Dow Chemical Co. will cut 1,000 jobs, it's about 2.3 percent of its work force, to rid itself of underperforming businesses and boost its global efficiency.
The Midland-based company, one of the biggest U.S. chemical makers, said it will exit the automotive sealers business within the next nine to 18 months in North America, Asia and Latin America. It will look at options in its European operations.
Other cutbacks include idling a styrene plant in Camacari, Brazil, on Jan. 1 and closing a cellulose manufacturing facility in Aratu, Brazil, in the first quarter of next year.
Wholly owned subsidiary Union Carbide Corp. will shut down its polypropylene facility in St. Charles Parish, Louisiana, before the end of the year, and the company will significantly reduce research and development and other functions at a facility in South Charleston, West Virginia.
"Today's announcement reflects our commitment to prune businesses that are not delivering appropriate value and tackle tasks more efficiently across the entire organization ... freeing up capital and resources that will be redirected toward value-creating growth opportunities," Andrew N. Liveris, Dow's chairman and chief executive, said in a statement.
Dow expects the cuts will result in a charge of $500 million (339 million EUR) to $600 million (407 million EUR) for write-downs and severance packages in the fourth quarter of 2007. The company said it expects to save $180 million (122 million EUR) a year once the moves are made.
Dow reported a 21.3 percent drop in profit in the third quarter due to changes in German tax laws, higher domestic tax rates and charges for research and development. It posted net income after paying preferred dividends of $403 million (273.4 million EUR), or 42 cents per share, compared with a year-earlier profit of $512 million, or 53 cents per share.
The company employs about 43,000 people worldwide.
Dow Chemical shares fell 42 cents to $41.12 in midday trading Tuesday.
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