DuPont Plans Targeted Reductions To Improve Competitiveness
DuPont today announced it will further align resources consistent with the specific missions of its individual businesses. These actions will reduce the company's global employee workforce by about 4,000, or 4 percent. DuPont will also reduce the number of contract personnel by about 1,300 and shut down less competitive manufacturing assets.
"Taking actions that result in people losing their jobs is the hardest decision we as leaders will ever have to make," said DuPont Chairman and CEO Charles O. Holliday, Jr. "However, we are doing what is necessary to assure the competitiveness of our individual businesses and the performance of DuPont as a whole."
Responding to weakening business conditions in the U.S. apparel and textile markets, DuPont will accelerate the rationalization of its polyester and nylon fiber businesses to improve financial performance. This will result in a combined polyester and nylon reduction of about 2,000 employees – or about half of the total company employee reductions. Specific actions are:
In the Polyester Enterprise, the polyester filaments business unit will accelerate the benefits of its manufacturing alliance with Unifi Corporation by shutting down older filaments manufacturing operations and transferring production to lower cost, more modern and flexible assets. In addition, other polyester manufacturing operations will be streamlined to assure a sustainable competitive cost position.
In the Nylon Enterprise, the apparel segment will continue its previously announced strategy of focusing on differentiated products and modernizing its manufacturing assets. As a result, the company will shut down less competitive production lines.
Other DuPont business units are taking focused actions to improve profitability consistent with their specific revenue, earnings and cash objectives. The most significant of these are:
The company's agriculture-related businesses – Pioneer, Crop Protection and Nutrition & Health – will accelerate their integration of R&D, staff and commercial organizations.
The Lycra® business will reduce manpower at U.S. and European facilities to realize efficiency gains enabled by its new technology platforms. These platforms include significantly advanced and more productive spinning technology to be used in previously announced capacity expansions in South America and Asia.
Internal staff support services will reduce positions commensurate with restructurings across the businesses they support.
"We are very sensitive to our employees' feelings and concerns," Holliday said. "We will continue to look for redeployment opportunities for as many employees as possible, and will help other employees transition to new careers outside of the company. We recognize and appreciate their many contributions to DuPont."
Approximately 75 percent of the affected employees and contractors are in the United States. Projected annual payroll savings, including reduction in contractor costs, are on the order of $400 million pre-tax. DuPont expects to achieve about one-third of the projected cost benefit in 2001, and substantially all in 2002.
DuPont expects to take a one-time second quarter charge of approximately 40–45 cents per share as a result of these actions. Roughly half of this estimated charge will be for employee severance costs, with the remainder principally for asset shutdowns and related dismantlement expenses. Since plans are still being finalized, the actual one-time charge to earnings will not be available until the end of the second quarter.
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