Mississauga, ON — DuPont Canada warned employees and contractors of impending cutbacks this week, following an earlier announcement by its Wilmington, Del., based parent that DuPont is reorganizing.
The company has said it is taking aggressive actions to ensure its global competitiveness as a more focused, science-based company following its sale of its Invista fibres division.
Included are productivity and organizational actions that will achieve a $900 million cost improvement in 2005. In addition, the company says it will undertake actions that strengthen its ability to achieve 6% annual revenue growth — a key objective in its ongoing transformation to become a sustainable growth company.
DuPont is taking these actions to remain competitive in an environment defined by sustained high energy costs, increased global competitive intensity, and a customer base that is shifting toward emerging economies, said DuPont chairman and CEO Charles O. Holliday, Jr.
“With the anticipated sale of Invista, DuPont will be a smaller company with the potential for higher growth and profitability,” Holliday said.
The company expects its actions to yield a $450 million cost improvement in 2004, and the full $900 million in 2005. Cost improvements targeted for 2004 will essentially offset residual costs from the separation of Invista and other expected fixed cost increases.
A portion of the fixed cost savings will come from work force reductions. The company will publicly disclose information on the number of position eliminations and any restructuring charges in its first quarter 2004 earnings release on April 27, 2004.
The company also will devote more Six Sigma projects to margin improvement, and will optimize assets following product line consolidations. These actions are expected to realize a $100 million variable margin improvement in 2004, and another $100 million improvement in 2005 mainly through cost reduction.
“With the separation of Invista, DuPont enters the next chapter of its transformation. In essence, we are launching a new DuPont,” Holliday said. “We have a lot of change ahead of us difficult, trying, yet ultimately gratifying change.
“As we take on this challenge, it is important to remember what stays the same. We are a science company. We will achieve sustainable growth through the integrated application of superior science; by getting paid for what we know; and by pursuing productivity with a passion.”