Why Dow Chemical Is Keeping A Pa. Presence
August 01, 2013
Andrew Liveris was born in Darwin, Australia, which is close to the other side of the world from Philadelphia. He now leads Dow Chemical's 54,000 employees, who make 5,000 products at 188 sites in 36 countries, many with cheaper real estate than can be found in Montgomery County.
Liveris was in Collegeville on Wednesday to wield ceremonial scissors on the chemical giant's new home, a laboratory and office complex rented from pharmaceutical giant Pfizer. With the world available, why move 800 researchers only 15 miles within the county, from Spring House to Collegeville?
"Human capital," Liveris said after the festivities. "There is a lot of talent here - we have the ability to grow it and put it all in one place. We wanted a Northeast Technology Center. It would be nonsensical to set up something in other parts."
Dow has its headquarters in Midland, Mich. In 2009, it bought Philadelphia-based Rohm & Haas Co. for $15 billion and uses its offices facing Independence Mall.
Gov. Corbett spoke to several hundred employees, encouraged those who lived in New Jersey and Delaware to move to Pennsylvania, and marveled at some of the Dow concoctions.
"Formaldehyde-eating paint?" Corbett asked. "It sounds like science fiction."
Corbett noted that states compete to attract and keep companies with highly paid employees, sometimes using payments or tax credits. "We offered, but they didn't take it," Corbett said of Dow in a meeting with reporters.
With about $57 billion in annual revenue, Dow has a few products on store shelves, but much of what it makes are specialty chemicals, advanced materials, plastics, and agricultural-based compounds used by other manufacturers.
About 40 employees will move from Chicago to Collegeville to work on Silvadur, a silver-based antimicrobial product woven into the fabric of exercise clothing to reduce the post-workout stink, even after repeated washing. Research & Development magazine named it one of the best 100 innovations of 2013.
Another factor in sticking with Pennsylvania is that Dow makes chemicals used by the growing natural-gas industry. While removing formaldehyde from paint will help reduce respiratory problems, environmental critics of hydraulic fracturing might also point to other Dow products. In a Securities and Exchange Commission filing, Dow said it had set aside $725 million for probable environmental remediation and restoration costs, including $70 million for the remediation of Superfund sites.
The conundrum of the slow recovery and persistent unemployment is that many CEOs say they don't want to hire until they can generate more revenue. But consumers still hesitate to spend because they are unemployed, fear losing a job, or are overextended. As a nation, Liveris said, "we don't have a good answer for that."
Liveris is an advocate for manufacturing, and he suspects the answer will be found in improving K-12 education, investing in community colleges, and retooling the workforce to employ the many high school graduates who won't get doctorates.
"That is what will really crack the code," said Liveris, who is cochair of President Obama's Advanced Manufacturing Partnership. "Yes, I want Ph.D.s, like the ones [in Collegeville]. But if they fix the visa issue, I'll get them here. But on the technicians, the next generation of technical employment, that is the bulk of America.
"You've got to solve it there. You can't do it at one end or the other. Menial jobs, the hamburger-flipper and the Walmart greeter, we'll have plenty of a supply of them. But the middle part is what we're talking about, and that is about the 'reskilling' of the American workforce."
Source: The Philadelphia Inquirer
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