integration of Rohm and Haas.

“Transformation, by definition, requires a commitment to working differently.  We are moving from a highly centralised and standardised approach, to operating three very different business models with a lean and efficient Corporate Center,” Dow CEO Andrew Liveris said.

“Today’s restructuring is designed to support the Dow of Tomorrow. However, we are accelerating the implementation of these measures as the current world economy has deteriorated sharply, and we must adjust ourselves to the severity of this downturn, he added.”

Dow said it would operate according to three business operating models: Joint Ventures/Asset Light; Performance Products; and Health & Agriculture, Advanced Materials and other Market Facing Businesses. Specific details on the structures would be outlined early next year, it added.

($1 = €0.79)

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By: Nigel Davis
+44 20 8652 3214

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