DuPont

E. I. du Pont de Nemours and Company (NYSE: DDPRA, NYSE: DDPRB, NYSE: DD) is an American chemical company that was founded in July 1802 as a gunpowder mill by Eleuthère Irénée du Pont. DuPont is currently the world's second largest chemical company (behind BASF) in terms of market capitalization and fourth (behind BASF, Dow Chemical and Ineos) in revenue. Its stock price is also a component of the Dow Jones Industrial Average.

In the twentieth century, DuPont led the polymer revolution by developing many highly successful materials such as Vespel, neoprene, nylon, Corian, Teflon, Mylar, Kevlar, Zemdrain, M5 fiber, Nomex, Tyvek and Lycra. DuPont has also been significantly involved in the refrigerant industry, developing and producing the Freon (CFCs) series and later, more environmentally friendly refrigerants. In the paint and pigment industry, it has created synthetic pigments and paints, such as ChromaFlair.

DuPont is often successful in popularizing the brands of its material products such that their trademark names become more commonly used than the generic or chemical word(s) for the material itself. One example is “neoprene”, which was intended originally to be a trademark but quickly came into common usage.

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History

1802

DuPont was founded in 1802 by Eleuthère Irénée du Pont, using capital raised in France; and gunpowder machinery imported from France. The company was started at the Eleutherian Mills, on Brandywine Creek, near Wilmington, Delaware, USA two years after he and his family left France to escape the French Revolution. It began as a manufacturer of gunpowder, as du Pont had noticed that the industry in North America was lagging behind Europe and saw a market for it. The company grew quickly, and by the mid nineteenth century had become the largest supplier of gunpowder to the United States military, supplying as much as half of the powder used by the Union Army during the American Civil War. (The Eleutherian Mills site was declared a National Historic Landmark in 1966 and holds a museum covering this history that may be visited today.)

1902 to 1912

  DuPont continued to expand, moving into the production of dynamite and smokeless powder. In 1902, DuPont's president, Eugene du Pont, died, and the surviving partners sold the company to three great-grandsons of the original founder. The company subsequently purchased several smaller chemical companies, and in 1912 these actions gave rise to government scrutiny under the Sherman Antitrust Act. The courts declared that the company's dominance of the explosives business constituted a monopoly and ordered divestment. The court ruling resulted in the creation of the Hercules Powder Company (now Hercules Inc.) and the Atlas Powder Company (now AstraZeneca). ^[1]

DuPont also established two of the first industrial laboratories in the United States, where they began work on cellulose chemistry, lacquers and other non-explosive products. DuPont's Central Research Department was established at the Experimental Station, across the Brandywine River from the original powder mills.

1914

In 1914, Pierre S. du Pont, invested in the fledgling automobile industry, buying stock of General Motors (GM). The following year he was invited to sit on GM's board of directors and would eventually be appointed the company's chairman. The DuPont company would assist the struggling automobile company further with a $25 million purchase of GM stock. In 1920, Pierre S. du Pont was elected president of General Motors. Under du Pont's guidance, GM became the number one automobile company in the world. However, in 1957, because of DuPont's influence within GM, further action under the Clayton Antitrust Act forced DuPont to divest itself of its shares of General Motors.

1920

In the 1920s DuPont continued its emphasis on materials science, hiring Wallace Carothers to work on polymers in 1928. Carothers discovered neoprene, the first synthetic rubber, the first polyester superpolymer and in 1935, nylon. Discovery of Lucite and Teflon followed a few years later. 1935 was also the year that DuPont first introduced the chemical phenothiazine as an insecticide.

World War II

Some conspiracy theorists claim that, according to documents found at Auschwitz, the DuPont chemical manufacturer clearly made and delivered Zyklon B and that, along with two German firms, Tesch/Stabenow and Degesch, they produced Zyklon B gas after they acquired the patent from Farben. Auschwitz's own website, however, has only this to say on the subject of Zyklon-B production: "The Zyklon used at Auschwitz concentration camp was produced by a firm called Degesch (Deutsche Gesellschaft für Schädlingsbekämpfung mbH), with headquarters in Frankfurt am Main and forming a part of IG Farbenindustrie." (http://www.auschwitz.org.pl/html/eng/historia_KL/cyklon_b_ok.html) Used in Germany during the war and before as a pesticidal fumigant, there seems to be no reason why the Nazis would have found it necessary to obtain the chemical from the U.S., even if a plausible explanation could be found for their having been able to do so after their declaration of war against the same nation. Finally, given the camp's location and in whose territory it lay throughout the Cold War, one can imagine that much would have been made of such "evidence" of complicity by an American firm in the Holocaust.

