The combined Dow Chemical Co.-Union Carbide Corp. is shaping up to look a lot like the old Dow Chemical, at least from the executive suite. Of the eight business presidents appointed by Dow management April 6, seven are longtime Dow employees.
Five of the eight will be directly involved with the new firm's plastics businesses. They are:
Romeo Kreinberg, Dow's current vice president of polyethylene, will lead the firm's polyethylene, polypropylene, ethylene- styrene interpolymer, PET/PTA, Insite technology and wire and cable compounds businesses.
The newly formed PE business will be the largest in North America, ranking first in low density and linear low density PE production and third in high density PE production. In PP, the firm will be among North America's top ten with a market share of about 7 percent.
Kathleen Bader, Dow's current corporate vice president of quality and business excellence, will oversee its polystyrene, fab-ricated products, engineering plastics and rubber products businesses, as well as continuing to head Dow's Six Sigma quality-management efforts.
Ed Gambrell, Dow's current business vice president of Insite technology, will lead its Market-Facing Business units, including Dow Automotive and New Business Growth. He also will be responsible for its Growth Center, Business Intelligence Center, market research and Sales Technology Center.
Robert Wood, Dow's current vice president of polyurethanes, will oversee its polyurethanes, propylene oxide, epoxy and Concepture applications development businesses.
Lee McMaster is the only Union Carbide veteran among the eight appointees. He currently serves as corporate vice president and general manager of Carbide's specialty polymers and products unit and will now be responsible for the new firm's chemicals unit, including chlor-alkali, ethylene dichloride and vinyl chloride monomer. His appointment is contingent on approval of the merger.
McMaster's role also includes managing the new firm's technology licensing efforts, which will have a significant impact in plastics because of the widespread use of Carbide's Unipol-brand processing technology for PE and PP.
McMaster may have to untangle the much-litigated metallocene catalyst technology that both firms, as well as competitors such as Exxon Mobil Corp., have developed.
Univation Technologies, the metallocene licensing partnership between Carbide and Exxon Mobil, could be a thorn in Dow's side, since it could allow a key Dow rival to profit from production at plants operated by the new Dow/Carbide.
Sources have said that metallocene technology — Univation's in particular — is one of the remaining sticking points in the Federal Trade Commission's review of the deal.
Ironically, Dow and Carbide may be victims of their own hype in this case, since both Dow and Exxon/Univation have aggressively promoted the technology's potential for several years.
"For a long time, Dow and Carbide have been saying metallocenes were going to be a big business, now they're backpedaling and telling the FTC it's not going to be a big business," an industry contact said.
Dow and Carbide officials declined to comment on the appointments or on the FTC review, citing confidentiality agreements. The review is expected to be completed by mid-year.
"The two companies are considered competitors until the day the merger is approved," Dow spokeswoman Anne Ainsworth said.
The appointments were in line with industry expectations, according to Bill Vernon, a consultant with Chemical Market Resources Inc. in Houston.
"It's not surprising that a Carbide person is involved with licensing, since Carbide has always been an excellent licensing operation," Vernon said. "Licensing was one of the drivers behind Univation."
Vernon also said he expects the new firm to keep Carbide staffing in place in the HDPE and wire and cable compounds businesses where Dow doesn't have much experience.
"If Carbide knows those markets, it just makes sense to keep the key sales and marketing people there to insure continuity," he said.
Plastics and Performance Plastics accounted for about 51 percent of Dow's $18.9 billion revenue total in 1999. At Carbide, Basic Chemicals & Polymers — including PE and PP — accounted for about 34 percent of the firm's $5.9 billion revenue total.