Dow CEO seeks to restore company profitability

www.ourmidland.com Beth Medley Bellor , The Midland Daily News 01/13/2003

    Dow employees got more details this morning about the belt-tightening their company is facing.

    In a company-wide communication, Bill Stavropoulos, president and CEO, outlined immediate action plans to restore the company’s profitability.

    "I know many of you are anxiously awaiting detailed announcements on any organizational restructuring, portfolio changes and, importantly, the impact our actions will have on jobs within our company," Stavropoulos said, noting those answers will be provided as soon as possible. "In the meantime, let’s all focus on contributing to Dow’s success by turning our short-term plans into a first quarter that we can be proud of and that will set the pace for a 2003 that will put us well on the road to recovery."

    Energy costs continue to be a challenge for Dow. In addition to the threat of war in the Middle East and the abrupt disruption in the oil supply from Venezuela, Stavropoulos cited price increases in naphtha and natural gas liquids.

    "While we can’t control external costs, we will control internal expenses," he said. "Beginning right now, we will act to raise our prices, protect and grow our volume, and dramatically decrease our costs. Simply put, if it doesn’t improve our bottom line in 2003, we just shouldn’t do it this year."

     He outlined the first steps to protect margins in the first quarter, directing all employees to focus on decreasing costs, increasing cash flow, and improving the bottom line, while remaining safe. Those steps include:     • implementing a six-month moratorium on all new, unauthorized or engineering-only capital projects;     • enacting an immediate freeze on all external hiring and geographic relocations;     • taking swift action, business by business, to raise prices to restore margins, especially in light of the very volatile oil and energy environment; and     • delaying 2003 Service Awards until the second half of the year and suspending the Special Recognition Award / Special Achievement Award Program for the first quarter.

    Dow’s comprehensive action plan includes a complete review of all assets, possibly leading to divestiture or shutdown of those that are non-strategic or underperforming.

    Details are available at www.dow.com/dow_news/corporate/2003/20030113a.htm.