Throughout this period, the company continued to be a major producer of war supplies in both World War I and World War II, and played a major role in the Manhattan Project in 1943, designing, building and operating the Hanford plutonium producing plant and the Savannah River Plant in South Carolina.

1950 to 1970

After the war, DuPont continued its emphasis on new materials, developing Mylar, Dacron, Orlon and Lycra in the 1950s, and Tyvek, Nomex, Qiana, Corfam and Corian in the 1960s. DuPont materials were critical to the success of the Apollo Space program.

DuPont has been the key company behind the development of modern body armour. In World War II DuPont's ballistic nylon was used by the RAF to make FLAK Jackets. With the development of Kevlar in the 1960s, DuPont began tests to see if it could resist a lead bullet. This research would ultimately lead to the bullet resistant vests that are the mainstay of police and military units in the industrialized world.

1981 to 1995

In 1981, DuPont acquired Conoco Inc., a major American oil and gas producing company that gave it a secure source of petroleum feedstocks needed for the manufacturing of many of its fiber and plastics products. The acquisition, which made DuPont one of the top ten U.S. based petroleum and natural gas producers and refiners, came about after a bidding war with the giant distillery, Seagram Company Ltd. which would become DuPont's largest single shareholder with four seats on the board of directors. On April 6, 1995, after being approached by Seagram Chief Executive Officer Edgar Bronfman, Jr., DuPont announced a deal whereby the company would buy back all the shares owned by Seagram.

1999

In 1999, DuPont sold all of its Conoco shares, the business merging with Phillips Petroleum Company. That year, CEO Chad Holliday switched the company's focus towards producing DuPont chemicals from living plants rather than processing them from petroleum.

Current activities

DuPont describes itself as a global science company that employs more than 60,000 people worldwide and has a diverse array of product offerings.^[2] In 2005, the Company ranked 66th in the Fortune 500 on the strength of nearly $28 billion in revenues and $1.8 billion in profits.^[3]

DuPont businesses are organized into the following five categories, known as marketing "platforms": Electronic and Communication Technologies, Performance Materials, Coatings and Color Technologies, Safety and Protection, and Agriculture and Nutrition.

In 2004 the company sold its textiles business, which included some of its best-known brands such as Lycra (Spandex), Dacron polyester, Orlon acrylic, Antron nylon and Thermolite, to Koch Industries. DuPont also manufactures Surlyn, which is used for the covers of golf balls, and, more recently, the body panels of the Club Car Precedent golf cart.

DuPont's annual R&D budget is $1.3 billion; its latest project is a research center in Hyderabad, A.P., India scheduled to open in mid-2008, that will focus on agriculture and nutrition products.^{[citation needed]}

NASCAR sponsorship

DuPont is widely known for its sponsorship of NASCAR driver Jeff Gordon and his Hendrick Motorsports #24 Chevrolet Monte Carlo. DuPont has been sponsoring Jeff Gordon since he began in NEXTEL Cup (then Winston Cup) in 1992. DuPont has said this about their sponsorship:

Our sponsorship of Jeff Gordon helps keep DuPont brands and products in the public eye. Branding is a key component of the DuPont knowledge intensity strategy for achieving sustainable growth.[1]

In 2007, DuPont, Jeff Gordon, and Hendrick Motorsports celebrated their 15th season together. It is currently the longest driver/sponsor/owner combination in NASCAR.

Corporate governance

Current board of directors

• Charles O. Holliday - CEO
• Richard H. Brown
• Robert A. Brown
• Bertrand P. Collomb
• Curtis J. Crawford
• John T. Dillon
• There du Pont
• Marillyn Hewson
• Lois D. Juliber
• Masahisa Naitoh
• Sean O'Keefe
• William K. Reilly

Environmental record

DuPont has a mixed environmental record, receiving praise from some for environmentally friendly practices while at the same time incurring large government fines and stern criticism from environmental researchers. In 2005, BusinessWeek magazine, in conjunction with the Climate Group, ranked DuPont as the best-practice leader in cutting their carbon gas emissions ^{[4] [5]}. They pointed out that DuPont reduced its greenhouse gas emissions by more than 65% from the 1990 levels while using 7% less energy and producing 30% more product. However, based on year 2000 data,^[6] researchers at the Political Economy Research Institute of the University of Massachusetts Amherst ranked DuPont as the largest corporate producer of air pollution in the United States. ^[7] The study found DuPont's most toxic pollution comprised chloroprene (855,370 lb/yr, 387,989 kg/yr), sulfuric acid (804,501 lb/yr, 364,916 kg/yr), and chlorine (65,088 lb/yr, 29,523 kg/yr) based on Toxics Release Inventory data. The most massive releases came in the form of more than 4 million pounds (1,800 t) of carbonyl sulfide followed by 2 million pounds (900 t) of cydrochloric acid.^[8]

