Will DuPont Merger With Dow Chemical Cost 20,000 Jobs?

By Douglas A. McIntyre Updated Jan 13, 4:18PM EST · Published Dec 9, 6:38AM EST

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Will DuPont Merger With Dow Chemical Cost 20,000 Jobs? — © Thinkstock

The Wall Street Journal reported that E.I. du Pont de Nemours and Co. (NYSE: DD), better known as DuPont, and Dow Chemical Co. (NYSE: DOW) may merge. DuPont employs 62,000 people, while Dow Chemical employs 51,000. One major reason for mergers is to cut costs. The two companies have enough overlapping businesses that a lot of people will lose jobs. The question is how many.

The 113,000 workforce of the combined company would operate one of the world’s largest suppliers of chemicals for agriculture. Both companies provide industrial chemicals and make plastic products. Both provide electrical products as well.

Dow and DuPont each have only modest margins. Last year, DuPont made $3.6 billion in net income on $35 billion in revenue. Dow Chemical made $3.8 billion on $58 billion. Marrying the two companies should boost their combined bottom line by hundreds of millions of dollars, if not more.

The stocks in each company moved up by over 3% when the rumor hit Wall Street. Since DuPont trades well below its 52-week high, investors should be happy. Someone loses in many mergers, however. Some members of management are fired, and so are a large number of other workers. The open issue in a DuPont merger with Dow Chemical is how many?
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.