1.   Warren, Susan.  "Some Dow Chemical Employees, Retirees Have Savings Locked," Wall Street Journal, January 17, 2002: C16.

Nearly 13,500 Dow Chemical Company employees and retirees have been forced into keeping their Dow stock in their retirement plan.  This is bad news to employees and retirees because the stock has plummeted 29% recently.  The 13,500 who were affected are former employees of Union Carbide Corp, who Dow purchased last February.  Almost one-third of the $1.9 billion invested by the former Union Carbide employees was put into Dow stock. 

However, Dow expects the lockdown to be over by the end of January, but some of the stock can't be traded unless the employee is 50 years of age.  So, some former employees of Union Carbide will continue to watch their retirement dwindle down if Dow's stock keeps falling.  Hopefully, these employees will gain some of their retirement back once Dow's asbestos trial is over.

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2.   Staff Reporter.  "PPG Profit Tumbles 34% as Sales Fall 7.3%; Cutbacks to Continue," Wall Street Journal, January 18, 2002: B4.

PPG, the Pittsburgh manufacturer of chemicals, coatings, and glass products, had fourth-quarter earnings that were 34% below what they were a year prior.  Due to the sales decrease, PPG will try a restructuring that will involve terminating jobs, and closing facilities.  However, PPG's earnings for the fourth quarter were better than analysts had expected.  A Thomson Financial/First Call analyst anticipated earnings of 43 cents a share, but PPG reported earnings or 49 cents per share.  This fourth quarter PPG reported sales of $1.91 billion, which 7.3% lower than last year's $2.06 billion.  PPG plans to continue the restructuring they did in first quarter of this year, even though they will likely have pretax costs between $60 and $90 million.  Currently, PPG has no idea how many of their 34,000 employees will be laid off.

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3.  Staff Reporter.  "Air Products & Chemicals Inc.  Profit Falls 16% on Weakness in Sales, U.S. Manufacturing," Wall Street Journal, January 23, 2002: A7.

For the first quarter, Air Products & Chemicals Inc. reported a 16% loss in profit.  Due to weak sales, Wall Street over estimated their projected income.  Air Products & Chemicals is located in Lehigh Valley, Pa, where they manufacture and sell chemicals and industrial gases.  For the first quarter, which ended December 31, they reported a net income of $113.7 million (52 cents per share).  This is a considerable decrease from last year's net income of $135.6 million (62 cents per share).  In addition, revenue also fell from $1.48 billion to $1.32 billion, an 11% decrease.  Air Products thinks the decline is caused by the weakness in the worldwide electronics market and the struggling U.S. manufacturing industries.  Like most companies, Air Products is probably hoping things will pick back up once the economy bounces back. 

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4.   Tkacik, Maureen.  "Lots of Car Buffs Are Saying So Long to Plastic Hubcaps," Wall Street Journal, January 24, 2002: A12.

In recent years, the use of plastic hubcaps on new cars has declined greatly.  This is due to new car buyers insisting that their new cars come with metal alloy wheels standard.  Many of today's lower priced cars are coming from the factory with alloy wheels.  Only a decade ago, most cars came with 14 inch wheels and some type of plastic hubcap.  Some think the change to more fancy chrome wheels is caused by the appeal created by the cars of music artists and movie stars.  In Jay-Z's song "Girls Girls Girls", he uses the line "I come scoop you in that coupe, sittin' on deuce-zeroes, fix your hair in the mirror, let's roll."  With "deuce-zeroes", he is referring to the coveted 20-inch rims known as dubs.

This recent increase in the buying of alloy wheels has caused the wheel industry to be $3 billion a year industry that consists of 150 companies.  This is more than double the $1.26 billion the wheel industry made in 1991.  If you're a manufacturer of plastic of hubcaps, this is not a good fad.  But if you're like Jay-Z and want "Girls Girls Girls", then there must be a set of wide, glistening chrome wheels on your ride.

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5.   Jenkins, Holman.  "Is Soap and Water the Fuel of the Future?," Wall Street Journal, January 30, 2002: B4.

Electric motors running on fuel cells are nothing new.  They are made of fuel cells that combine hydrogen and oxygen to run the motor.  However, the problem with this is hydrogen is hard to isolate even though it is very abundant in nature.  Millennium Cell Inc. is currently developing a type of fuel that would solve this problem.  Steve Amendola, the company's main inventor, developed a fuel cell that uses sodium borohydride.  When sodium borohydride is mixed with water and passed over a platinum catalyst it releases the hydrogen atoms.  Sodium borohydride works well for producing the fuel because it can easily be kept in a nonflammable form. 