May 24, 2007, marked the opening of the US$2.1 million DuPont Nature Center at Mispillion Harbor Reserve, a wildlife observatory and interpretive center on the Delaware Bay near Milford, Delaware, USA. DuPont contributed both financial and technological support to create the center, as part of its "Clear into the Future" initiative to enhance the beauty and integrity of the Delaware Estuary. The facility will be state-owned and operated by the Delaware Department of Natural Resources and Environmental Control (DNREC).^[9][10]

DuPont is a founding member of the World Business Council for Sustainable Development with DuPont CEO Charles O. Holliday being Chairman of the WBCSD from 2000-2001.

Positive recognition

DuPont was four times awarded the National Medal of Technology, first in 1990, for its invention of "high-performance man-made polymers such as nylon, neoprene rubber, "Teflon" fluorocarbon resin, and a wide spectrum of new fibers, films, and engineering plastics"; the second for 2002 "for policy and technology leadership in the phaseout and replacement of chlorofluorocarbons". Additionally, DuPont scientist George Levitt was honored with the medal in 1993 for the development of sulfonylureas — environmentally friendly herbicides for every major food crop in the world. In 1996, DuPont scientist Stephanie Kwolek was recognized for the discovery and development of Kevlar.

Controversies

Hemp

It is often asserted in pro-cannabis publications that DuPont actively supported the criminalization of the production of hemp in the US in 1937 through private and government intermediates, and alleged that this was done to eliminate hemp as a source of fiber—one of DuPont's biggest markets at the time. Hemp paper threatened DuPont's monopoly on the necessary chemicals for paper from trees, and Nylon, a synthetic fiber, was patented the same year that hemp was made illegal. The company denies these allegations. ^[11][12]

Price fixing

In 1941, an investigation of Standard Oil Co. and IG Farben brought evidence concerning complex price and marketing agreements between DuPont, U.S. Industrial Alcohol Company, and their subsidiary Cuba Distilling Company. The investigation was eventually dropped, like dozens of others in many different kinds of industries, because of the need to enlist industry support in the war effort.^[13]

Behind the Nylon Curtain

In 1974, Gerard Colby Zilg, wrote Du Pont: Behind the Nylon Curtain, a critical account of the role of the DuPont family in American social, political and economic history. The book was nominated for a National Book Award in 1974.

A du Pont family member obtained an advance copy of the manuscript and was “predictably outraged”. A DuPont official contacted The Fortune Book Club and stated that the book was “scurrilous” and “actionable” but produced no evidence to counter the charges. The Fortune Book Club (a subsidiary of the Book of the Month Club) reversed its decision to distribute Zilg's book. The editor-in-chief of the Book of the Month Club declared that the book was “malicious” and had an “objectionable tone”. Prentice-Hall removed several inaccurate passages from the page proofs of the book, and cut the first printing from 15,000 to 10,000 copies, stating that 5,000 copies no longer were needed for the book club distribution. The proposed advertising budget was reduced from $15,000 to $5,000.

Zilg sued Prentice-Hall (Zilg v. Prentice-Hall), accusing it of reneging on a contract to promote sales.

The Federal District Court ruled that Prentice Hall had "privished" the book (the company conducting an inadequate merchandising effort after concluding that the book did not meet its expectations as to quality or marketability) and breached its obligation to Zilg to use its best efforts in promoting the book because the publisher had no valid business reason for reducing the first printing or the advertising budget. The court also ruled that the DuPont Company had a constitutionally protected interest in discussing its good faith opinion of the merits of Zilg's work with the book clubs and the publisher, and found that the company had not engaged in threats of economic coercion or baseless litigation.

The United States Court of Appeals for the Second Circuit overturned the damages award in September of 1983. The court stated that, while DuPont's actions “surely” resulted in the book club's decision not to distribute Zilg's work and also resulted in a change in Prentice-Hall's previously supportive attitude toward the book, DuPont's conduct was not actionable. The court further stated that the contract did not contain an explicit “best efforts” or “promote fully” promise, much less an agreement to make certain specific promotional efforts. Printing and advertising decisions were within Prentice-Hall's discretion.

Zilg lost a Supreme Court appeal in April 1984.

In 1984 Lyle Stuart re-released an extended version, Du Pont Dynasty: Behind the Nylon Curtain.^[14]

Chlorofluorocarbons

Along with General Motors, DuPont was the inventor of CFCs (chlorofluorocarbons), and the largest producer of these ozone depleting chemicals (used primarily in aerosol sprays and refrigerants) in the world, with a 25% market share in the late 1980s.

