DuPont to Cut Delaware Staff in Dow Merger

21.12.2015 -

As plans for the merger of Dow and DuPont gather momentum, customers and employees as well as local businesses in communities where some of their operations are based are concerned about the future.

In its home state of Delaware, DuPont is said to be planning to eliminate hundreds of high-paying jobs at local R&D hubs. The job cuts were revealed to employees ahead of an announcement that the Wilmington group would merge its global scientific and engineering units with effect from Jan. 1.

The realignment is expected to go hand in hand with additional workforce cuts next year as part of a substantial redesign of DuPont’s overall research infrastructure. Altogether, the group employs around 7,000 people in Delaware.

Another shock to Delaware, local news reports said, are plans by the hybrid seeds subsidiary DuPont Pioneer to quit the state in March 2016. The company with headquarters at Johnston, Iowa, was acquired by the chemical giant in 1999. It has operations at two of DuPont’s research hubs in the mid-Altlantic state.

Stine Haskell is an agricultural research site. At Experimental Station, some of the strongest brands in the chemical producer’s history, including nylon, the aramid fibre Kevlar and the HDPE fiber Tyvek, were created, along with neoprene rubber.

The rubber business was sold at the end of last year to Japan’s Denka Performance Elastomer, a 70:30 joint venture of Denka Kagaku Kogyo and Mitsui.

Some of the Pioneer jobs are being moved to Iowa, but most will be eliminated. At the same time, construction will be halted on a $35 million soybean research center at Stine Haskell, on which construction began in 2104. The facility – including a seed genetics testing station – was planned to be opened in 2016.

Critics of the DuPont rollback in Delaware included Edgar Woolard, CEO from 1989 to 1995. Woolard told state news media it was difficult to understand why the group would target research, which has long been its lifeblood.

At DuPont Pioneer’s home base in Iowa, the mood is slightly more optimistic, although here, too, there are warning signs. One is the announcement last week that the seeds company will forgo $13.3 million in state tax credits for an ongoing $138 million expansion as it could not guarantee to create the 305 jobs necessary to receive the funding.

Some commentators said Pioneer might have faced the same problem even without the Dow-DuPont merger, due to the weakness of the US farm economy. Rival Monsanto has decided not to pursue a $90 million expansion of a corn plant at Independence, Iowa, a project that would have created about 50 jobs.

Figures show that US farm income is likely to decline by 38% in 2105 as growers are squeezed between low corn and soybean prices and high costs for seeds and fertilizer, among other products.

As a major investment in Iowa, DuPont recently commissioned a 114-liter cellulosic ethanol plant at Nevada, Iowa. Output will supply the biofuels industry.