Being DuPont (NYSE: DD ) in a time of steadily rising raw materials costs and a weak operating environment hasn't been easy. We've witnessed DuPont spinning off its Conoco energy unit (now ConocoPhillips (NYSE: COP ) ), selling off its pharmaceutical business to Bristol-Myers Squibb (NYSE: BMY ) , and most recently, announcing that privately held Koch Industries is buying its Invista fabrics and fibers unit, which includes Stainmaster carpets and the miracle fabric Lycra. DuPont will get $4.4 billion in cash for Invista.
DuPont's been working to consolidate down to just a handful of divisions. The chemical company dubs itself a "science company," which invariably pulls up mental images of serious-minded folks in white lab coats and safety goggles tinkering with test tubes. DuPont, though, insists that it "puts science to work by solving problems and creating solutions that make people's lives better, safer, and easier."
Sounds lovely, but now DuPont will have to do it with fewer people, as the company announced today another step in its business transformation: lay-offs. DuPont plans to achieve $900 million in cost savings over the next two years, through a combination of job cuts, margin improvement, tightening its corporate infrastructure across its five divisions, and turning its attention more to emerging markets like China and Brazil.
Following the sale of Invista, which should close by mid-2004, barring any antitrust concerns, DuPont will finally be in a position to really focus its efforts on its most profitable businesses. To fully get there, though, the company will have to take the above steps to streamline its business.
It's not surprising that DuPont's restructuring isn't yet complete, and investors appear to be happy with the moves the company's making. Shares are up almost 2.5% this afternoon, trading at around $42.47. That's still below DuPont's 52-week high of $45.55, but for shareholders, DuPont's announcement of more money- saving strategies is welcome news.
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