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DuPont executive provides update on Dow merger
Jun. 14, 2016
DuPont
United StatesFollow
United States
Dow AgroSciences LLC United StatesFollow
United States
The Des Moines area will see an increase in its workforce after the Dow Chemical-DuPont merger that will leave the Pioneer operation headquartered in Johnston, a top DuPont executive said.
The $130 billion merger, announced in December, is expected to become final in late October or early November, before the combined company moves ahead with splitting into three operations - agriculture, material sciences and specialty products - within two years.
The move essentially leaves Pioneer as it is, with the business operations staying in Johnston and the corporate side remaining in Wilmington, Del., where it has been since DuPont purchased Pioneer in 1999.
Jim Collins, who will be chief operating officer of DowDuPont's agricultural business when the merger is complete, talked to the USA Today Network about the merger, the agricultural economy's overall health and the possibility that rival Monsanto and Bayer also will merge.
Question: You have said there are no further jobs cuts planned in Johnston beyond the 175 that were announced by DuPont as part of its plan. How will the job picture look in Iowa once the merger closes?
Answer: As far as Des Moines goes, we've established that location as sort of the center or hub for our seed business going forward, and we will be looking as we now start to plan on the integration with Dow ... for ways to bring new jobs into Des Moines. ... I believe that, by and large, we are through any of the reductions and there are only good things to come from that location down the road.
Q: So the expectation is to add, rather than subtract, jobs?
A: I believe that, yes.
Q: DuPont and Dow have said the merger could save $3 billion. How will the merger affect research and development?
A: Our spending on total R&D (after the merger) is about $1.2, $1.3 billion (annually). So there's going to be plenty of resources. As (DuPont CEO Ed Breen) has said to the investment community, going forward we'll still be a very productive company. We'll look for ways to save money in other non-product, non-R&D areas, but we save that money and we'll put some of it into R&D and we'll give some back to investors. Once we get through this synergy work and we establish a floor, it becomes a foundation for future investment.
Slumping farm economy spawns 'merger mania'
Q: Have you gotten any feedback from farmers on the merger? Some have expressed concern publicly that consolidation in agriculture could lead to higher prices and fewer choices.
A: We believe this is about creating more choices. With the resources we are going to have as a combined company, we believe we'll be able to provide credible alternatives to the choices that have been out there. We're actually excited about being that company that can now compete on not only a U.S. but a global scale when it comes to traits. As we've started to share that message we've gotten quite favorable responses to that.
Q: Can you speak to the overall agricultural economy and the struggles that have plagued DuPont and other companies in seeds and chemicals?
A: We've had three perfect years of weather, three in a row, and what are the odds that we're going to have another? Corn came back up above $4 and I think that has lowered the blood pressure. I think a lot of growers sold a lot of grain in the last couple of weeks. I don't think we have more down side. I'm not ready to predict that we're going to see this huge recovery, but we've at least stabilized right. Let's see how weather turns out in the middle of the year.
Q: Monsanto and Bayer are discussing the possibility of merging. What impact would that have on the agricultural operations of the combined Dow-DuPont?
A: They will clearly be a formidable competitor, no doubt about that. What I like about our deal is, first, our timing. We're first through the process for regulatory approvals. And the regulators will look at the market that exists on the day of the applications, and when (Monsanto-Bayer) come along I think they'll face some challenges. ... I think we will have the advantage of speed. We'll integrate faster, cultures will get aligned more quickly and just about the time that maybe they are going to be struggling going through all of that, we'll be able to perform.
Source: Des Moines Register
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