E.I. du Pont de Nemours and Company | A New Focus for a New Century
A New Focus for a New Century
In 1998 DuPont announced its intention to sell Conoco, a divestiture that became part of a sweeping restructuring program that had as profound an effect on the organization as its transformation a century earlier from explosives to chemicals manufacturing. The individual who led the company during this period of redefining itself was Charles O. "Chad" Holliday, a career DuPont executive who was named president in 1997, chief executive officer the following year, and chairman in 1999. Holliday's mission centered on using DuPont's legacy in chemistry, begun in 1902 during the company's first great transformation, and using it to usher in a new era of DuPont innovations in bioscience. For years, the company had lacked a breakthrough product to drive its sales and earnings growth. Stainmaster fabric protection, introduced in 1986, was the last of the company's line of synthetics (Nylon, Lycra, Dacron, Mylar, Kevlar, etc.) to become a household name. The company, according to the February 3, 2003 issue of Forbes, had suffered from "an overemphasis on 'new-and-improving' its old brands," creating a "mix of mediocrity, malaise, and investor ambivalence." To inject vitality into the company, Holliday demanded that new synthetics be developed, synthetics that would use biological materials rather than the oil-based ingredients that formed the basis of DuPont's pioneering work in the 20th century. The company, for example, directed its resources at developing Sorona—described as a "cousin" to polyester—that used a polymer derived from corn, not petroleum. Fittingly, given the company's new orientation toward bioscience, the 1999 spinoff of Conoco occurred at roughly the same time Holliday spent $7.6 billion to acquire Pioneer Hi-Bred International Inc., the world's largest producer of hybrid corn and soybean seeds. The year also marked the official recognition of the addition of biology to chemistry as DuPont's core science platform. The company's corporate brand identity, which had been expressed in the slogan "Better Things for Better Living," was changed to "The Miracles of Science."
The company's far-reaching restructuring program occupied Holliday's attention in the years before and after DuPont's 200th anniversary. Between 1998 and 2004, the company's divestiture and acquisition transactions totaled $60 billion, a period that saw its annual revenue volume drop from $45 billion to $27 billion and its workforce cut from 98,000 to 55,000. Holliday had decided to exit the drug business, selling the company's pharmaceutical division in 2001 to Bristol-Myers Squibb for $7.8 billion, and he sold the company's textile fibers business in 2004 to Koch Industries for $4.2 billion, which had been responsible for 25 percent of its annual revenue. DuPont was leaner, focused on execution and efficiency, and intent on achieving 6 percent annual sales growth and 10 percent annual earnings growth. To help achieve this goal, Holliday established a target of achieving $900 million in cost savings by 2005, a figure the company was "on track to significantly exceed," according to the September 20, 2004 issue of Chemical Market Reporter. An analyst who had attended the company's annual shareholder meeting confirmed the assessment, telling Chemical Market Reporter, "We came away with the distinct impression that DuPont had gotten its house in order and both top-line and bottom-line growth are improving." Holliday offered his own assessment in the same article, expressing an optimistic tone as DuPont began its third century of business. "We've been working for six years to put in place the right business mix and the right set of operating processes in this company to deliver our long-term goals. We now have both in place to move us forward. We are clearly in the deliver and execute mode."