Early history Dow was founded in 1897 by chemist
Herbert Henry Dow, who invented a new method of extracting the
bromine that was trapped underground in
brine at Midland, Michigan. The company originally sold only
bleach and
potassium bromide, achieving a bleach output of 72 tons a day in 1902. Dow survived by also cutting its prices and, although losing about $90,000 in income, began to diversify its
product line. In 1905, German bromide producers began dumping bromides at low cost in the U.S. in an effort to prevent Dow from expanding its sales of bromides in Europe. Instead of competing directly for market share with the German producers, Dow bought the cheap German-made bromides and shipped them back to Europe. This undercut his German competitors. Even in its early history, Dow set a tradition of rapidly diversifying its product line. Within twenty years, Dow had become a major producer of
agricultural chemicals, elemental
chlorine,
phenol and other
dyestuffs, and
magnesium metal. Dow hired
Charles J. Strosacker, another
Case alumni, in 1907. During
World War I, Dow supplied many war materials that the United States had previously imported from Germany. Dow produced
magnesium for incendiary flares,
monochlorobenzene and
phenol for explosives, and bromine for medicines and tear gas. By 1918, 90 percent of Dow's production was geared towards the war effort. At this time, Dow created the diamond logo that is still used by the company. After the war, Dow continued research in magnesium, and it developed refined automobile pistons that produced more speed and better fuel efficiency. The Dowmetal pistons were used heavily in racing vehicles, and the 1921 winner of the
Indianapolis 500 used the Dowmetal pistons in his vehicle. while receiving treatment at the
Mayo Clinic in Minnesota. He had personally received over 90 patents and was awarded the
Perkin Medal the January before his death.
Diversification and expansion Willard Dow Willard Dow was born in 1897, the year his father founded Dow Chemical. He was the oldest boy and his father required him to work in every department at the Midland plant to expand his knowledge of the company. In 1922, Willard was named a company director and became general manager of the Dow plant in 1926. Dow invested heavily in research and development during the
Great Depression.
Magnesium In just eight months from 1940 to 1941, Dow built its first plant in
Freeport, Texas, to produce
magnesium extracted from
seawater rather than underground
brine. The Freeport plant is Dow's largest site, and the largest integrated chemical manufacturing site in the country. The site grew quickly – with power, chlorine, caustic soda and ethylene also soon in production. When Japan
attacked Pearl Harbor in December, the plant was the primary source of magnesium in the United States. After the attack, the U.S. government asked Dow to step up its magnesium production. Dow doubled its capacity in Freeport, built a second plant in Velasco, Texas, and added two new plants on the shores of Lake Michigan and Lake Huron in Michigan. In 1942, a critical year in gaining air supremacy over Europe, Dow-operated plants produced 84 percent of the nation's magnesium output. Growth of this business made Dow a strategic company during World War II.
Plastics & foam Dow produced several plastics used by the military in World War II, such as Ethocel, foamed polystyrene (marketed as styrofoam), and
Saran, later sold to consumers as Saran Wrap.
Dow Corning In 1943, Corning Glass Works (now
Corning Inc.) and Dow formed
Dow Corning, established to explore
silicone products for military use. Their first product was Dow Corning 4 Compound, an ignition-sealing compound that allowed airplanes to fly at high-altitudes. After the war, Dow Corning began producing products for civilian use and became the largest producer of silicone products in the world.
Post War Carl Gerstacker was discharged from the Army in 1946 as a Major and returned to Dow in Midland. He was a production engineer
Airplane crash Dow President and CEO
Willard Dow died in an airplane crash on March 31, 1949.
Leland Doan was named Dow president; Earl Bennett, father-in-law of Willard's brother (
Alden B. Dow) became board chairman; general manager was Dr. Mark Putnam; Calvin Campbell was named secretary and Carl Gerstacker was selected as treasurer. Gerstacker was named vice-president in 1955 and joined Dow's executive committee the following year. He was named chairman of the board in 1960. Leland Doan reached Dow's mandatory retirement age in 1962 and stepped down. During his 13 years at the helm, employment at Dow more than doubled to 31,000 from 14,000, and sales soared to $890 million from $200 million.
Ted Doan Ted Doan rapidly climbed the company ladder and followed his father, becoming president when he was 40 years old. Doan began an open-door policy for employees, placed higher emphasis on research, and held the attitude that their employees were the company's strength. Those policies continued after Doan's departure from Dow. Doan periodically visited the research labs at Dow and was always interested in the work of each employee.
