DUPONT’S WOOLARD TELLS ATMI INDUSTRY IS A GLOBAL BATTLEFIELD
Byline: S. Gray Maycumber
NEW YORK — “We are in a global war. If you’re not positive you’ll win in this global war, there is a good chance you’re losing it.”
That was the battle cry sounded by Edgar Woolard, chairman and chief executive officer of DuPont, as the final speaker at the American Textile Manufacturers Institute’s annual meeting. The parley ran through Saturday in Palm Beach.
In his talk, Woolard outlined the steps and, in some cases, missteps in DuPont’s recent three-year reorganization and related it to what is needed for most companies in the fabric and fiber industries to survive in a global economy.
“I believe without a doubt that the stiffest competition in the next decade will come from parts of the world that are just developing, using technology that hasn’t been invented yet,” he said. “Companies from these areas don’t have to adapt to a changing environment, they don’t have to unlearn anything. All of their energies are going into winning the contest. Winning the contest for them is knocking you out of your business and us out of ours.”
“Globalization of the textile industry is a fact of life,” Woolard said. “Global sourcing is a reality.”
Major factors in this contest, he said, are the increase in the sophistication of information technology and the decrease of trade barriers.
But Woolard believes that “this is a great opportunity to use the technology to repatriate more and more apparel sourcing back to the U.S. — if we can be competitive and creative.” He said, “We must think of different ways to do it.”
He added, “We must try to shape markets the way we want them to be instead of reacting to what they are going to be.”
As an example, he cited the Swatch Watch of Switzerland. That country had lost a great deal of its watch business to Asia but won a chunk back with the Swatch watch he pointed out. While describing the reshaping of DuPont, particularly its fiber operations, to prepare for global challenges, Woolard, however, pointed out that “restructuring and reshaping will not be sufficient alone to succeed long term. We must also revitalize our companies.”
For DuPont, Woolard said, “The last few years have been a big learning experience.
“One of the first lessons was that it was an absolute necessity to face reality. When we did, we saw a company with too much cost and some unfocused businesses. We were losing our ability to compete. We were fat, lazy and blind.”
Calling the restructuring, “one of the most dramatic changes in DuPont’s 105 years,” Woolard noted that it included a reduction in fixed costs by $3 billion to $10 billion last year, when “We had the most successful year in DuPont’s history, with record earnings on sales up by 6 percent.”
This included a reduction in the fixed cost of Dacron polyester “by $100 million.” “What have we done with that $100 million? We have taken this and put it back into the business — modernizing our Dacron…facilities. Altogether, we have put back $400 [million] — $500 million back into the polyester business to make it world competitive,” Woolard said.
He noted the work by Rich Angiullo, vice president and general manager of the worldwide Dacron business, in reducing costs, but said, “Now we are now fighting escalation in costs of ingredients.”
Noting past speculation that the major fiber businesses, particularly polyester, were considered mature businesses from which companies such as DuPont might move away, Woolard said, “It continues to be an excellent business for us, and it strongly reflects our goals of continuing technology improvement, world-class competition and global growth. We remain highly committed to our fiber business in our continuing efforts to be world-class competitors.”
He added, “I don’t believe that there are mature businesses, only mature people that don’t have the creativity to make businesses grow.”