CHICAGO (July 7, 9:35 a.m. EDT) — Global pressures are driving the upcoming merger of Dow Chemical Co. and Union Carbide Corp., said Dow Chairman Frank Popoff.
"You have to start with the fact that this industry is consolidating," he said.
At NPE 2000, Popoff received the Daniel Fox Lifetime Achievement Award and gave the keynote speech during the Plastics Hall of Fame induction dinner, held June 22. Interviewed before the banquet, Popoff discussed a range of issues, including the historic merger, his upcoming retirement from Dow and Dow´s 1999 pullout from the Society of the Plastics Industry Inc.
Dow dropped a bombshell last August when the Midland, Mich.-based company announced it was buying Union Carbide in an $11.6 billion deal. The deal is scheduled to close later this year.
Popoff, 64, recalls giving a speech in Europe nearly 20 years ago that predicted consolidation in the chemical industry. Executives at other chemical companies joked around about it — but it ended up coming true.
"It was inevitable," Popoff said. "There´s been an enormous consolidation. And it´s happening for the reasons that consolidation is becoming a reality in so many other industries. It´s a confluence of competencies that are necessary to become fully competitive on a global scale."
The Daniel Fox award, named for the man who developed polycarbonate at GE Plastics, recognizes a lifetime of work. Popoff climbed the ranks in a 41-year career at Dow — but it almost didn´t happen.
At Indiana University, he earned both a bachelor´s degree in chemistry and a master´s in business in 1959. He worked in the college placement office, helping companies set up interviews with new graduates. Popoff was worried about IU´s reputation in Midland, since he had trouble filling the interview schedule for Dow recruiter Fred Peacock. Then all of a sudden, Peacock was summoned home. His wife was having a baby.
Popoff recalls: "He said to me, `Frank — gee, I´ve enjoyed the time we´ve had together; I gotta go. Please come to Midland.´ I really didn´t want to go to Dow. I had a couple of other offers that I was really serious about. But, in all fairness, I liked him, so I came to Dow and the rest is history."
He entered Dow´s sales training program. After serving in sales and service at the Cleveland office, he became marketing manager for transportation chemicals, mainly antifreeze and brake fluid, working out of Midland.
Dow moved him to Europe to sell antifreeze, then he became a key marketing person with the then-young Dow Europe organization. After just two years in Europe, he returned to Midland to run Dow´s agricultural chemicals business, then he bounced back to Dow Europe in 1976. This time he stayed for a decade.
Living in Europe gave Popoff a taste for the global forces that today are plowing through the business world.
"We became who we are by virtue of really staying with good process chemistry and product chemistry in the United States, and then proliferating what we did in the states internationally. And that was my big break. I got to go international back in the ´60s and help get Dow started there."
He witnessed the often-harsh environmental movement in Europe from a front-row seat as an executive at one of the world´s producers of chlorine and other chemicals. Later, he helped create the Responsible Care program at the Arlington. Va.-based Chemical Manufacturers Association, recently renamed the American Chemistry Council.
"I knew this from Europe — if you don´t manage issues, then you´d be a hostage to those issues," Popoff said.
At Dow Europe, he was promoted to vice president of marketing, executive vice president and, in 1981, to president.
He was elected to Dow´s board of directors in 1982 and became a vice president in 1984. He transferred back to the Midland headquarters as executive vice president the following year. In 1987, he became president and chief executive officer. In 1995, when he turned 60, he relinquished the CEO post but remained chairman for five years, consistent with Dow policy.
Also under the company policy, Popoff will retire in November, after he turns 65 this Oct. 27. William Stavropoulos, Dow´s president and CEO, will move to chairman, replacing Popoff.
Popoff will keep busy after he steps down as Dow chairman. He serves on the board of directors at American Express Co., U S WEST Inc., United Technologies Corp. and Chemical Financial Corp.
One area that Popoff claims he is not involved with is the friction between Washington-based SPI and the American Plastics Council. Dow and other chemical companies dropped out of SPI to concentrate their money and time on Arlington-based APC, best known for its advertisements asking consumers to "take another look" at plastics.
The resin departures hurt SPI financially. SPI´s new president, Don Duncan, is the former head of the DuPont Dow Elastomers joint venture — a resin guy — who says he wants to mend fences between SPI and APC.
In Chicago, Popoff said he was not involved in Dow´s decision to leave SPI.
"As chairman, I have not been operationally oriented, and that was not my call. ... We try to give a high degree of autonomy to our people, be they our (agricultural chemical) people, or our plastics people or our chemicals people. They make their shots. It´s their budget. It´s their bottom line. So they make those decisions."
Asked his own opinion on SPI and APC, Popoff said: "I think fundamentally, as I look at it, we said it´s in our best interest to really concentrate with the APC on those issues where we have an impact. If you look at SPI, it´s a very broad-based organization and one that serves a variety of audiences in a variety of ways. We just felt that the resources that we had to dedicate were best focused in a much smaller group of like-minded people that happened to constitute the APC."
He said SPI could end up a better organization "by virtue of not having too many disparate voices and too many messages."