Dow Chemical plans to close 20 plants and cut 2,400 jobs
as part of a global cost-cutting program over the next two
years, the company said on Wednesday.
The 2,400 layoffs amount to 5% of Dow's global workforce.
With the moves, Dow expects to save $500 million in annual
operating costs by the end of 2014.
"The reality is we are operating in a slow-growth environment in the near-term and,
while these actions are difficult, they demonstrate our resolve
to tightly manage operations particularly in Europe and mitigate the
impact of current market dynamics, said Andrew N.
Liveris, Dow CEO.
Dow says it also plans to further reduce capital spending and
investments for certain unspecified growth programs.
Those measures are expected to save the company an additional
$500 million in cash.
Earlier this year we announced targeted actions
levers we planned to pull to reduce costs and protect our
earnings growth path," said Liveris. "The interventions we are
announcing today represent the next phase in our path to
driving efficiency and prioritizing our growth programs.
"Importantly, we will continue funding projects where differentiation is
rewarded even in this environment and where margin expansion opportunities are clear
for example in Dow AgroSciences, Dow Electronic
Materials, and our Sadara and US Gulf Coast investments."
Plants to be shut down include a high-density polyethylene
(HDPE) facility in Tessenderlo, Belgium, and a sodium
borhidrate plant in Delfzijl, the Netherlands.
Moreover, a number of performance materials manufacturing facilities will be closed, including
an automotive systems diesel particulate filters manufacturing
facility in Midland, Michigan; formulated systems manufacturing
facilities in Ribaforada, Spain,
Birch Vale, United Kingdom and Solon, Ohio; and an epoxy resins
facility in Kina Ura, Japan.
Additionally, Dow says it will record an impairment
charge related to the write-down of Dow Kokam's assets,
reflecting weak global demand for lithium-ion batteries; and
will consolidate certain assets in its oxygenated solvents
business, as well as shut down a number of other small
manufacturing facilities. These actions are
expected to take place over the next two years.
Dow said it plans to involve local stakeholders as
defined in each country and in compliance with relevant
information and consultation processes.