Bloomberg News

DuPont Will Give Auto-Paint Business a ‘Chance’ to Meet Targets

December 13, 2011

Dec. 13 (Bloomberg) -- DuPont Co. Chief Executive Officer Ellen Kullman said the most valuable U.S. chemicals maker will give its auto-paints unit the opportunity to meet financial targets before considering its options for the business.

DuPont promoted John G. McCool a year ago to president of the performance-coatings segment, which includes auto paint, and gave him “very specific performance targets,” Kullman said today.

“From a performance standpoint, we’ll give them a chance to see if they can get there,” Kullman said in a meeting with reporters following an investor presentation at DuPont’s headquarters in Wilmington, Delaware.

“If any of our businesses can’t obtain their targets, obviously we’ll look at alternatives, whatever that means.”

DuPont is exploring a sale of the auto-paint division that may fetch as much as $4 billion, people with knowledge of the matter said Oct. 28. The company hired Credit Suisse Group AG to seek buyers for the unit, the people. The bank has yet to begin an auction process, according to the people.

The performance coatings segment of DuPont is the world’s biggest maker of automotive paint. It’s also the part of the company with the worst outlook, according to forecasts published earlier today by DuPont. The unit’s sales will rise 3 percent to 5 percent a year in the long term with profit margins expanding from 7 percent in 2011 to as much as 12 percent, DuPont said.

Companywide targets are for 7 percent sales growth and 12 percent margins.

--Editors: Simon Casey, Jessica Resnick-Ault

To contact the reporter on this story: Jack Kaskey in Wilmington, Delaware at jkaskey@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net


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