Midland awaits Dow-Dupont deal impact
It is too early to tell how the pending mammoth merger between chemicals giants Dow Chemical Co. and DuPont Co. could affect Midland, Michigan, according to company officials. But a spokesman said the $73 billion merger approved Thursday by the U.S. government could bring growth, new roles and new jobs to the town that Dow built.
“It is too preliminary to comment on broader impact at this time, but we expect to grow the materials sciences business — which will be the ‘New Dow’ and headquartered in Midland — by combining low-cost integration and innovation with expanded customer offerings in key growth segments,” Jarrod Erpelding, Dow spokesman, said Friday in a statement. “This may lead to new roles and new employment opportunities in the future.”
Dow Chemical Co. is currently headquartered in Midland, where the company was founded in 1897. The Dow-Dupont plan would break the merged company into three independent companies within 18 months of closing. The new company — to be known as DowDupont Inc. — will have dual headquarters in Midland and Wilmington, Delaware.
One of the break-out companies — the materials-science company that’s being called “New Dow” for now — would be headquartered in Midland. The other two post-split companies would focus on agriculture and specialty products and be headquartered in Wilmington.
Erpelding said the companies still need to obtain antitrust approval from authorities in Mexico, Canada and other countries.
Dow employs more than 5,000 workers in Midland, including about 1,600 at its headquarters. It employs about 56,000 people worldwide.
While Midland city officials were quick to call the merger and subsequent split a boon for Midland, company officials said the broader impact of an approved merger remains to be seen. The companies expect to save $3 billion and generate $1 billion in new value as a result of the merger.
“This merger will create more jobs not only for Midland but our region,” Becky Church, vice president of operations with Midland Tomorrow, which is under the Midland Area Chamber of Commerce, told The Detroit News. “We see great opportunity for businesses to prosper here because of the combined entities.”
The city and the company are almost irreversibly tied together. Midland was built on Dow. Dow invests in the city, and city officials work to make sure the manicured stretch of downtown is full of shops and restaurants, the schools are competitive and attractions, like the Midland Center for the Arts, exist in the small mid-Michigan town.
Last year, shortly after the merger was approved by shareholders, Midland city officials and union leadership expressed cautious optimism when asked about potential results of the merger. Midland Mayor Maureen Donker said then it was too early to tell what will happen if the merger is approved. Michael Sharrow, Midland Public Schools superintendent, said the community was trying to remain positive.
At the time, Dow Chemical had recently — and in an unrelated move — acquired Dow Corning Co., which resulted in 700 job cuts in Midland.
Kent Holsing, president of United Steelworkers Local 12075, which represents about 750 Dow Chemical Co. laborers in Michigan, said Thursday that he doesn’t anticipate bargaining employees will face job cuts soon. However, concerns remain about what happens when the merged companies are split.
“There’s still a lot of apprehension because we don’t know exactly what that’s going to look like yet,” he said Thursday night. “I told the membership we’re not expecting any major changes to what we do today as a result of the (deal) close, but once they close, they’re going to start getting everything in place to spin off these companies. They will start to identify which employees will go where.”
Detroit News Staff Writer Mark Hicks contributed.