HOUSTON CHRONICLE ARCHIVES



Paper: HOUSTON CHRONICLE
Date: TUE 04/08/86
Section: BUSINESS
Page: 1
Edition: NO STAR

Carbide to cut 1,200 jobs, to sell $3 billion in assets

By TOM SCOTT
Staff

Union Carbide Corp. will cut more than 1,200 employees from its worldwide work force and sell a total of $3 billion in assets, but spokesmen said few layoffs are expected in the company's Houston-area operations.

Union Carbide, headquartered in Danbury, Conn., already has slashed more than 7,000 workers from its payroll in the past year.

Mel Anderson, a private public relations representative for the firm, said that of the more than 7,000 employees terminated worldwide since last year, about 250 have been in the Houston area.

Most of those job terminations were at Union Carbide's giant chemical and plastics plant in Texas City and were accomplished through a voluntary" severance program, Anderson said.

Currently, Union Carbide employs about 250 people in Houston, Deer Park, LaPorte and Clear Lake. In Texas City, some 1,500 to 1,600 additional people are on the payroll.

The majority of Union Carbide's operations in Houston are in a regional office of the Linde Division, which is primarily involved in industrial gases, a company spokesman explained.

Union Carbide, which has been in Houston about 60 years, has recently been rocked by industrial accidents and safety violations in Bhopal , India, and Institute, W.Va.

When asked how many people conceivably could be let go in Houston as a result of the company's announcement Monday, Anderson said many of the layoffs will occur among management.

There could be some (layoffs) here but I would suspect there wouldn't be many," Anderson said.

Union Carbide's Houston activities, once centered in Greenway Plaza, have moved to Commerce Park North on Interstate 45.

The giant company's net earnings have taken a beating. It reported a $222 million after tax income in 1985 on revenues of $9 billion, compared to a profit of $323 million on revenues of $9.5 billion in 1984.

No word has been given as to whether or not Union Carbide intends to sell its Texas City plant. The facility is the largest producer in the world of synthetic ethanol - some 740 million pounds a year. It also houses one of the company's two units worldwide that produces solution vinyl resins. An olefins plant produces 1.25 billion pounds of ethylene a year.

The company also said in a separate statement that it had sold its worldwide battery products business, except in India, including the brand name Eveready as well as manufacturing facilities in the United States and 23 foreign countries. Ralston Purina Co. will buy the unit for $1.4 billion.

Kennedy said the divestitures - which will be in addition to the sale of the company's prized consumer products businesses - will take place over the next 18 months.

During an attempted takeover by GAF Corp. late last year, Union Carbide said it would divest several consumer product divisions, including Prestone, Simonize, STP and Glad products. Those divisions have not yet been sold.

Last August, Union Carbide said it would sell more than $2 billion in assets. But the amount jumped to $3 billion Monday in a continuation of its huge restructuring plan. In a letter to employees, President Robert D. Kennedy said the plan will reduce corporate debt and improve near-term earnings and cash flow.

While the company would not say which other operations may be put on the selling block, Kennedy said the "centerpiece" of the divestiture would be the 611-acre campus on which Carbide's headquarters sits in Connecticut.

Kennedy said the site, which Carbide purchased in the mid- and late-1970s for more that $12 million, "will be developed into a commercial complex over the next several years." Carbide will retain its corporate headquarters at the site.

The 1,200 employees to be cut from the work force will be in addition to those released in the divestitures, Kennedy said.

Kennedy added there would be no freeze in salaries for remaining Carbide workers in 1986, and he said that capital expenditures in 1986 are planned to be $675 million (compared to $649 million last year). Of that amount, $140 million will spent on environmentally related" projects, a company statement said.

By the end of this year, Kennedy said, Carbide will be a "somewhat smaller and much more focused company" with annual sales of about $7 billion.

We will have simplified a company that had 20 divisions, six area companies and six executive vice presidents to one with four strong worldwide business groups, 10 divisions, one executive vice president and, in effect, no area companies. No less important, we will have reduced the layering of management between CEO and plant manager or sales person by three to four levels," Kennedy said.

On March 24, Union Carbide said it had reached a tentative settlement in claims related to the Bhopal accident which killed more than 2,000 people and injured thousands more. The proposed settlement of $350 million would produce funds for the victims of between $500 and $600 million," a company spokesman explained. As yet, no settlement has been signed.