DUPONT NYLON RENEWAL PLAN WILL COST $750M, 2,700 JOBS
Byline: Stuart Chirls
NEW YORK — Continuing the makeover of its nylon business, DuPont unveiled Thursday a five-year, $750 million renewal program designed to transform the aging unit into a sleek, state-of-the-art operation.
The program will slash approximately 19 percent of its 19,000 nylon-related jobs worldwide, or 2,700 positions, by 2001.
The chemical and fiber producer expects the program to save $700 million in annual costs while doubling the return on capital expenditures.
“This program will strengthen our assets while lowering their costs and allowing them to prosper into the next century,” said Ed Van Wely, vice president and general manager of DuPont’s global nylon business, in a conference call with the press.
The renewal program is based on a three-point plan that will make significant changes to DuPont’s nylon production around the globe. Those changes include:
The addition of state-of-the-art spinning equipment beginning in 1997.
Consolidation of nylon fiber production at fewer sites worldwide.
Implementation of a “zero waste” program, to enhance production, increase quality and reduce machinery downtime.
“Nylon is very much a global business, and we need to make sure we are increasing our competitiveness globally,” Van Wely said.
DuPont has been modernizing nylon production for two years, but Thursday’s announcement marks the first time the company has committed to a structured long-range plan targeting nylon. While DuPont has had an ongoing program of renovation and upgrading, some of its nylon production facilities date to World War II. In August, DuPont said it would shut down the oldest of these plants, in Martinsville, Va., by mid-1998, at a cost of 600 jobs.
Van Wely acknowledged that nylon’s outmoded infrastructure has been a drag on growth. “In the past five years, we have seen only about 2 percent annual growth in fibers,” he said. “This program will not only help us stand our ground, but gain ground in the future. We expect to double nylon fiber sales by the year 2002.”
In North America, DuPont plans to end production of nylon apparel and some carpet fibers at its Seaford, Del., plant, while expanding the factory’s production of nylon 6,6 intermediate, or feedstocks, which are used to spin fiber. A reduction of some 600 of a total of 1,400 jobs at Seaford is expected over the next three years. Apparel fiber production at Kingston, Ontario, Canada, will also cease, with 80 positions being eliminated.
Production of nylon will be concentrated at the Camden, S.C., and Chattanooga, Tenn., sites beginning in 1999.
“By moving our nylon fiber production business centers to Camden and Chattanooga, we will have a much more aligned and entrepreneurial environment,” Van Wely said.
In addition, nylon fiber production will end and feedstock production expanded at Uentrop, Germany, and production of continuous filament fiber at Doncaster, U.K., will also end. Facilities at Gloucester, U.K., and Oestringen, Germany, will become the principal nylon fiber production sites in Europe.
DuPont said that a decision on the fate of a fiber plant in Athens, Ga., and feedstock maker at Mercedes, Argentina, could be decided in early 1997. Plans for expansion of plants in Bayswater, Australia, and Mexico are also under consideration.
“The use of state-of-the-art technology, especially in the production of apparel fibers, will significantly increase spinning speeds and reduce costs, and at reduced investment,” Van Wely said. “It will offer improved quality, uniformity in production, particularly in dyeing, and allow us a lot more flexibility to make a wider array of product offerings. It’s closer to make-to-order, and we will be able to respond more quickly to market changes.”
Van Wely admitted that these changes will also demand a new mindset, one that he terms a “high performance” business environment. “We want to see much more employee involvement and a greater focus on the customer from a motivated work force. There has to be constant communication so that we are all marching in the same direction as an organization.”