November 17, 2003
Volume 81, Number 46
CENEAR 81 46 p. 13
ISSN 0009-2347


27-year veteran is now the odds-on favorite for the top job


Dow Chemical has named Andrew N. Liveris president and chief operating officer, effective immediately. William S. Stavropoulos, who has been president, chairman, and CEO of the company since Michael D. Parker’s ouster in December 2002, has relinquished the title of president but will continue as chairman and CEO.

Stavropoulos had been CEO of Dow from 1995 to 2000 and was brought back after Parker, his successor, was forced out because of what the board of directors called the “disappointing financial performance of the company over the last eight quarters.” Parker had been CEO for just two years.

The move makes Liveris almost sure to become the next CEO at Dow, according to analysts.

Since April 2000, the 49-year-old Liveris has been president of Dow’s performance chemicals unit, which had 2002 sales of $5.1 billion, or almost 20% of the company’s total. A graduate of the University of Queensland, Brisbane, Australia, with a bachelor’s degree in chemical engineering, Liveris has had a 27-year career at Dow that includes positions in manufacturing, sales, marketing, new business development, and management.

Liveris has also served Dow in Australia and Hong Kong. In 1989, he was named general manager for all operations in Thailand and was responsible for the formation of the Dow-Siam Cement petrochemicals joint venture in that country, becoming its first managing director.

This breadth of experience seems to please Wall Street. John Roberts, chemical analyst at Buckingham Research, says the investment community looks upon the appointment very favorably, if for no other reason than it is the first move toward establishing a management plan for the future. But Roberts also notes that, given Liveris’ experience in the performance chemicals business, he will probably show a bias toward specialty over commodity chemicals. And Roberts views Liveris’ extensive Asian experience as a plus.

Harold T. Shapiro, presiding director of the Dow board, says, “We selected [Liveris] unanimously after considering his broad and diverse background of international business experience, strong strategic acumen, and demonstrated capacity for leadership, as well as his recognized respect for people and their contributions.”

In addition to continuing to focus on the company’s plan for financial recovery, Liveris will be initially responsible for reviewing Dow’s long-term strategy and developing an organizational structure that improves shareholder value.

The action plan developed upon Stavropoulos’ return calls for a cut in structural costs of $400 million in 2003, including a workforce reduction of 3,000 to 4,000 positions, and a decline in capital spending of $400 million. Through the third quarter, Dow says, structural costs have been reduced by $380 million, jobs are down by 3,100 positions, and the company is on track to meet the capital spending goal.

However, the pressure is still on. “Underpinning this appointment will be a dedication to our short-term action plan for controlling expenses and strengthening our price and volume position in the marketplace to improve earnings and cash flow,” Stavropoulos says. “Given the changing dynamics of the global industry, Andrew will lead a strategic review of the company in order to manage our businesses for long-term value.”

Not all Dow businesses will report to Liveris in his new capacity. Those that will include performance plastics, performance chemicals, chemicals, plastics, hydrocarbons and energy, and most geographic regions. Dow AgroSciences and the Latin American regions will continue to report to J. Pedro Reinhard, executive vice president and chief financial officer.

Dow has also announced the formation of the Office of the CEO—a newly created leadership team consisting of Stavropoulos, Liveris, Executive Vice President Arnold A. Allemang, and Reinhard. “This office will assure that Dow delivers on its strategic priorities and integrates all dimensions of the company,” Stavropoulos says.


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