Dow Chemical Co., the largest U.S. chemical maker, is considering a plan to cut about 2,400 jobs and shut 20 manufacturing plants to reduce annual costs by $500 million, according to a draft press release.
The release, inadvertently e-mailed by the company to Bloomberg News, is dated Oct. 25 and hasn’t been approved by the board, Becky Evans, a Dow spokeswoman, said Tuesday by phone. An additional $500 million will be saved by cutting capital spending and curtailing some investments, the Midland, Michigan-based company said in the statement.
The job cuts, which would amount to 5 percent of Dow’s global workforce, follow DuPont Co.’s announcement Tuesday that it is eliminating 1,500 jobs because of declining demand for paint pigment and solar cells. Dow Chairman and Chief Executive Officer Andrew Liveris said in July that the company is operating in the worst conditions since 2009.
“The reality is we are operating in a slow-growth environment in the near-term,” Liveris said in the draft press release. “While these actions are difficult, they demonstrate our resolve to tightly manage operations -- particularly in Europe -- and mitigate the impact of current market dynamics.”
The annual costs savings should be realized by the end of 2014, Dow said. Fourth-quarter earnings will be reduced by 50 cents to 60 cents a share for expenses related to asset impairments, write-offs, severance and other costs, the company said.
The reductions won’t affect plans for new factories on the U.S. Gulf Coast and in Saudi Arabia, or opportunities in the agriculture and electronics units, the company said.
The facilities being considered for shutdown are in Belgium, the Netherlands, Spain, Japan, the U.K. and in Michigan and Ohio.
Dow Chemical's shares fell 4 percent to $28.55 on the New York Stock Exchange Tuesday, and retreated to $28.35 in trading after the close. The company is scheduled to release third-quarter earnings on Oct. 25.
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