Overseas When Dow realized that constructing manufacturing facilities in other countries created demand, they began producing plastics in Germany, Greece, Spain and Italy. The largest investment was in the
Netherlands, at
Terneuzen. That chemical complex opened in 1965. Plants were also built in South America: Argentina and Colombia plus
New Zealand. It really wasn't "retirement" for him; he was only 48. He remained on Dow's board of directors and
Dow Corning Corporation's board until 1987.
Ben Branch In 1971, Ben Branch became president and CEO. In the post-war era, Dow began expanding outside of North America, founding its first overseas subsidiary in
Japan in 1952, and in several other nations soon thereafter. Based largely on its growing plastics business, Dow opened a consumer products division, beginning with Saran wrap in 1953.
Nuclear weapons From 1951 to 1975, Dow managed the
Rocky Flats Plant near
Denver, Colorado. Rocky Flats was a nuclear weapons production facility that produced
plutonium triggers for
hydrogen bombs.
Contamination from fires and
radioactive waste leakage plagued the facility under Dow's management. In 1957 a fire burned plutonium dust in the facility and sent radioactive particles into the atmosphere. According to the Appellate Court, the owners of the 12,000 properties in the class-action area had not proved that their properties were damaged or they had suffered bodily injury.
Vietnam War: napalm and Agent Orange helicopter spraying Agent Orange over agricultural land during the
Vietnam War The
United States military used
napalm bombs during the
Vietnam War until 1973. Dow was one of several manufacturers who began producing the napalm B compound under government contract from 1965. After experiencing protests and negative publicity, the other suppliers discontinued manufacturing the product, leaving Dow as the sole provider. The company said that it carefully considered its position, and decided, as a matter of principle, "its first obligation was to the government". Despite a
boycott of its products by anti-war groups and harassment of recruiters on some college campuses, Dow continued to manufacture napalm B until 1969. In 2012,
Monsanto agreed to a $93 million settlement as a result of a case pursued by ex-Monsanto employees and citizens in the city of Nitro, WV. In 1949, a chemical plant in Nitro experienced an explosion that damaged a tank containing
2,4,5-T, one of the composites that is used in the production of Agent Orange. The settlement of the case included $9 million for the cleanup of affected homes in the area, and $84 million to cover the medical monitoring and treatment of people affected by the explosion, as well as legal costs for the claimants. No care has been given for the in state damage done by the Headquarters in Midland, Michigan, and they refuse to give the evidence to the community.
Dow Corning breast implants A major manufacturer of silicone
breast implants,
Dow Corning (Dow Chemical's Joint Venture with
Corning Inc.) was sued for personal damages caused by ruptured implants. On 6 October 2005, all such cases pending in the District Court against the company were dismissed. A number of large, independent reviews of the scientific literature, including the
Institute of Medicine in the
United States, have subsequently found that silicone breast implants do not cause breast cancers or any identifiable systemic disease.
Bhopal disaster ,
India, 2010 The Bhopal disaster occurred at a pesticide plant owned by Union Carbide India Ltd., a subsidiary of
Union Carbide, in 1984. A gas cloud containing methyl isocyanate and other chemicals spread to the neighborhoods near the plant where more than half a million people lived. The government of
Madhya Pradesh confirmed 3,787 deaths related to the gas release. The leak caused 558,125 injuries, including 38,478 temporary partial injuries and approximately 3,900 severely and permanently disabling injuries. Union Carbide was sued by the
Government of India and agreed to an out-of-court settlement of US$470 million in 1989. Dow Chemical acquired Union Carbide in 2001. Activists want Dow Chemical to clean up the site which is now controlled by the state of
Madhya Pradesh.
DBCP Until the late 1970s, Dow produced
DBCP (1,2-dibromo-3-chloropropane), a soil fumigant, and
nematicide, sold under the names the Nemagon and Fumazone. Plantation workers who alleged that they were sterilized or suffered other afflictions subsequently sued both Dow and
Dole Foods in Latin American courts. The cases were marred by extensive fraud, including the falsification of test results and the recruitment of plaintiffs who had never worked at Dole plantations. While Nicaraguan courts awarded the plaintiffs over $600 million for damages, they have been unable to collect any payment from the defendants. A group of plaintiffs then sued in the United States, and, on 5 November 2007, they were awarded $3.2 million by a jury in Los Angeles. Dole and Dow vowed to appeal the decision. On 23 April 2009 the two cases against Dole and Dow were thrown out by a judge in Los Angeles due to fraud and extortion by lawyers in Nicaragua recruiting fraudulent plaintiffs to make claims against the company. The ruling casts doubt on $2 billion in judgments in similar lawsuits.