In 1974, responding to public concern about the safety of CFCs,^[15] DuPont promised through newspaper advertisements and congressional testimony to stop production of CFCs should they be proved to be harmful to the ozone layer. On 4 March 1988, U.S. Senators Max Baucus (D-Mont.), David Durenberger (R-Minn.), and Robert T. Stafford (R-Vt.) officially wrote to DuPont, in their capacity as the leadership of the Congressional subcommittee on hazardous wastes and toxic substances, asking the company to keep its promise to completely stop CFC production (and to do so for most CFC types within one year) in light of the 1987 international Montreal Protocol for the global reduction of CFCs (signed for the United States by President Ronald Reagan). The Senators argued that “DuPont has a unique and special obligation” as the original developer of CFCs and the author of previous public assurances made by the company regarding the safety of CFCs. DuPont's response was that the senatorial demand was more drastic than the scientific evidence warranted, and that alternative chemicals were only in their infancy.^{[citation needed]}

In a dramatic turnaround on 24 March 1988, DuPont announced that it would begin leaving the CFC business entirely after a 15 March NASA announcement that CFCs were not only creating a hole in the ozone layer above Antarctica but also thinning the layer elsewhere in the world.

Lewis du Pont Smith, in an April 27, 1994, open letter to shareholders on DuPont’s CFC Policy, warns that DuPont Corporation will be destroyed when a consumer backlash demands a Congressional investigation “regarding the science behind the ozone depletion fraud and the economic forces that pushed for the CFC ban.”

Lewis du Pont Smith calls this CFC policy “the most massive consumer fraud of this century.”

He writes that “The cost to consumers of the ban on CFCs will exceed $5 trillion: the consequences on human health will be devastating.”

DuPont announced that it would stop selling CFCs with a full page ad in the 27 April 1992 New York Times stating “we will stop selling CFC's as soon as possible, but no later than year end 1995 in the US and other developed countries.”^[16]

In later years, DuPont would maintain that the company had taken the initiative in phasing out CFCs^[17] and in replacing CFCs with a new generation of refrigerant chemicals, such as HCFCs and HFCs.^[18] In 2003, DuPont was awarded the National Medal of Technology, recognizing the company as the leader in developing CFC replacements.

Iraq's nuclear program

In a report submitted by Saddam Hussein to the United Nations shortly before the 2003 invasion of Iraq, it was revealed that DuPont had participated in Iraq's nuclear weapons program. (Though the U.S. attempted to redact the names of all U.S. companies involved, an uncensored copy was leaked to the press.)^[19][20] DuPont has not faced any sanctions because of this. The company denies that it sold materials to Iraq for any nuclear weapons program.

Further reading

• Arora, Ashish Ralph Landau and Nathan Rosenberg, (eds). (2000). Chemicals and Long-Term Economic Growth: Insights from the Chemical Industry.
• Chandler, Alfred D. (1971). Pierre S. Du Pont and the making of the modern corporation.
• Chandler, Alfred D. (1969). Strategy and Structure: Chapters in the History of the American Industrial Enterprise.
• du Pont, B.G. (1920). E.I. du Pont de Nemours and Company: A History 1802-1902. Boston and New York: Houghton Mifflin Company. - (Kessinger Publishing Rare Reprint. ISBN 1-4179-1685-0).
• Haynes, Williams (1983). American chemical industry.
• Hounshell, David A. and Smith, John Kenly, JR (1988). Science and Corporate Strategy: Du Pont R and D, 1902-1980. Cambridge and New York: Cambridge University Press. ISBN 0-521-32767-9.
• Kinnane, Adrian (2002). DuPont: From the Banks of the Brandywine to Miracles of Science. Willimington: E.I. du Pont de Nemours and Company. ISBN 0-8018-7059-3.
• Ndiaye, Pap A. (trans. 2007). Nylon and Bombs: DuPont and the March of Modern America

See also

• Alfred I. duPont Hospital for Children
• DuPont and C-8
• Du Pont family
• Hagley Museum and Library
• Longwood Gardens

References and notes

• Corporate History as presented by the company: Online Interpretive Exhibit. E.I. du Pont de Nemours and Company (6 June 2002). Retrieved on 2006-12-12.

• EWG Public Affairs (December 14, 2005). "EPA Fines Teflon Maker DuPont for Chemical Cover-Up Largest Administrative Fine in Agency's History Shows Seriousness of Polluting Babies' Blood and Drinking Water". Environmental Working Group (EWG).
• Preliminary Risk Assessment of the Developmental Toxicity Associated with Exposure to Perfluorooctanoic Acid and its Salts. United States Environmental Protection Agency (2005-12-16).