The announcement last week that DuPont and Dow intend to formally enter merger discussions resonated throughout Delaware. Even though the merger has to go through the regulatory and shareholder approval process, which will take time, questions are quickly emerging as to what the merger will mean in terms of economic impact for Delaware. Separately announced by DuPont was a global restructuring plan that will result in a 10% reduction in global workforce, which is bound to impact the 7000 employees currently working in Delaware.
Taken together, these announcements create many questions about state finances as the calculations begin on what losses due to a diminished DuPont will mean to personal income tax, corporate income tax, gross receipts and property taxes throughout the state. Coupled with what could also be a reduction in philanthropic and nonprofit support, there may not be a person in Delaware who won’t feel the changes.
DuPont has been a Delaware institution for over 200 years, a fact that the average Delawarean can recite on command. The company history is so intertwined with Delaware’s there’s in some sense an impending loss of Delaware’s identity—what does Delaware look like without a sustained DuPont presence? As we seek answers to these questions, it’s important to know that the process to complete the merger and execute the spinoffs will take up to three years, and during that time the Chamber will be working closely with DuPont, state government and local business to examine all options to navigate whatever shifts in the economic base may be created. At the same time, there is potential that at least one or more of the spin-off companies could be located in the state. These would be fortune 500 companies with powerhouse brands that have market leadership and would be better positioned for growth and investment after the spins. The Chamber will work closely with DuPont and state officials to foster a business climate that will be attractive for the future spinoff companies to locate their headquarters in the state.