Tax evasion In February 2013 a federal court rejected two tax shelter transactions entered into by Dow that created approximately $1 billion in tax deductions between 1993 and 2003. The court wrote that the transactions were "schemes that were designed to exploit perceived weaknesses in the tax code and not designed for legitimate business reasons". The schemes were created by
Goldman Sachs and the law firm of
King & Spalding, and involved creating a partnership that Dow operated out of its European headquarters in Switzerland. Dow stated that it had paid all tax assessments with interest. The case was against the Internal Revenue Service seeking a refund of the taxes paid. The case was appealed to the 5th Circuit court, where Dow's claims were again rejected. Dow has petitioned for an
en banc hearing by the 5th Circuit, arguing that the decision was contrary to established case law.
Price fixing Dow Chemical was implicated in a price-fixing scheme that inflated the cost of
polyurethane for customers. The U.S. Justice Department closed an investigation in 2007 without charges or recommendations, but a class-action civil lawsuit won at a jury trial in 2013. Dow settled the suit in 2016 for $835 million.
Recent mergers, acquisitions and reorganization 1990s – transition from geographic alignment to global business units In the early 1990s, Dow embarked on a major structural reorganization. The former reporting hierarchy was geographically based, with the regional president reporting directly to the overall company president and CEO. The new organization combines the same businesses from different sites, irrespective of which region they belong (i.e. the vice president for Polystyrene is now in charge of these plants all over the world).
DowBrands In 1998,
S. C. Johnson & Son purchased Dow Chemical's DowBrands consumer products division, based in
Indianapolis. The two business units included
Home Food Management with
Ziploc,
Saran and Handi-Wrap;
Home Care Products Fantastik,
Scrubbing Bubbles and Spray'N Wash. The sale reflected a shift in Dow's business focus by concentrating on specialty and industrial materials.
Union Carbide merger At the beginning of August 1999, Dow agreed to purchase
Union Carbide Corp. (UCC) for $9.3 billion in stock. At the time, the combined company was the second largest chemical company, behind DuPont. This led to protests from some
stockholders, who feared that Dow did not disclose potential
liabilities related to the Bhopal disaster.
William S. Stavropoulos served as president and chief executive officer of Dow from 1995 to 2000, then again from 2002 to 2004. He relinquished his board seat on 1 April 2006, having been a director since 1990 and chairman since 2000. During his first tenure, he led the purchase of UCC, which proved controversial, as it was blamed for poor results under his successor as chief executive officer, Mike Parker. Parker was dismissed and Stavropoulos returned from retirement to lead Dow.
2006–2008 restructuring On 31 August 2006, Dow announced that it planned to close facilities at five locations: •
Sarnia, Ontario was Dow's first manufacturing site in Canada, located in the Chemical Valley area alongside other petrochemical companies. In 1942, the Canadian government invited Dow to build a plant there to produce styrene (an essential raw material used to make
synthetic rubber for World War II). Dow then built a polystyrene plant in 1947. In August 1985, the site accidentally discharged 11,000 litres of
perchloroethylene (a dry cleaning solvent) into the
St. Clair River, which gained infamy in the media as "The Blob", and Dow Canada was charged by the Ministry of the Environment. Up to the early 1990s, Dow Canada's headquarters was located at the Modeland Centre, and a new three-story complex called the River Centre was opened up on the Sarnia site in 1993 to house Research and Development. Since then, several plants (Dow terminology for a production unit) on the site have been dismantled, particularly the Basic Chemicals including Chlor Alkali unit whose closure was announced in 1991 and carried out in 1994 which affected nearly half of the site's employees. The Dow Canada headquarters were moved to
Calgary, Alberta in 1996, and the Modeland Centre was sold to
Lambton County and the City of Sarnia with Dow leasing some office space. The Dow Fitness Centre was donated to the
YMCA of Sarnia-Lambton in 2003. The Sarnia Site's workforce declined from a peak of 1600 personnel in the early 1990s to about 400 by 2002. In the late 1990s, land on the site was sold to
TransAlta which built a natural gas power plant that begun operations in 2002 to supply electricity to the remaining Sarnia site plants and facilities, so that Dow could close its older less efficient steam plant (originally coal fired and later burning natural gas). On 31 August 2006, Dow announced that the entire Sarnia site would cease operations at the end of 2008. The Sarnia site received their ethylene from a
western Canada pipeline but
BP representatives advised Dow that the pipeline supply should be suspended for safety, and the loss of an affordable supply for the low density polyethylene plant rendered the remaining plant operations non-competitive. The Low-Density Polyethylene and Polystyrene units closed in 2006, followed by the Latex Unit in 2008, and finally the Propylene Oxide Derivatives Unit in April 2009. Dow afterward focused its efforts on the environmental remediation of the vacant site, which was sold to TransAlta. • One plant at its site in
Barry (South Wales), a triple string STR styrene
polymer production unit. Integral in the company's development of the super high melt foam specific polymers & Styron A-Tech high gloss, high impact polymers. • One plant at its site in
Porto Marghera (Venice), Italy. • Two plants at its site in
Fort Saskatchewan, Alberta, Canada. Within several weeks, Dow also announced the formation of a joint venture, later named K-Dow, with Petrochemical Industries Co. (PIC), a subsidiary of
Kuwait Petroleum Corporation. In exchange for $9.5 billion, the agreement included Dow selling 50-percent of its interest in five global businesses: polyethylene, polypropylene and polycarbonate plastics, and ethylenamines and
ethanolamines. The agreement was terminated by PIC on 28 December 2008.
