US Dow to incur $900m-1bn in Q4 restructuring charges

30 October 2012 20:46  [Source: ICIS news]

(recast with paragraph 4)

HOUSTON (ICIS)--Dow Chemical expects to incur $900m-1bn (€693m-770m) in pre-tax charges in the fourth quarter stemming from its latest restructuring plans, the US-based company said in a regulatory filing on Tuesday.

Dow announced plans on 24 October to eliminate about 2,400 positions and shut down about 20 plants, resulting in a savings of about $500m/year by the end of 2014.

However, Dow said in Tuesday’s filing with the US Securities and Exchange Commission (SEC) that its restructuring plan would affect about 3,000 positions.

“The 3,000 figure represents the actual severance number,” a Dow spokesperson said. “The net headcount reduction is 2,400. The delta is due to growth in other strategic programmes.”

Part of the restructuring includes an impairment charge from Dow’s decision to write down its Dow Kokam lithium ion battery joint venture. Dow cited weak global demand for lithium-ion batteries.

Dow launched that venture in 2009 with battery maker Townsend Kokam with the help of a $161m grant from the US Department of Energy.

The Dow Kokam venture also tapped $144.6m in tax credits from the state of Michigan.

($1 = €0.77)

By: Brian Ford
+1 713 525 2653

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