Dow to Cease Most Research Operations in W.Va.

This article appeared in the Dec. 4, 2007, edition of the Charleston Daily Mail.


By George Hohmann
Daily Mail Business Editor

The Dow Chemical Co.'s Union Carbide Corp. subsidiary today announced that it will cease most of its research and development operations in West Virginia.

The company will reduce its research staff at the South Charleston Technical Center from 250 to 100 over the next two years, Allan Fowler, Dow's top manager in West Virginia, said today.
The 150 jobs that will be eliminated are generally held by people with advanced degrees and typically pay $100,000 or more per year, Fowler said.

Fowler said it is "a difficult announcement for us," given the fact that the technical center has for decades been known as the Kanawha Valley's research and development jewel.

The 100 research jobs that will remain support Dow's most expensive assets at the technical center, its large-scale pilot plants and licensing businesses, Fowler said.

"Will they be here 20 or 25 years from now? That's a valid question," he said. "We do not know how long they will be here. They are delivering technology to the company today, doing what they need to do. Just as we evaluate every asset on an ongoing basis, we'll continue to evaluate those."

Fowler said that when the downsizing announced today is complete, Dow will have 550 employees in West Virginia. "We still have a substantial manufacturing base" in the Kanawha Valley, he said. "This does not impact manufacturing or licensing."

Today's announcement was part of a series of moves by Dow around the world that will result in a total reduction of about 1,000 jobs across several functions, geographies and businesses.

The company said in a prepared statement, "Across the functions, the most significant impact will be felt in research and development, particularly at the Union Carbide Corp. site at South Charleston, W.Va., and in our North American Customer Service group, primarily in Midland (Mich.)."

Dow spokeswoman Anne Ainsworth said an evaluation of the company's global assets shows that 70 percent of Dow's research and development assets are in the United States. "At this point, with Dow's growth and expansion globally, we needed to make sure our R&D activities and operations expanded to follow the company's growth and businesses and customers around the world," she said.

Kanawha County Commission President Kent Carper called Dow's announcement sad. It is hard to accept, he said. "The idea that companies like this have profited greatly and then move their manufacturing overseas, then to follow it with their R&D, is a bitter pill," he said.

South Charleston Mayor Frank Mullins said, "It's obviously disappointing any time something like this happens to a community. Even though we're very disappointed with this announcement, we have a lot going on in South Charleston.

"I'm optimistic that we have a bright future," Mullins said. "We have the reopening of the stamping plant, which is going very well, and we have the redevelopment of the fly ash pond. I have a meeting next week with FMC Corp. representatives about the future of the property where the steam plant is being torn down, which will free up eight acres of prime property along the Kanawha River.

"In a nutshell, we're obviously disappointed when something like this is announced but it's not doom and gloom in this community. We have a bright future."

Employment at the tech center peaked in the late 1960s at about 3,600. In 1999, when Union Carbide celebrated the tech center's 50th anniversary, the tech center employed 1,900.

In August 1999, when Dow announced plans to buy Union Carbide Corp., Carbide employed a total of 2,409 people in the Kanawha Valley. After Dow completed the purchase in 2001, the company's West Virginia operations - including the tech center - went through a series of downsizings because of global market changes. Dow now employs about 800 in the Valley. That number was already scheduled to decrease by about 100 as a downsizing announced last year continues to occur.

Earlier this year, Dow gave West Virginia University 58 acres and several laboratories in the 681-acre technical park, including a 125,000-square-foot building currently used as a multi-tenant research and development incubator. Dow valued the gift at $25 million.

Fowler noted today that although Dow's presence at the tech center is shrinking, the presence of WVU; the Mid-Atlantic Technology Research and Innovation Center, known as MATRIC; West Virginia State University; and the Chemical Alliance Zone is growing.

"Perhaps this is the phoenix of what's going to happen to the tech park over the next couple of years - that Union Carbide is going to be replaced by WVU and MATRIC," he said.

Dow Chairman and Chief Executive Officer Andrew Liveris said in a prepared statement, "These difficult, yet necessary decisions are part of our broader agenda to strengthen Dow's long-term competitiveness and drive transformational growth.

"We understand the uncertainty and anxiety that these decisions will cause our employees, their families and the impacted communities," Liveris said. "Our leadership teams will work closely with those affected to minimize the impact of these changes and to address questions and concerns."

Charles Kresge, Dow's research and development vice president, said in a prepared statement, "The technology park has written its share of R&D history with nearly 60 years of continuous operations. Scientists working here have produced some 30,000 patents over the years. I am personally committing that throughout this process, Dow and Union Carbide will treat employees fairly and with compassion, dignity and respect."

Dow has annual sales of $49 billion and employs 43,000 people worldwide.

Dow, WVU announce plans for WVU Charleston Research Campus

Union Carbide Corp. (UCC), a wholly-owned subsidiary of The Dow Chemical Company (Dow), and West Virginia University signed an agreement today (Aug. 20) that will establish a research campus on 58 acres of donated property located at UCC’s Technology Park in South Charleston.

The signing ceremony, held at the state Capitol, was attended by Gov. Joe Manchin who helped guide the donation and agreement.

“Union Carbide successfully nurtured a world-class reputation at the Technology Park for research and development,” Manchin said. “West Virginia University, as a growing leader in the area of higher education research, is well poised to continue that initiative. This is a winning situation, not only for UCC and WVU, but for the state of West Virginia.”

The agreement also includes the donation of several research and development laboratories to the University, including a 125,000 square foot building currently in use as a multi-tenant research and development incubator.

“This donation on the part of Dow demonstrates our commitment to the importance of academic research and the ability for collaboration,” said Allan Fowler, vice president of West Virginia Operations of Dow. “We applaud WVU and the state of West Virginia for their partnership in the development and growth of this research campus.”

The WVU Charleston Research Campus (WVUCRC), as it will be known, will serve as a center of research and economic development focusing on energy and chemical technology. Initially, WVU will relocate its Charleston extension and extended learning offices to the property. In the future, it expects to develop research and academic initiatives benefiting residents of the Charleston area.

“We are most appreciative of the farsightedness and collaborative efforts of Union Carbide Corporation, its parent Dow Chemical Company, and the leadership team at WVU in structuring this gift to the University,” said WVU President David C. Hardesty Jr. “It has been a major effort, but all have worked together to make this day possible. We also recognize and appreciate Gov. Manchin's help in making such a major donation possible. His leadership at critical times has made a meaningful difference.”

Due to global market shifts impacting its businesses, Dow has been migrating and consolidating operations to other locations in the U.S. and the world. These changes have created available assets in the Kanawha Valley, Fowler said.

The initiative for the research campus was led by WVU beginning in early 2006 with the desire to expand its research capabilities and aid economic development in the Charleston area.

“In recent years, the importance of economic development and economic diversification to our state has become increasingly evident,” Hardesty said. “Research is often associated with job growth and diversification. It is our hope that the creation of a research park by WVU in Charleston will draw jobs and dollars to the Greater Kanawha Valley and help to strengthen the overall economy of West Virginia.”

WVU Provost Gerald Lang and Vice President for Research and Economic Development John Weete led the effort on behalf of the University, Hardesty noted. Closing of the donation transaction is expected to be complete by early fall.

Caption: Union Carbide Corp. (UCC), a wholly-owned subsidiary of The Dow Chemical Company (Dow), and WVU signed an agreement Monday that will establish a research campus on 58 acres of donated property located at UCC's Technology Park in South Charleston. The agreement also includes the donation of several research and development laboratories to the University, including a 125,000 square foot building currently in use as a multi-tenant research and development incubator.