DuPont cuts reflect extent of economic slowdown

DATABASE: Virginia Layoffs

The slowdown in everything from construction to automobile sales and consumer spending has rippled back into more manufacturing job losses in the Richmond area.

DuPont Co. said yesterday that it will cut 450 to 500 jobs at its Spruance plant in Chesterfield County starting July 31.

The cuts -- part of a larger companywide reduction of 2,000 jobs -- amount to almost 20 percent of the local plant's work force. The job cuts do not affect three other Virginia plants, including two others in the Richmond area.

The layoffs come as Wilmington, Del.-based DuPont tries to save cash amid what company CEO Ellen J. Kullman last month called "the largest decline in industrial demand in decades."

This is the company's second major job reduction. DuPont eliminated 2,500 jobs and 10,000 contractor positions worldwide, including about 300 contractor positions in the Richmond area, in December.

DuPont's latest cuts may be one sign of more pain to come for manufacturing companies, many of which are in a similar position as sluggish consumer and business spending, construction and automobile sales ripple through the supply chain.

"Overall, the vast majority of manufacturers have seen a pretty precipitous decline in orders," said Brett Vassey, president and chief executive officer of the Virginia Manufacturers Association.

"They are pulling back, limiting capital investment, not hiring contractors and looking at rationalizing full-time and part-time staff and moving shifts, but doing what they can do to preserve talent."

Manufacturers such as DuPont are affected not just by the U.S. slowdown but the global economy, too, Vassey said. "Exports are not making up the difference right now."

Virginia lost about 17,600 manufacturing jobs -- a decline of about 6.6 percent -- from March 2008 to March 2009, according to Virginia Employment Commission figures.

There are no signs of a turnaround for manufacturers this year, Vassey said, but he said many industry observers and managers are optimistic that demand and orders will rebound in the first half of 2010.

DuPont's local cuts will affect about 150 to 200 salaried employees, with the rest coming from hourly staff. Dismissed employees will receive up to a year of severance depending on years of service.

Plant manager Joe Internicola said some of the reductions will come through voluntary severance and early retirement, though he could not estimate how many.

"We made every effort up to this point to preserve jobs through reducing contractor positions and redeploying people into other positions wherever possible, as well as implementing some rigorous spending controls," Internicola said yesterday. "All of those actions have helped reduce the impact, but we have to do even more."

Citing competitive reasons, Internicola declined to comment on how specific production lines are being affected.

He said the company is not discontinuing any product lines at Spruance.

"We are continuing to manufacture all of our products," he said. "We are just adjusting production rates to meet the demand. We are preserving all of our capacity as well," for when demand recovers.

Weak demand has affected products manufactured at the Spruance plant including Tyvek, a material used in construction to insulate and protect building structures and in protective clothing, packaging and envelopes.

DuPont said sales also have eroded across most markets for other Spruance-made products such as the fire-resistant material Nomex, and Kevlar, used in bullet-resistant vests and many products from sports equipment to automobile brakes.

Plant workers will have job-recall rights for up to three years, Internicola said. He also said it is possible that some of the lost jobs will return when the economy improves.

The Spruance plant "has been through many challenges in its 80-year history," Internicola said. "And I am absolutely confident that the site and our many employees are going to make the changes to position ourselves for future growth and success when the economy recovers."

Contact John Reid Blackwell at (804) 775-8123 or .