MIDLAND, Mich.—Dow Chemical Co. is eliminating 2,500 jobs, 4 percent of its work force, in an effort to achieve “cost synergies” with its new silicones unit and former 50/50 joint venture Dow Corning Corp.
Dow will shutter silicone manufacturing facilities in Greensboro, N.C., and Yamakita, Japan, in addition to other administrative, corporate and manufacturing facilities to further enhance competitiveness and streamline costs associated with the joint venture purchase, the firm said in a June 28 news release.
The company said 700 reductions will occur within the Great Lakes Bay Region, which is where Dow is headquartered, from both Dow and Dow Corning. Dow said notifications to affected employees will start in the coming weeks and continue through the end of the third quarter of 2016.
Roles will be eliminated on various timetables throughout the two-year integration period.
A Dow spokeswoman said executives would not be made available to comment on the move. The firm said that it plans to capture $500 million in combined run rate annual synergies, including $400 million in cost synergies. Both figures increased by $100 million compared to initial projections.
“By shutting down these facilities we are able to shorten the supply chain to enhance competitiveness, streamline costs and deliver better service to our customers. Product lines and technologies used there will be moved to other existing facilities in our manufacturing grid,” the spokeswoman said in an email.
The company would not disclose employment levels at the two facilities or give exact specifics of how many other administrative, corporate and manufacturing jobs would be affected.
“We are moving quickly and effectively to integrate Dow Corning and deliver the synergies that will drive new levels of value creation for our customers and generate even greater returns for our shareholders,” Dow CEO Andrew Liveris said in a statement.
Corning Inc. and Dow came to an agreement in December 2015 under which Dow paid $4.8 billion in cash to acquire Corning's stake in the joint venture. The firms finalized the agreement in June, with the two companies maintaining their equity stake in Hemlock Semiconductor Group, a polysilicon manufacturer comprised of several joint venture companies currently owned in majority by Dow Corning.
Howard Ungerleider—Dow's vice chairman and chief financial officer—will serve as chairman of Dow Corning in addition to his current responsibilities.
The firm also appointed Dow Vice President Mauro Gregorio, who led the Dow Corning integration team, as the new CEO of Dow Corning. Andy Tometich, a 27-year veteran of Dow, was appointed business president of Dow Corning's silicones business.