I find it interesting how a company like Dupont can end up probably selling of their main "crown jewels" (TiO2) as a probable result of losing their significant competitive advantage. Mr. Chao and associates - some long time employees - evidently somehow were persuaded to "the dark side" and sold or gave out trade secrets of the TiO2 process. I certainly don't know all the reasons for such actions - as bad and unlawful as they are - but one might surmise that perhaps an employee who began at Dupont in 1966 might not have "felt the love" that supposedly exists within Dupont if you listen to all the propaganda from top managers of how employees are "valued and respected and blah blah blah...". Again, it is no excuse for such poor actions BUT what culture exists these days that possibly prompts such things??
Is it a culture of the top managers having no accountability but getting huge financial rewards while the everyday engineer and worker plods along constantly worried about their job and the business they are in?
Is it a culture of "let me get promoted and move on" and not worry about the stupid decisions that were made while I had "such and such responsibility"?
What TiO2 VP or upper level manager was in charge that allowed one or two individuals have such "top secret" knowledge yet run astray? (I know if it were my DSDD Company there would be some VP's and others on the street immediately for not clearing understanding the role of properly "managing people". Perhaps some negligent managers and VP's were dismissed over such a faux pax - I have no idea.)
Are there not better controls within this "scientific company" that would prevent such actions?
Do Dupont managers really, I mean REALLY, understand their people and how to manage them? I tend to think Dupont doesn't put "leaders" in top positions but rather bureaucrats. Leaders inspire - bureaucrats "manage".
Finally, how can Ms. Cullman still have her job after a loss of such an important business?
You make many excellent points. While one cannot fully excuse anyone who commits industrial espionage, clearly DuPont bosses have created a "me, me first, and me only" culture. The employees have been getting screwed since Edgar's days. He slashed some 40,000 jobs, sold businesses on a whim, then left us with Chad.
If Chad had done nothing more than a Rip Van Winkle and fallen alseep for years, the company would still be alright. But the JACKASS sold Conoco, and at the worst possible time (when oil was below $25 per barrel). Buying Pioneer MIGHT have worked if Wilmington had taken a hands-off approach. BUT...Chad had Captain Kirk run Pioneer and Ag into an asteroid belt. Chad then waited too long to sell Invista.
As bad as this all was, Ellen Kullman (internally, she has earned the nickname Smellen, and also Cull-Men) made it worse - if that was even possible!
Dumping DPC (again waiting too long until the market for it cooled off) was telegraphed for too long, to investors and employees alike.
Laughably, the Danisco acquisition is going through the same nuclear meltdown that Pioneer did. DuPont bosses, imported from Wilmington, sucked the life out of this decent company in less than two years. The engineering and science brains and the sales force left for competitors (who know - maybe with secrets too, like were lost with TiO2). Inside the company, most people mumble (out of fear from Ellen's gestapo) about how bad and how fast Danisco was disemboweled.
TiO2 could have received a premium two years ago. Now, potential buyers know that the secrets have been stolen without impunity by the Chinese and DuPont has larded it with overhead. DuPont will LOSE if they sell it (for 50 cents on the dollar), or LOSE if they keep it. Poor folks in Edge Moor are ready to jump ship.
Lastly, an analyst (one of the smart investors), asked point-blank why Ellen wouldn't spin off Ag&Nut know and become strictly a powerhouse enzymes and chemicals company. She blacked out
I would guess any company can be the victim of corporate espionage, so I do not find that indicative of any mismanagement. There will always be bad people with opportunity. It is better to be feared than loved, because no amount of love will ensure 100% integrity.
Instead, I postulate DuPont is a great strategic buyer: long term, everybody has to eat; feed and seed is a great strategy. But DuPont is a short term cash manager: cut costs to meet tomorrow’s investor call, next week will take care of itself.
Investors provide incentives that are opposed to long term strategy, they reward short-sighted and near instant gratification behaviour. Many Fortune 500 companies are in the same boat. Few investors are Warren Buffet, most dream of being Al Dunlap.
So to analogize, DuPont buys the most reliable topnotch new car then fails to change the oil regularly – using it just as transportation to get cash for the next car purchase. Only to trade it in or cash it out at a bargain rate for the next owner.
TiO2 had a great run. Teflon had a great run… but so did Nylon. Someone else will make a killing on these businesses, just like the Koch’s did on Nylon. Someday, Pioneer will be sold to finance the Holodeck purchase (pardon the Star Trek reference).
I tend to agree with your summary. I just find it sad that DD culture tends to kill the passion for excellence and once the passion is gone you can't recreate it very easily. I think DD had "lightning in a bottle" in several businesses but then the wizards from Wilmington showed up and low and behold they forgot to do some simple stuff - like putting a cork in it.