Rohm & Haas Co. purchase On 10 July 2008, Dow agreed to
purchase all of the
common equity interest of
Rohm and Haas Co. for $15.4 billion, which equated to $78 per share. The buyout was financed with equity investments of $3 billion by
Berkshire Hathaway Inc. and $1 billion by the
Kuwait Investment Authority. The purpose of the deal was to move Dow Chemical further into
specialty chemicals, which offer higher profit margins than the
commodities market and are more difficult to enter for the competition. The purchase was criticized by many on
Wall Street who believed Dow Chemical overpaid (about a 75 percent premium on the previous day's market capital) to acquire the company; however, the high bid was needed to ward off competing bids from BASF. The transaction to purchase the outstanding interest of Rohm and Haas was closed on 1 April 2009.
Accelerated implementation On 8 December 2008, Dow announced that due to the
2008 financial crisis, it would accelerate job cuts resulting from its reorganization. The announced plan included closing 20 facilities, temporarily idling 180 plants, and eliminating 5,000 full-time jobs (about 11 percent of its work-force) and 6,000 contractor positions.
Strategy interruption Citing the global
recession that began in the latter half of 2008, the Kuwaiti government scuttled the K-Dow partnership on 28 December 2008. The collapse of the deal dealt a blow to Dow CEO
Andrew Liveris' vision of restructuring the company to make it less
cyclical. However, on 6 January 2009 Dow Chemical announced they were in talks with other parties who could be interested in a major joint venture with the company. Dow also announced they that it would be seeking to recover damages related to the failed joint venture from PIC. The deal was expected to be finalized in early 2009 and was to form one of the nation's largest specialty chemicals firms in the U.S. However, on 26 January 2009 the company informed Rohm and Haas that it would be unable to complete the transaction by the agreed upon deadline. Dow cited a deteriorated
credit market and the collapse of the K-Dow Petrochemical deal as reasons for failing to timely close the merger. Around the same time, CEO Andrew Liveris said a first- time cut to the company's 97- year- old
dividend policy was not "off the table". On 12 February 2009, the company declared a quarterly dividend of $0.15/share, down from $0.42 the previous quarter. The cut represented the first time the company had diminished its investor payout in the dividend's 97-year history. The transaction to purchase the outstanding interest of Rohm and Haas closed on 1 April 2009. After negotiating the sale of
preferred stock with Rohm and Hass' two largest stockholders and extending their one-year
bridge loan an additional year, the company purchased Rohm and Haas for $15 billion ($78 a share) on 9 March 2009.
2007 dismissal of senior executives On 12 April 2007, Dow dismissed two senior executives for "unauthorized discussions with third parties about the potential sale of the company". The two figures are executive vice president
Romeo Kreinberg, and director and former
CFO J. Pedro Reinhard. Dow claims they were secretly in contact with
JPMorgan Chase; at the same time, a story surfaced in Britain's
Sunday Express regarding a possible
leveraged buyout of Dow. The two executives have since filed lawsuits claiming they were fired for being a threat to CEO Liveris, and that the allegations were concocted as a pretext. However, in June 2008 Dow Chemical and the litigants announced a settlement in which Kreinberg and Reinhard dropped their lawsuits and admitted taking part in discussions "which were not authorized by, nor disclosed to, Dow's board concerning a potential LBO" and acknowledged that it would have been appropriate to have informed the CEO and board of the talks.
