When Chemours spun off from DuPont in July 2015, it immediately found itself in hot water, saddled with debt, non-performing businesses, and far more employees and facilities than it could support. Running this new company was Mark Vergnano, a long-term DuPont executive, who had asked for the assignment. Chief Executive’s editor-in-chief, Mike Winkleman, spoke with Vergnano about how the new company dealt with its initial challenges, its plans for the future and the experience Vergnano has had building—and rebuilding—this company.
Q: Chemours is a startup that’s not a startup. You were faced with issues a regular startup would not have had.
A: We talk about ourselves as a startup with a 200-year head start. We had a great legacy, but we’re a brand-new company. We started with $4 billion of debt and other liabilities, and one of our businesses was in the bottom of its cycle. On the day we launched, we had a lot of excited employees, but the next day, we realized we had a lot of challenges. We had to cut costs significantly, and to focus on the businesses that were leaders in the fields we played in, we sold three businesses that were not.
Q: In the process, you faced criticism as you laid off chemistry PhDs, closed plants and watched your stock price fall.
A: We were in a tough market environment and decided we had to focus on the things we could control. We reduced about 15 percent of our workforce and shut down facilities that were not going to be part of our future. We had to focus on the 8,000 people who were going to be staying with us, to make sure we’d take care of the customers that were dependent on us and make sure our investors got the return they deserved.
VERGNANO’S KEY PRINCIPLES
- 1. Put a plan together that’s clear to your organization and focused on what you can control.
- 2. Build massive transparency, making sure the organization understands where you are at every step, even when you have flips.
- 3. Deliver on your commitments and on the promises you’ve made to employees, customers and investors.
Q: How has it worked?
A: There were worry points at the beginning. We were not a proven leadership team. We didn’t have a track record. But as people started seeing us execute on our plan and deliver on our promises quarter after quarter, confidence started coming back. Now we’re on our path. Our transformation plan goes through the end of this year. The next step is what’s beyond 2017. It’s all about growth, organically and inorganically.
Q: How have customers responded?
A: We told our customers they might have had a relationship with DuPont, but Chemours was going to be a different company. It was going to be more customer-centered. Like DuPont, it was going to have high integrity and an obsession around safety, but we want to be more entrepreneurial and simpler, quicker on decisions and nimbler in dealing with customers. We’ve not only been able to retain customers, but also to build new customers who have seen a little different attitude from us.
Q: In seeking to retain and renew talent, have you had to do business differently?
A: Yes, in a couple ways. One is a value we set up the first day: collective entrepreneurship. We want to have the flexibility to do different things. We found this has been extremely attractive, especially for millennials. The other value we call “refreshing simplicity,” making things not complex, not hierarchical. Chemours has a lot of the benefits of DuPont in terms of technology, of integrity, of a culture of safety, but we’re very different in terms of this entrepreneurial spirit and simplicity.
Q: Given what you’ve faced and that this is your first time as CEO, how has the experience been?
A: It’s been great. Despite the tough start, being able to set a course on values, to create a culture with like-minded folks has been really positive. Our executive team is really small. There are only eight of us and three came from the outside, so we were able to blend experience from DuPont but also mesh that with folks who’ve thought about things a different way.
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