Dow to cut handful of jobs in South Charleston
CHARLESTON, W.Va. -- Dow Chemical plans to eliminate a handful of jobs in South Charleston as part of a plan to cut about 2,400 jobs and close 20 plants nationwide.
The layoffs will affect Dow's gum base unit in South Charleston, said Kanawha County Commission President Kent Carper.
"My understanding is they sent out 13 WARN notices," Carper said. "Someone said, 'That's not that many.' It sure is if you're one of the families."
Employers with 100 or more full-time workers are required by law to file Worker Adjustment and Retraining Notifications when they close a facility, discontinue an operating unit or lay off a significant number of workers.
"The decision to shut down this asset was a portfolio-based decision and is aligned to a series of moves the company is taking to strengthen our long-term competitiveness, focus our resources in areas that will drive growth and deliver the most profitable returns on our investments," Dow spokeswoman Rebecca Bentley said in a prepared statement Wednesday.
"The Gum Base employees have done an excellent job and have demonstrated outstanding performance. Specific impacts are still being finalized," Bentley said.
The gum base plant manufactures a base ingredient for chewing gum, Carper said.
The 2,400 job cuts amount to about 5 percent of the company's total workforce worldwide. Dow expects to save $500 million annual by the end of 2014. With other cost-cutting measures, Dow anticipates saving a total of $2.5 billion.
Carper and South Charleston Mayor Frank Mullens said company officials reached out to each of them Wednesday morning to tell them the news.
"In recent years, they've been adding people," Carper said. "This appears to be a decision made at a high level."
Mullens said Dow officials did not give him specific details about how many jobs would be eliminated.
"My understanding is it's a very small change here in South Charleston," Mullens said. "[There] may be a few jobs affected."
Mullens emphasized that Dow is not closing the entire South Charleston plant, just a unit in the plant.
"We got a commitment that Dow is committed to this area and this is in no way a trend that's going to continue," Mullens said. "[They're] committed to be here in the long term. [That] is a good thing."
The gum base unit is one of nine on Dow's West Virginia Operations site, Bentley said.
"Operations at the other plants at the site will continue as normal," she said. "West Virginia Operations will work with the regulating agencies to cease operations and shut down the operating unit in a manner consistent with applicable environmental, health and safety laws."
Mullens said he thinks Dow employs between 400 and 500 workers in South Charleston.
"I hate to lose any jobs but it seems that this is going to be a small issue for here," Mullens said.
Late Tuesday, the company issued its third-quarter earnings report that had been expected to come out Thursday morning.
It reported a nearly 40 percent drop in net income to $497 million, or 42 cents a share, from $815 million, or 69 cents a share, in the same quarter last year.
It said revenue dropped 10 percent, to $13.64 billion, led by a 10 percent decline in Europe.
Analysts had been expecting the company to earn 37 cents a share on $14.18 billion in revenue, according to FactSet.
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.
"The reality is we are operating in a slow-growth environment in the near-term and, while these actions are difficult, they 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.
The Associated Press contributed to this report. Reach Lori Kersey at email@example.com or 304-348-1240.