Dow Chemical will close 20 plants in restructuring
Plant closures will eliminate 2,400 jobs, about 5% of the company’s workforce.
MIDLAND, Mich.—The Dow Chemical Co. will eliminate about 2,400 jobs and close roughly 20 manufacturing facilities as part of a restructuring plan to cope with slowing economic growth in Europe and elsewhere.
The manufacturing giant said the job cuts amount to 5% of the company’s workforce worldwide.
The company has Canadian operations in Alberta, Ontario, Saskatchewan and Quebec. It could not immediately be reached for comment on whether those operations will be affected by the cuts.
Dow expects the strategy will save roughly $500 million annually by the end of 2014. The company also plans to slash capital spending and investments that will save an additional $500 million.
Dow produces materials used in nearly every business sector and region of the world, leaving it exposed to shifts in global economic growth.
The company’s business has been hurt by Europe’s debt crisis and slower growth in China. Manufacturers, construction businesses and some transportation customers have reduced demand for Dow products. The company’s coatings and materials for electronic devices also have been weak.
“We are operating in a slow-growth environment in the near-term and these actions demonstrate our resolve to tightly manage operations particularly in Europe and mitigate the impact of current market dynamics,” Andrew Liveris, Dow’s chairman and CEO, said in a statement.
Rival DuPont Co. reported a big drop in quarterly profit earlier this week and missed Wall Street expectations. The company announced a restructuring that includes 1,500 layoffs.
Over the next two years, Dow plans to close certain manufacturing facilities in the US, Belgium, The Netherlands, Spain, the UK and Japan.
Despite the sweeping cost reductions, Dow plans to continue to invest in areas where it believes that it can clearly expand its profit margins. Those include Dow AgroSciences, Dow Electronic Materials and its Sadara and US Gulf Coast investments.
©The Canadian Press