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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
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Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
December 5,
2008
THE
DOW CHEMICAL COMPANY
(Exact
name of registrant as specified in its
charter)
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Delaware
(State
or other
jurisdiction
of
incorporation)
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1-3433
(Commission
File
Number)
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38-1285128
(IRS
Employer
Identification
No.)
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2030
Dow Center, Midland, Michigan 48674
(Address
of principal executive offices) (Zip Code)
Registrant's
telephone number, including area code:
(989)
636-1000
Not
applicable
(Former
name or former address, if changed since last
report.)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Section
2 - Financial Information
Item 2.05 Costs Associated with Exit or
Disposal Activities.
On
December 5, 2008, the Board of Directors of The Dow Chemical Company (“Dow” or
the “Company”) approved a restructuring plan as part of a series of actions to
advance the Company’s strategy and respond to the recent, severe economic
downturn. The restructuring plan includes the shutdown of a number of
facilities, as described in Item 2.06 below, and a global workforce reduction,
which are planned to be completed during the next 2 years. The Company also
expects to complete several divestitures within the next 2 years, which
will result in a reduction of approximately 2,000 positions. As a result of the
restructuring plan, the global workforce reduction and the divestitures,
approximately 5,000 jobs will be eliminated across several functions,
geographies and businesses.
The
Company will record a charge of $300 million to $400 million in the
fourth quarter of 2008 for severance costs associated with the restructuring
plan and the workforce reduction, and curtailment costs associated with Dow’s
defined benefit plans.
All
severance costs associated with these activities will result in future cash
expenditures.
The
Company will involve local stakeholders as defined in each country and in
compliance with relevant information and consultation processes.
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Item 2.06 Material
Impairments.
On
December 5, 2008, the Board of Directors of the Company approved a restructuring
plan, which includes the shutdown of a number of facilities around the world, as
part of a series of actions to advance the Company’s strategy and respond to the
recent, severe economic downturn. As a consequence of these activities, which
are scheduled to be completed over the next 2 years, the Company will
record a charge in the fourth quarter of 2008 for asset write-downs and asset
write-offs, including the write-down of certain manufacturing facilities, the
recognition of a loss on the sale of a business, and the write-down of certain
capital project spending. The charge related to the impairment of assets will
range from $300 million to $400 million. The most significant
impairments are described below:
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Due
to the recent, severe economic downturn, a decision was made to shut down
a number of facilities, including the
following:
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Chlor-alkali
manufacturing facility in Oyster Creek,
Texas
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Styrene
and styrene derivative manufacturing facilities in Freeport, Texas;
Pittsburg, California; Terneuzen, The Netherlands; and Varennes, Quebec,
Canada
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Facilities
that manufacture NORDELTM
hydrocarbon rubber in Seadrift, Texas, and TYRINTM
chlorinated polyethylene in Plaquemine,
Louisiana
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Due
to an expected loss on the pending sale of the Automotive Protection and
Dampening business in Europe, an impairment charge will be
recognized.
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Due
to a change in scope, the Company’s investment (primarily engineering
costs) in a project to form a joint venture to design, build and operate a
petrochemical complex in Oman will be written
down.
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None
of the costs related to the write-down or write-off of assets will result in
future cash expenditures.
The
Company will involve local stakeholders as defined in each country and in
compliance with relevant information and consultation processes.
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Section
8 - Other Events
Item
8.01 Other Events.
The
Dow Chemical Company issued a press release on December 8, 2008, regarding
the preceding items. The press release is included below in its
entirety.
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Dow
Accelerates Implementation of its Transformational Strategy
New
Streamlined Operating Model to Reflect New Portfolio and Current Economic
Realities
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Midland, Mich. – December 8, 2008
– The Dow Chemical Company (NYSE:DOW) today announced a series of
aggressive actions to accelerate its transformational strategy in light of
current economic realities.
Dow’s
transformation to a lean Corporate Center, a shared Business Services group and
three business operating models, effective January of 2009, will accelerate the
Company’s ability to shed high-cost assets and centralized functional
structures. As part of the actions announced today, Dow will eliminate
approximately 5,000 full-time jobs, close 20 facilities in high-cost locations
and divest several non-strategic businesses. The job reductions represent a
reduction of roughly 11 percent of Dow’s global workforce. Once fully
implemented, these actions are expected to result in $700 million in annual
operating cost savings by 2010 and are additional to the previously announced
cost synergies of $800 million in the same timeframe for the anticipated Rohm
and Haas acquisition.
In
addition, reflecting poor current market conditions, Dow will temporarily idle
approximately 180 plants and significantly reduce its contractor workforce
worldwide by approximately 6,000 as predicated by reduced
operations.
“Transformation,
by definition, requires a commitment to working differently. We are moving from
a highly centralized and standardized approach, to operating three very
different business models with a lean and efficient Corporate Center. Today’s
restructuring is designed to support the Dow of Tomorrow,” said Dow Chairman and
CEO Andrew N. Liveris. “However, we are accelerating the implementation of these
measures as the current world economy has deteriorated sharply, and we must
adjust ourselves to the severity of this downturn.”
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The
new Dow will comprise three different business operating models: Joint
Ventures/Asset Light; Performance Products; and Health & Agriculture,
Advanced Materials and other Market Facing Businesses. Specific details on these
business structures will be outlined early next year.
Webcast
and Conference Call Information
Dow
will host a call with investors and securities analysts today at 9:00 a.m. U.S.
Eastern Standard Time. The call will last 30 minutes.
Connection
information is as follows:
Listen-only
dial-in information: +1 (719) 325-4746
Webcast
Link: <http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=80099&eventID=2048018>
About
Dow
With
annual sales of $54 billion and 46,000 employees worldwide, Dow is a diversified
chemical company that combines the power of science and technology with the
"Human Element” to constantly improve what is essential to human progress. The
Company delivers a broad range of products and services to customers in around
160 countries, connecting chemistry and innovation with the principles of
sustainability to help provide everything from fresh water, food and
pharmaceuticals to paints, packaging and personal care products. References to
“Dow” or the “Company” mean The Dow Chemical Company and its consolidated
subsidiaries unless otherwise expressly noted. More information about Dow can be
found at www.dow.com.
Note:
The forward-looking statements contained in this document involve risks and
uncertainties that may affect the Company’s operations, markets, products,
services, prices and other factors as discussed in filings with the Securities
and Exchange Commission. These risks and uncertainties include, but are not
limited to, economic, competitive, legal, governmental and technological
factors. Accordingly, there is no assurance that the Company’s expectations will
be realized. The Company assumes no obligation to provide revisions to any
forward-looking statements should circumstances change, except as otherwise
required by securities and other applicable laws.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Dated:
December 9, 2008 THE DOW CHEMICAL
COMPANY
By:/s/WILLIAM H.
WEIDEMAN
Name: William
H. Weideman
Title:
Vice President and
Controller
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