DuPont Co. is cutting research-and-development spending as Chief Executive Ed Breen seeks $1 billion of cost savings before the completion of its historic merger with Dow Chemical Co.
The R&D cuts follow the thousands of job losses announced in December. R&D expenditure will fall to $1.6 billion to $1.7 billion, Breen said Tuesday on the Wilmington, Del.-based company's fourth-quarter earnings conference call. That's less than the $1.9 billion or more spent in each of the prior two years.
DuPont's research and development program has given the world nylon stockings, Kevlar bullet-resistant vests and Nomex fire-resistant overalls. Breen said he's not concerned that the cutbacks will hurt product development because they focus on the company's riskiest projects and spending will still be in line with the 15-year average.
"If we went much deeper than that, I wouldn't have done it," he said.
Breen was reappointed as CEO in November and is reshaping DuPont at "light speed," said Matt Arnold, an analyst at Edward Jones & Co.
"Does this harm the pipeline a few years out? It threatens to," Arnold said Tuesday. "I'd have deeper-rooted concerns if the whole thing wasn't getting rewired in coming months."