Sodium borohydride is currently only used in small amounts by paper and pharmaceutical industries.  It is expected that they may one day gain acceptance in the auto industry due to its "zero tailpipe emission", no greenhouse gas escape, and energy independence.  It is projected that they will be used first in the batteries of laptop computers and cell phones because they will likely last weeks without needing charged.  Chrysler is already trying the Millennium Cell in its concept car "Natrium". 

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6.   Staff Reporter.  "Nova Chemicals Corp.  Loss Widens to $98 Million; Firm Braces for Downturn," Wall Street Journal, January 31, 2002: B2.

Nova Chemicals Corp. is expecting prolonged economic downturn.  This comes after reporting a large fourth-quarter loss.  Nova Chemicals is based out of Calgary, Alberta, where they produce ethylene, polyethylene, and chemical, energy co-products.  They produce the plastic resin of these polymers, and the resin in used in many automobile, appliance, and household products.  Nova's net loss grew from $3 million (14 cents per share) last year to $98 million ($1.23 per share) this year.  Fourth-quarter revenue also plunged from $1.02 billion last year to $654 million this year, a loss of 36%.  The loses Nova posted includes a $10 million dollar pretax write-off on canceled capital projects.  However, it also included a $17 million charge for severance and other costs related to recent staff reductions.  This past year Nova cut 20% of its senior management positions in order to reduce costs.  With bad market conditions and economic uncertainty, Nova is just hoping to generate enough cash to lessen their debt, and keep a strong balance sheet for its "investment-grade credit rating".

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7.   Warren, Susan.  "Chemicals Companies Hit by Tough Earnings Climate," Wall Street Journal, February 1, 2002: B6.

Bad market conditions are still having a negative impact on many chemical industries.  Both Dow Chemical Co. and Lyondell Chemical Co. posted fourth quarter losses.  In contrast, Millennium Chemicals Inc. is one of the only chemical companies to show a gain in the fourth quarter.  Millennium Chemicals barely showed earnings, and that was only because of a tax adjustment.  According to Michael Parker, Dow Chemical's chief executive, "this past year is the most difficult times I've seen in decades".  Dow Chemical, a Midland, MI based company, posted a net loss of $37 million (4 cents per share). 

Lyondell reported fourth quarter losses of $53 million (46 cents per share).  In order to help generate capital, Lyondell swapped $440 million of stock with Occidental Petroleum Co.'s share in Equistar.  The swap now gives Lyondell 70.5% of Equistar's stock.  Millennium Chemicals, of Red Bank, N.J., posted a net income $8 million (13 cents per share).  This is down from $14 million (22 cents per share) from a year ago.  Millennium would have taken a loss of 53 cents per share if not for a $42 million gain from an adjustment in tax reserves. 

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8.   Warren, Susan.  "DuPont Cajoles Independent Units to Talk to One Another," Wall Street Journal, February 5, 2002: B4.

DuPont is currently trying to break its many years of bad bureaucracy by having its twenty independent units to communicate and collaborate with each other.  Many people do not understand why this has not been happening all along, but it is difficult for a large company like DuPont who has so many different industries.  In 2001, DuPont reported sales of $27.69 billion.  These sales were broken down to Performance Coatings & Polymers (20.7%), Specialty Fibers (16%), Agriculture & Nutrition (15.6%), Specialty Polymers (14.0%), Pigments & Chemicals (12.8%), Nylon (9.7%), Polyester (6.8%), Pharmaceuticals (3.3%), and Other (1%).  DuPont's chief executive, Charles Holiday, hopes all of these industries can work together to find a better balance and help promote a profit for a currently unprofitable company. 

DuPont is hopeful that collaboration among their different segments will also help create new ideas and products.  Holiday hopes that these new ideas and products will make up one-third of DuPont's sales revenue.  It makes sense for DuPont to bring its units together because their different subsidiaries were previously run as separate companies.

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9.   Staff Reporter.  "Hercules Inc.  Chemical Concern Reports Period Profit of $6 Million," Wall Street Journal, February 6, 2002: A8.

Hercules Inc. is a global manufacturer of specialty chemicals.  Their chemical specialty products are used in a variety of home, office, and industrial markets.  Recently, Hercules has been losing a great deal of its profits.  In the fourth quarter, Hercules posted a net income of $6 million (6 cents per share).  This represents a net loss of $29 million (28 cents per share) of their net income a year ago in the fourth quarter.  On a positive note, Hercules doubled the estimated three cents per share that Thomson Financial/First Call estimated they would have.  Also in the fourth period, Hercules's revenue fell from $717 million last year to $611 million this year, a loss of 15%.  Hercules, who is based out of Wilmington, Del., expects the chemical market to remain weak until the economy picks up again.  However, Hercules expects no quick signs of recovery.

