Restructuring Activities at Dow Integrating Dow Corning Will Cost about 2500 Jobs
Dow Chemical has announced a series of actions to achieve synergy capture and accelerate shareholder value creation from the restructuring of its ownership of the Dow Corning Corporation. That comprises drastic cutbacks such as efficiency-enhancing measures, plant closure and job cuts in the amount of 2500.
Midland/USA – According to information given by Dow Chemical the restructuring activities related to integrating Dow Corning will comprise some difficult actions. Dow will shut down silicones manufacturing facilities in Greensboro, North Carolina/USA, and Yamakita, Japan, as well as certain administrative, corporate and manufacturing facilities to further enhance competitiveness and streamline costs associated with the transaction. Furthermore Dow will cut its workforce by 2,500, roughly 4% of its total. Dow Corning had about 11,000 employees, according to its 2015 sustainability report. All of the actions are expected to be completed during the next two years.
Dow became the 100% owner of Dow Corning’s silicones business on 1 June, acquiring Corning’s 50% interest for roughly $4.8 billion. Dow expects to capture $500 million per year in cost savings and growth synergies as a result of the integration. That comprises $400 million in cost savings, up from the previously stated $300-million target, and $100 million in growth synergies. Dow expects full ownership of Dow Corning’s silicones business to deliver $1 billion of additional annual EBITDA at full run-rate. Cost synergies will be achieved through a combination of workforce consolidations and savings from actions such as harmonizing energy contracts at large sites, optimizing warehouse and logistics footprints, implementing materials and maintenance best practices, combining information technology service structures and leveraging existing research and development (R&D) knowledge management systems.