Recent staff cuts announced by DuPont Co. are not expected to have a major impact on the firm's Engineering Polymers unit.
Wilmington, Del.-based DuPont recently announced 2,000 worldwide job cuts on top of 2,500 cuts the firm announced in December. The elimination of 4,000 contractor positions also was announced in December.
In a May 13 telephone interview, Keith Smith, Engineering Polymers vice president and general manager, said that although 5 percent of the unit's polymerization and compounding capacity will be removed, the number of jobs lost will be less than 5 percent.
If you look at 2007 and the first three quarters of 2008, we had compounding and production capacity to meet peak demand in automotive and electronics, said Smith, a 29-year DuPont veteran. But North America was still a net exporter we weren't fully balanced around the world.
When volume dropped considerably, we idled many assets. Since last October, almost all of our assets have been idle at one point in time.
Typically, that number has added up to 30-40 percent of DuPont's engineering polymers output. Smith added that a number of units serving markets outside of their home regions were idled at first. At some sites, Smith said, contractor positions were eliminated and then filled by full-time DuPont employees.
Car builds are down 30 percent for the first quarter globally, but some of our businesses are down more than that because of inventory destocking, he said We're seeing a little bit of a bounce-back now, and we're streamlining our plants so that they can be more productive when demand picks up.
DuPont's eight U.S. engineering polymers production sites include Chattanooga, Tenn.; Circleville, Ohio; Parkersburg, W.Va.; and Richmond, Va. The unit has six plants in Europe, nine in Asia and single plants in Canada, Mexico and Argentina.
In addition to nylon, the unit polymerizes and compounds polybutylene terephthalate, acetal, thermoplastic vulcanizates and other specialty resins.
On the plus side, the auto market's move toward fuel-efficient vehicles should allow for increased plastics use, even if the parts are smaller than those in previous vehicles.
Air-intake manifolds on SUVs use more plastic than the same part on a smaller car, Smith said. But fuel efficiency and weight reduction plays to our strengths.
We've prepared well and managed our way to what we see as the bottom, he added. We have a very solid financial position, and our value proposition has never been stronger.
In a May 7 filing with the Securities and Exchange Commission, DuPont officials said the plan will restructure asset and fixed-cost bases in performance materials and three other segments. Performance materials includes Engineering Polymers, which operates DuPont's market-leading nylon 6/6 business. Performance materials posted a first-quarter operating loss of $146 million as sales fell 45 percent to $942 million.