Dupont Company

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DUPONT COMPANY

E.I. du Pont de Nemours & Company, better known as DuPont, developed from a family business, which manufactured gunpowder and explosives, to a multinational corporation that produces petroleum, natural gas, chemicals, synthetic fibers, polymers, and various other products. DuPont brand names—such as nylon, Teflon, Lycra, and Mylar—are part of the everyday vocabulary of people across the world. At the end of 1998 DuPont employed about 84,000 people in 70 countries and was the sixteenth largest industrial service corporation in the United States.

The founder of the company was the French nobleman with the impressive name of Éleuthère Irénée du Pont de Nemours, who had studied with the famous chemist Antoine-Laurent Lavoisier. Du Pont came to the United States in 1797 and built a gunpowder factory on the Brandywine River in Delaware. His sons continued producing superior gunpowder after his death and also manufactured smokeless powder, dynamite, and nitroglycerine.

When competition in the early twentieth century became fierce, shareholders of the company voted to sell the company to the highest bidder. Alfred I. du Pont and two of his cousins, Pierre S. du Pont and Thomas Coleman, acquired the company in a leveraged buyout in order to keep it in the family. Pierre du Pont and Coleman, with Alfred in a lesser role as vice president, guided DuPont to unprecedented success, acquiring 54 other companies within three years. By 1905 DuPont held a 75 percent share of the U.S. gunpowder market and had become a major producer of explosives and one of the nation's largest corporations. With laboratories in New Jersey and Wilmington, Delaware, it was one of the first American companies to devote itself heavily to research. DuPont had also become the economic lifeblood of the state of Delaware.

Much of the company's success was due to its efficient structure, which designated different levels of management. In this sense, DuPont profoundly influenced the way U.S. corporations were run. Too much success, however, ultimately worked against the company. DuPont controlled so much of the explosives market that in 1912 the U.S. government ordered it to divest itself of a number of its assets. Adding to the company's troubles was a continuing feud between Alfred du Pont and his cousins, who eventually took away all of Alfred's real responsibilities within the organization.

DuPont continued to diversify in the early 1900s. Pierre Samuel du Pont began to buy General Motors (GM) stock in 1914, and he soon became embroiled in a struggle for power within that company. William C. Durant (1861–1947), founder of GM, fought to maintain control of the company, which he later lost. Pierre du Pont eventually acquired enough stock to be a dominant force within the company during the 1920s. This facilitated an economic relationship between General Motors and DuPont, and DuPont began selling to GM its Duco paint, antifreeze, and lead additive for gasoline.

DuPont also expanded into the textile business, manufacturing artificial fibers for use during World War I (1914–1918). When the company acquired rights from the French to manufacture cellophane in the 1920s, it began manufacturing rayon and developed a stronger version of the cord used in automobile tires. By far the most important of DuPont's creations was nylon, developed in 1930 by a research group headed by Wallace H. Carothers. DuPont's thermoplastics division spun off all kinds of products, including shower curtains, radio dials, eyeglass frames, and screwdriver handles.

In many ways, DuPont contributed to the American effort to win World War II (1939–1945). Through a partnership with the U.S. government, DuPont established an atomic bomb research center in Hanford, Washington. After the war women lined up to purchase DuPont-produced nylon stockings, which had been unavailable during wartime. Some of DuPont's other product innovations included neoprene, Lucite, Orlon, and Dacron, products that revolutionized the global consumer industry.

DuPont's string of successes came to a halt in the mid-1970s, when the demand for artificial fibers began to decline, and the costs of raw materials increased. DuPont's concentration on rebuilding its old business rather than branching out into new areas cost it dearly; moreover, a recession in 1980 hurt the company. In that same year, however, the development of a product called Kevlar brought renewed success. Kevlar was a light, strong polymer with five times the tensile strength of steel. It could be used for such products at fire-resistant clothing, tire reinforcements, and bulletproof vests. Its cost, however, was high since it was derived from petroleum.

Mergers and acquisitions in the 1980s helped bring DuPont out of the recession. The most important of these was the acquisition of Conoco, which provided DuPont with oil at competitive prices. DuPont also involved itself in joint ventures with such companies as P.D. Magnetics, the Sankyo Company (pharmaceuticals), the Mitsubishi Rayon Company, and British Telecom (optoelectronic components). The company, moreover, began to branch out from stock chemicals and petrochemically based fibers into the life sciences, taking on such fields as genetic engineering and the manufacture of heart medications and the cancer-fighting drug interferon. In addition, DuPont took part in the development of pesticides and electronics parts supplies. By the mid-1980s DuPont owned about 90 businesses that sold a wide range of products.

In the late 1980s, however, management at Du-Pont decided that the company should begin concentrating on its most profitable areas—oil, healthcare, electronics, and specialty chemicals. While divisions such as pharmaceuticals and electronics were losing money, textiles continued to be its most successful product line, and the company began to publish a consumer products catalog featuring items made from its well-known fibers, such as Lycra, Zytel, and Supplex. The stretch polymer Lucre, favored by many fashion designers, became a big seller.

During the late 1980s and early 1990s DuPont paid particular attention to pollution control and cleanup, gradually replacing its environmentally harmful chlorofluorocarbons with safer chemicals, at a cost of $1 billion. The company also began to market safer pesticides and entered the growing recycling market.

With the exception of a temporary rise in profits for Conoco as a result of the Persian Gulf War (1991), most of DuPont's operations lost ground during the early 1990s. The company began restructuring, divesting itself of unprofitable components and reducing staff levels. DuPont also concentrated more on its chemicals and fibers divisions, acquiring polyester technology from ICI; meanwhile, ICI bought out Du-Pont's acrylics business.

In the 1990s DuPont began to recover from the downturn of the 1980s. The company posted record profits in 1994 and 1996, and stock prices rose. New joint ventures in the areas of synthetic fibers, chemicals, and agricultural products continued to turn profits. In 1997 DuPont purchased a division of Ralston Purina that manufactured soy products, and also bought out Merck's share in the DuPont Merck Pharmaceutical Company. In an effort to concentrate on its core businesses, DuPont divested itself of Conoco in 1998. In that year DuPont had a net income of $4.7 billion. Nearing the close of the twentieth century, the company could safely boast that DuPont products had become inseparable from the everyday life of most societies in the world.

See also: E.I. du Pont, William C. Durant