Chemours plant closure casts doubt on chemical industry's future in Delaware
As Chemours announces it'll close its 80-year-old plant in North Wilmington, Delaware's business community is weighing an uncertain future.
The chemical industry was once a cornerstone of Delaware's economy, thanks to giants like DuPont. But the bricks-and-mortar part of that business isn't what it used to be.
"It's disappointing, but not necessarily totally surprising that they've closed the Edge Moor plant," says state chamber of commerce president Rich Heffron.
He says it was likely cheaper for Chemours, which spun off from DuPont in July, to close Edge Moor rather than overhaul it.
"I think this was an older plant, and the product they were manufacturing is not as in demand as it was at one time," he says. Prices for titanium oxide, the commonly used white pigment made at the plant, are at a seven-year low. "And what it would cost to take this plant and change product is probably too expensive. So you take all three of those factors together -- they close the plant, produce the product somewhere else, which is exactly what they're gonna do."
The closure does mean the loss of around 200 jobs -- those employees will either be transferred out of state or let go. Heffron says there are other jobs being created in the First State, but "these jobs aren't paying the same amount as the jobs that we're losing, or have lost," says Heffron.
"That's a concern," he says. "And manufacturing jobs are at the top of that list. … In today's economy, they're difficult to replace."
Heffron says the state is doing a good job training workers in advanced manufacturing -- it's even a class in some high schools now. Down the line, he hopes that'll entice businesses to create those jobs here at home.
"I think the next shoe to drop is the discussion of whether or not they will leave Wilmington and seek a lower-cost city for their headquarters."
But this may just be the beginning of Chemours' exit from Delaware.
"I think the next shoe to drop is the discussion of whether or not they will leave Wilmington and seek a lower-cost city for their headquarters," says corporate site selection analyst John Boyd, who's based in Princeton, N.J. "Businesses will continue to find Delaware attractive to domicile themselves for tax purposes, but where they decide to put their brick & mortar facilities and their workforces -- that's a different question entirely."
Chemours has been noncommittal about whether it plans to leave Delaware's largest city -- but it is looking to cut costs. The company also announced Thursday it’s closing a production line in Tennessee. Still, the company has pledged to remain headquartered here for at least 18 months:
"So the state has some time here to offer Chemours new incentives, as well as prepare and craft a message to attract new rateables to the state," he says.
As part of that, Boyd says Delaware should consider enacting a right to work law, which says employees don't have to pay union dues in unionized workplaces.
"We need to decide who we are -- what type of industry we would like to have here, what type we'd like to attract."
The Chamber's Rich Heffron says he's not sure if right to work is the answer -- but he says the state does need to talk options in order to get the most use out of the old Edge Moor site, and to shore up its economic future.
"We need to decide who we are," Heffron says. "What type of industry we would like to have here, what type we'd like to attract."
For cues, John Boyd says Delaware should look to cities like Houston, Oklahoma City and New Orleans, which have established chemical industries and business-friendly state laws. He thinks Chemours might look there too.