Chemours' transition plan includes Delaware layoffs

Chemours Co. will lay off workers, including some in Delaware, as part of its plan to slash $350 million in expenses by 2017. The company would not provide specifics.

"If we are going to have a net savings, there will be more people moving out than coming in at locations around the world, including here," said Chris Siemer, president of Chemours' chemical solutions business, who is overseeing the company's transition plan.

The Wilmington-based chemical business, which spun off from DuPont in July, employs roughly 700 workers in the state. A majority of those jobs are located at Chemours' downtown Wilmington headquarters with about 20 employees at a facility in Red Lion.

In August, the company announced it will cut $350 million in costs along with reviewing an acquisition or sale of its chemical solutions business to increase profits as the company struggles to find its footing post-spinoff. Chemours reported a net loss of $18 million and a 10 percent sales decline in the second quarter of 2015, its first as an independent company.

The cuts and assessment of its chemical solutions business are part of the company's five-point transition plan as the company seeks to become more competitive amid negative currency impact and less demand for its lead product, titanium dioxide. Siemer confirmed that layoffs will be part of those cuts, but did not provide specifics.

"We would expect to need less people, but I don't have the details of that today," he said. "We can't transform the company without costs coming down and people costs are part of that."

Delaware jobs at Chemours have already been reduced on two occasions. DuPont cut 5 to 7 percent of Chemours' workforce globally, including some in the First State, before the separation. In September, Chemours shut down its Edge Moor titanium dioxide plant, which employed 200 workers and 130 contractors.

Chemours employs 9,000 workers worldwide, including 600 at the Chambers Works, just across the Delaware Memorial Bridge in Salem, New Jersey.

The Edge Moor closing, which was shuttered along with a Johnsonville, Tennessee, titanium dioxide production line, will save Chemours $45 million a year, according to the company.

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Chemours will review its information technology and process system expenses, according to Siemer. However, he declined to say if those areas would be specific targets for layoffs.

"Are those areas really efficient and cost effective?" he asked. "Do they make it any easier to get the job done?"

Siemer did say some of the Delaware job losses may be offset by Chemours expansion of its research and development staff, but again did not offer specifics. Chemours leases some research space at DuPont's Stine-Haskell Research Center near Newark.

"A significant part of research and development people are local and we expect to grow in that area," he said.

Also on the chopping block is the use of third-party contractors to maintain equipment at Chemours' plants.

"We can do that ourselves," Siemer said.

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Chemours is reviewing locations for a potential world headquarters. The company has not made a permanent commitment to Wilmington and is in talks with Salem County, New Jersey and Chester and Delaware counties in Pennsylvania. A decision is expected by October 2016.

Siemer said the company is still reviewing its options.

"It is a complex decision and Delaware is still in play," he said. "I am very interested in the outcome like everyone else."

Siemer also declined to discuss Chemours' environmental liabilities. Regulatory filings said total legal and remediation costs could total $1 billion for the company. He said the liabilities are being managed, but not as part of the transition plan.

A key part of Chemours' transition plan is a review of its chemical solutions unit, which could include the sale of a business line or reinvestment in a specific product. The chemical solutions unit's sales dropped by 6 percent in the 2015 second quarter compared to the same period last year. Chemours said the stronger U.S. dollar in its overseas markets offset the unit's increased sales from its sulfur and cyanide product lines.

Siemer highlighted the unit's ingredients group, which manufactures products used in plastics, coatings, air conditioning, industrial manufacturing and oil refining, for a potential divestiture.

"The ingredient business could be more valuable to someone else rather than being someplace where we would invest," he said.

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The company has targeted its cyanide business for growth. Chemours is the world's largest producer of the chemical, manufacturing nearly a quarter of the world's supply. Cyanide is used to mine silver and gold.

Investment in Chemours' flouroproducts business, which includes Teflon and a line of environmentally friendly refrigerants, is also crucial to the company's transformation, according to Siemer.

The refrigerants are used in automobile and home air conditioning units. Sold as Chemours' Opteon line, the products went on sale in August and the company has already doubled its capacity to meet demand. Opteon refrigerants are compliant under new U.S. Environmental Protection Agency guidelines banning the use of ozone-harming chemicals.

"This is a key element of our future," Siemer said. "Demand for refrigeration is going up."

Chemours expects the products to gain widespread use in Europe, the first part of the world to adopt the use of such chemicals.

Contact Jeff Mordock at (302) 324-2786, on Twitter @JeffMordockTNJ or jmordock@delawareonline.com