National Employee Morale Day came to Dow Chemical (NYSE: DOW) as it fired 2,400 people and closed 20 factories. America's large industrial sector, which appeared to be on the mend earlier this year clearly has started to struggle due to the global slowdown. As the company struggles, its chief has been busy Chairman and CEO Andrew N. Liveris was elected Chairman of The Business Council here at the organization's fall meeting. Liveris apparently won't be giving up any of his pay as part of the cost cuts. He made $19.3 million last year.
The firm's PR management wrote:
The Dow Chemical Company today announced a restructuring program designed to accelerate cost reduction actions and advance the next stage of the Company's transformation in the midst of persistently slow macroeconomic growth.
These actions will result in a net reduction of approximately 2,400 positions, or five percent of the global workforce. The restructuring also includes the shutdown of approximately 20 manufacturing facilities. Once fully implemented, these actions are expected to result in approximately $500 million of annual operating cost savings by the end of 2014. The Company will take charges totaling approximately $0.50 – $0.60 per share in the fourth quarter of 2012 for asset impairments and write-offs, severance and other costs related to these measures.
In addition, Dow will further reduce capital spending and investments for targeted growth programs that are no longer a priority in this environment. These measures are expected to deliver an additional $500 million cash impact. Taken together with the $1.5 billion of measures Dow has already initiated, this will bring the Company's stated cumulative intervention goal to $2.5 billion.
Douglas A. McIntyre
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