News

US States Woo DowDuPont Businesses

01.06.2016 -

When deciding where to locate operations of the various businesses Dow and DuPont plan to merge into the combined DowDuPont, the companies will be spoiled for choice. Authorities at locations where one or the other business is now based are already competing as to who can offer the most attractive incentive package.

At the same time, other locations are said to be aggressively competing for investment. Since the announcement of the merger plans, the state of Delaware has been piling cash on the table to hold onto DuPont. Controversial with the state’s taxpayers is the five-year package worth $9.6 million in public money to be paid to the company as it restructures prior to the merger.

In Dow’s hometown of Midland, Michigan, communities that live from the chemical giant are concerned that the state government does not have the resources to match attractive offers from locations farther afield. More than 6,000 jobs in and around Midland and an additional 900 elsewhere in the state, many of them high-paying, could be it risk, it is feared. Michigan’s governor, Rick Snyder, who is still trying to deal with the mishandled switch of economically depressed Flint, Michigan’s water supply to the Flint River, has scaled back investment aid.

Meanwhile, Dow is believed to have received attractive offers from outside the state that management, while underlining its commitment to Midland, has not ruled out looking at.

Back in Delaware, taxpayers are up in arms about a recent decision by the state Council on Development Finance to provide grants of nearly $8 million to financially struggling DuPont spin-off Chemours for a headquarters project in Wilmington in exchange for the company retaining 900 full time jobs.

Despite the approval of the grants, Chemours has not yet decided whether to keep its headquarters in Delaware if offers from the neighboring states of Pennsylvania and New Jersey prove more attractive.

Chemours CEO Mark Vergnano has said the company would prefer to stay in Delaware, if it can “figure out a way to make it fiscally work for us.”  A decision is expected by October, if not earlier. All possibilities remain open, the CEO said, to keep existing DuPont/Chemours jobs in Delaware following the merger, the state legislature earlier this year passed the Delaware Competes Act, a series of corporate income-tax reforms benefiting business.

Delaware’s Economic Development Office has calculated that if Chemours were to pull out of Wilmington, the cumulative negative economic impact could exceed $500 million.