DuPont CEO Ed Breen on Tuesday said that the company is shutting down about half of its polymer capacity to deal with an expected weakness in the automotive, aerospace, oil & gas, and other industries. According to Breen, these sectors constitute the majority of DuPont’s market, especially the auto industry which accounts for 15% of the company’s sales.
Breen said that global auto builds dropped 24% in the first quarter and was estimated to slump further by 40% in the second quarter. Therefore, DuPont plans to idle and shut some units especially from its Transportation & Industrial segment to match supply with market demand. DuPont’s Transportation & Industrial segment is expected to see a 55% to 65% reduction in margins due to lower auto builds, annual price declines, and costs related to the plant shutdowns. Breen, however, did not specify which production sites to be shut.
In the first quarter, DuPont posted a $616 million net loss, compared to a $521 million profit in the same quarter last year. The company produces goods used in vehicle interiors, construction, electronics, home care, as well as sports and travel gears. These products has seen demand plunging amid efforts to contain the pandemic which forced people to stay at home, prohibited them from traveling, shut auto plants, and stalled construction activities.