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10.  Warren, Susan.  "Dow Chemical Is Tight-Lipped About Asbestos," Wall Street Journal, February 11, 2002: C1.

Dow Chemical's stock has taken a dramatic fall recently due to litigation on the exposure to asbestos.  After the litigation in early January, Dow's stock fell nearly 30%.  This represented a loss of $240 million to the company, but luckily Dow had asbestos liability insurance which covered $230 million of the loss.  According to CEO Michael Parker, "We don't consider that to be material".  However, some analysts disagree with his statement because they don't know how many cases are pending, average cost of previous cases, and how much insurance coverage Dow has. 

The asbestos litigation comes at a very bad time for Dow because of the Enron Collapse.  Since the Enron downfall, companies such as Dow are expected to fully release their financial risks.  For this reason, many feel Parker should release complete information on the asbestos exposure problem facing Dow.

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11.  Winter, Ralph.  "PolyOne Sees Stronger Demand, But Remains Cautious," Wall Street Journal, February 11, 2002: B6.

PolyOne, a Cleveland based polymer company, is beginning to see a stronger demand in their products.  However, they still are remaining cautious with today's struggling economy.  PolyOne was formed August 31, 2000 when Genoa Co. and M.A. Hanna Co. merged.  PolyOne manufactures plastic compounds, colorants, specialty resins, plastic films, rubber compounds and other polymer products. 

PolyOne is still expecting it to be a challenge just to break even in the next quarter even though demand is picking back up.  In the near future, PolyOne is expecting greater demand because many of their customer's inventories are beginning to get low.  Even with the struggling economy, PolyOne hasn't cut prices much.  However, some of their competitors have cut prices in order to get volume.  In order to compensate for their struggling business, PolyOne plans to close 13 plants before the end of 2002, and spend $56 million upgrading facilities and raising research and development.

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12.  Talley, Karen.  "DuPont, 3M, International Paper, Advance in Second Straight Rally," Wall Street Journal, February 12, 2002: C2.

Some chemical and manufacturing industries have shown a rally in the stock market.  These stocks have shown improvements recently because many investors consider them to be "less turbulent".  It is not uncommon for these "less turbulent" stocks to do well when the economy is slowly improving.  DuPont gained $1.84 (4.3%) on its stock on February 10 and 11.  This increase came after DuPont announced it is splitting its textile industries into a subsidiary.  The splitting is part of DuPont's new realignment plan. 

Additionally, International Paper, PPG Industries, and Applied Materials showed gains in stock the market.  Intentional Paper's increased its stock price by $1.82 per share (4.3%).  This increase is likely caused by their recent consolidation.  Manufacturing industries are hoping that this indicates a sign of improvement for U.S. manufacturing. 

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13.  Warren, Susan.  "DuPont Co. to Shed by End of Next Year Businesses in Nylon, Polyester, and Lycra," Wall Street Journal, February 12, 2002: A3.

By the end of 2002, DuPont will no longer be producing nylon, polyester, and lycra.  This comes after DuPont made the decision to become a "less cyclical, higher growth company".  These products will now be handled by DuPont's subsidiary in textiles and interiors.  The remaining DuPont company will be reorganized into five main categories: Electronic & Communication Technology, Performance Materials, Coatings & Color Technologies, Safety & Protection, and Agriculture & Nutrition.  This move will cause sales to decrease to $20.2 billion a year; less than half of 1997's $45 billion in sales.  However, DuPont is not concerned with this because they have reduced their size dramatically.  Instead of focusing on being a large company, DuPont is now focusing on adding value. 

The move to abandon these industries came after DuPont was under pressure to focus on new, high-growth industries.  Textile industries are currently not the most profitable for DuPont, and they have been their slowest growing industry.  This should be a good move for DuPont in the future, if their new products are marketable. 

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14.  Staff Reporter.  "Eastman Chemical Abandons Its Plans to Spin Off Business," Wall Street Journal, February 12, 2002: B10.

Due to adverse market conditions, Eastman Chemical has abandoned its plan to spin-off its chemical and plastic industries.  The planned spin-off fist came about in November when Eastman decided it wanted to branch off into two smaller companies.  The spin-off would have separated Eastman into a division which included its coatings, inks, and specialty polymers, and a division which included its digital business. 

The delay in the spin-off came after Eastman announced that J. Brian Ferguson would be its new chief executive.  Eastman is currently devising a new structure for the spin-off with its new chief executive.  The split was postponed so Eastman could "maximize value for our shareowners".   Once the economy achieves more stability, it is likely the split will occur. 

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