2008 sale of zoxamide business In summer 2008, Dow sold its zoxamide business to Gowan Company. Included in the sale were the trademarks for a
potato and
grape fungicide called
Gavel (fungicide). It is employed by potato growers to control early and late
potato blight and is also registered in
Canada for control of
downy mildew in
grapes, except in
British Columbia.
2014 – New operating segments In the fourth quarter of 2014, Dow announced new operating segments in response to its previously announced leadership changes. The company stated it would give further support to its end-market orientation and increase its alignment to Dow's key value chains – ethylene and propylene.
U.S. Gulf Coast investments Several plants on the
Gulf Coast of the US have been in development since 2013, as part of Dow's transition away from naphtha. Dow estimates the facilities will employ about 3000 people, and 5000 people during construction. The plants will manufacture materials for several of its growing segments, including hygiene and medical, transportation, electrical and telecommunications, packaging,
consumer durables and sports and leisure. Dow's new
propane dehydrogenation (PDH) facility in Freeport, Texas, was expected to come online in 2015, with a first 750000
tonne per year unit, while other units would become available in the future. An ethylene production facility was expected to start up in the first half of 2017.
Chlorine merger On 27 March 2015, Dow and
Olin Corporation announced that the boards of directors of both companies unanimously approved a definitive agreement under which Dow will separate a significant portion of its chlorine business and merge that new entity with Olin in a transaction that will create an industry leader, with revenues approaching $7 billion. Olin, the new partnership, became the largest chlorine producer in the world.
2015 merger and 2019 separation with DuPont On 11 December 2015, Dow announced that it would merge with
DuPont, in an all-stock deal. The combined company, which was known as
DowDuPont, had an estimated value of $130 billion, was equally held by the shareholders of both companies, and maintained their respective headquarters in Michigan and Delaware. Shareholders of each company held 50% of the combined company. In the new entity, Dow Chemical chief executive officer
Andrew N. Liveris became executive chairman and DuPont chief executive officer
Edward D. Breen became chief executive officer. In January 2017, the merger was pushed back a second time pending regulatory approvals. The same day, Dow also announced that it had reached a deal to acquire
Corning Incorporated's stake in their joint venture
Dow Corning for $4.8 billion in cash and a roughly 40% stake in
Hemlock Semiconductor Corporation. Dow Corning became
Dow Silicones Corporation, a wholly owned subsidiary of Dow Chemical using the trade name
DOWSIL. Also in 2019 Dow employees won an Adhesives and Sealants Council Innovation Award for "UV Curable Primer that Enables Hard to Bond INFUSE Olefin Block Copolymer Midsole Foams in High Performance Footwear".
Focus on higher margin business Dow Chemical has begun to shed commodity chemical businesses, such as those making the basic ingredients for
grocery bags and plastic pipes, because their profit margins are relatively low. Dow is, as of 2015, focusing its resources on specialty chemicals that earn profit margins of at least 20%.
Dioxin contamination , including
Midland, site of the Dow Chemical works Areas along Michigan's
Tittabawassee River, which runs within yards of Dow's main plant in
Midland, were found to contain elevated levels of the cancer-causing chemical
dioxin in November 2006. The dioxin was located in sediments two to ten feet below the surface of the river, and, according to
The New York Times, "there is no indication that residents or workers in the area are directly exposed to the sites". However, people who often eat fish from the river had slightly elevated levels of dioxin in their blood. In November 2008, Dow Chemical along with the
United States Environmental Protection Agency and
Michigan Department of Environmental Quality agreed to establish a
Superfund to address dioxin cleanup of the Tittabawassee River,
Saginaw River and
Saginaw Bay.
Sale of herbicide business In December 2015, Dow Chemicals agreed to sell part of its global
herbicide business, which had reported falling sales for nearly a year. A portfolio of weed killers known as
dinitroanilines was sold to privately held
Gowan Company, a family owned company located in
Yuma,
Arizona, which markets a variety of pesticides to the agricultural and horticultural industries. The global trademarks for
Treflan (pesticide), which can be sprayed on field
corn,
cotton and some fruit and vegetables, were included in the sale, as well as a formulation and packaging facility in
Fort Saskatchewan,
Alberta, Canada. == Products ==