“The pink slips were placed in the stockings with care…”
This is going to be a bittersweet Christmas for thousands of Delawareans who are facing the prospects of being unemployed, slashed at the hands of greedy investors pushing short-term profits over long-term stability.
Late last week, it was announced that DuPont Central Research & Development, one of the most successful research organizations in the world of chemistry, was shutting down. Hundreds of high-paying research and development jobs are simply going to vanish, gone before Santa even hops into his sleigh.
It’s anyone’s guess what’s going to happen to the research labs at DuPont’s Chestnut Run facility and the Experimental Station, but one thing is certain – dark days for tiny Delaware are ahead.
Separate from the move, it was announced that Pioneer, DuPont’s hybrid seed unit, will leave Delaware by next March. This move will eliminate several hundred more positions at DuPont’s Experimental Station near Alapocas, and halt work on a new soybean research center at Stine Haskell.
This of course comes on the heels of news that DuPont will merge with Dow Chemical, where the two will combine into a mammoth $130 billion conglomerate called DowDuPont (I recommended DuPow) before splitting into three independent, publicly traded companies that should please anti-trust regulators as much as it does investment bankers (who will get a very nice Christmas bump in their short-term returns).
The rest of us are left scratching our heads, trying to figure out how to cheer an economy that places more value on corporate engineering than it does employees, research budgets and the 331 years of combined stability, success and innovation these two companies have provided our country.
DuPont is the fourth-oldest Fortune 500 firm, and in a couple of months it will barely exist as we know it – file it under “quarterly capitalism”
I understand the economic reasons why something like this merger can happen. Our economy, while growing, isn’t growing fast enough to keep shareholders happy. And today’s shareholders, typified by activist investors like Nelson Peltz of Trian Fund, aren’t satisfied with organic growth and are putting more and more pressure on companies to focus on the short-term maximization of profits (usually through mergers and layoffs).
As the Wall Street Journal’s Dennis Berman brilliantly described, Peltz and his people “patrol the markets like prison guards with billy clubs.”
These investors are sucking companies like DuPont dry at the expense of innovation and investment, while relegating the value and well-being of their employees to a distant afterthought.
DuPont’s main flaw in a service-based economy is that it actually made stuff and it invested a lot of money into researching how it could make stuff better. DuPont invented nylon and Teflon. Dow created Styrofoam.
But today’s investors shutter at the money lost down the hole of research. According to Fortune, the number of publicly traded companies whose scientists publish in academic journals was down nearly two-thirds from 1980. To put it another way, corporations and their investors value basic science less now than they did 35 years ago, and are simply demanding less of it.
Not to go all ‘Trump’, but that has to make Chinese companies like Sinopec downright giddy.
As I prepare to join my family for Christmas, Clement Clarke Moore’s “A Visit From St. Nicholas” keeps dancing around in my head, but with new lines informed by my feeling about the loss of DuPont at the hands of greedy investors:
Peltz spoke not a word, but went straight to his work,Filling his stocking with cash, what a jerk,Laying his middle finger aside his nose,As the stock prices for DuPont quickly rose;He sprang to his limo, to his team gave a whistle,As pink slips descended like holiday tinsel,Laid-off workers heard him exclaim as he drove out of sight,“Happy Christmas to me, I did all right.”
Rob Tornoe is a cartoonist and WHYY contributor. Follow Rob on Twitter @RobTornoe