DuPont Textiles & Interiors (DTI) today announced actions that will advance its progress toward becoming a more competitive integrated enterprise.
As part of its drive to capitalize on the strength of its newly combined businesses in response to rapidly accelerating industry structural changes, DTI plans to reduce more than 2,000 employees worldwide, or 10 percent of its global work force. More than two-thirds of the reductions are in manufacturing facilities and offices in the United States, with most of the balance in Europe. In the U.S., DTI plans to shut down its Terathane® PTMEG manufacturing unit at Niagara Falls, N.Y., and less competitive portions of the spandex operation at Waynesboro, Va.
"These are difficult but necessary actions to position DTI for success in a highly competitive and rapidly consolidating industry," said Richard R. Goodmanson, DuPont executive vice president and chief operating officer, who is leading DTI. "We must act quickly and decisively to match our resources with current market realities. We are committed to doing what it takes to capture market opportunities while serving our customers with speed and flexibility."
"We do not anticipate a negative impact to our revenue streams as a result of these restructuring actions," Goodmanson added. "We will support our current revenue base from more competitive facilities. We are primed to grow revenues by capitalizing on our strong global market access, key branded platforms and a robust innovation pipeline targeting the global apparel, interior and textile markets."
DuPont expects to achieve annual pre-tax cost savings of about $120 million as a result of these actions, realizing about 30% in 2002 and substantially all in 2003. The company expects to take a one-time second quarter charge of 12-16 cents per share, with about two-thirds due to employee separation costs, and the balance for asset shutdowns. Since plans are still being finalized, the actual one-time charge to earnings will not be available until the end of the second quarter.
DuPont announced in February that it planned to create DTI as a new wholly owned subsidiary and separate it from DuPont by year-end 2003, market conditions permitting. The company is evaluating a range of separation options, including an Initial Public Offering. DTI includes the nylon fibers, polyester fibers, Lycra® brand fiber and spandex businesses, plus their intermediates and joint ventures.
"We recognize that this is a difficult time for all employees," Goodmanson said. "We appreciate the contributions of our employees who will be leaving and we will treat everyone – whether they are leaving or staying – with dignity and respect."
Current plans call for more than half of the affected employees to leave DuPont by July 31. They can take advantage of transition packages available in their country or region. For example, U.S. employees leaving DuPont will receive a severance package providing them with career transition payments based on length of service, as well as a range of health and dental benefits and educational assistance.
DuPont Textiles & Interiors is the largest integrated textile fiber and interiors business in the world, with approximate annual revenue of $6.5 billion and operating in 50 countries. Headquartered in Wilmington, Del., DTI is comprised of two units, each with subgroups: Textiles and Interiors including apparel, home, industrial and flooring; and Intermediates including nylon, Terathane® PTMEG and polyester intermediates, specialties and joint ventures. DuPont Textiles & Interiors has a powerful portfolio of the best-known, worldwide brands and trademarks of DuPont including: Lycra®, Stainmaster®, Coolmax®, Thermolite®, Supplex®, Antron®, Cordura®, Tactel®, Dacron® and Micromattique™.
During 2002, DuPont is celebrating its 200th year of scientific achievement and innovation – providing products and services that improve the lives of people everywhere. Based in Wilmington, Del., DuPont delivers science-based solutions for markets that make a difference in people's lives in food and nutrition; health care; apparel; home and construction; electronics; and transportation.
This news release contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by DuPont, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries in which the company does business; competitive pressures; successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances; cost of raw materials, research and development of new products, including regulatory approval and market acceptance; and seasonality of sales of agricultural products.