ANDREW LIVERIS, 60, has run Dow Chemical, a very large and complex $57 billion company, for more than a decade. It has 201 sites in 36 countries, with six operating divisions making petrochemicals, specialty chemicals and agricultural chemicals. Dow is a company in transition. Two generations ago, Dow had the capital and the R&D to invent products entirely on its own. Products like Saran Wrap, Styrofoam, Ziploc bags and Scrubbing Bubbles were all Dow from start to finish but have been long since sold-off. Today, it’s working on things like self-healing materials and printable batteries. Barron’s Andrew Bary said that “Dow Chemical could be one of the industry’s best growth stories.”
The company, which boasts a market cap of $60 billion, has an underappreciated asset base that includes a large petrochemical division that benefits from low domestic costs for natural gas and related liquids. Liveris began implementing a program of divestitures of lower-return operations. Although its shares were up 20 percent in 2014 and over 50 percent from 18 months ago, the company has been under pressure to improve its performance since activist investor Third Point Capital, led by Daniel Loeb, revealed a stake in January of 2014. Resisting Loeb’s criticism that Dow needs to be broken up to realize value, Liveris, nonetheless, has stepped up his program to sell businesses worth between $4.5 billion and $6 billion by the end of 2015. (Liveris also agreed to add two directors chosen by Third Point to Dow’s board.)
The Darwin, Australia-born Liveris is a well-established senior CEO statesman and is a familiar figure in the corridors of power in Washington. He is a co-chair of President Obama’s advanced manufacturing partnership and a director of IBM. He was chairman of the U.S. Business Council until he was succeeded by Jeff Bezos at the end of last year. He also is a big fan of the periodic table of the elements in that “chemistry’s an enabler for human life.” He adds, “chemistry is a personal passion but it is also a wonder. It enables us to sustain 7 billion people on this fragile planet, and it will go to 9 billion. How have we done that? Chemistry provides a solution, whether it’s clean water, affordable medicines, affordable housing—all this comes from chemistry.”
Following are excerpts of Liveris’ conversation with Chief Executive Editor-in-Chief J.P. Donlon at the CEO2CEO Summit on restoring American competitiveness.
Q: After you and fellow members of the Business Roundtable recently met with the President, you said you sensed a change in tone since the elections. What exactly is different?
ANDREW LIVERIS: A one-liner I got from another CEO is that, “You’ve got to go to Washington because if you’re not at the table, you’re likely on the menu.” Without sounding naive, I do think there is an opportunity here. We met with John Boehner, Mitch MicConnell, the new Senate leader and the President. They were saying much the same thing. Given that this is the President’s last two years, this is his chance to put a stamp on the American economy, which he hasn’t done, really.
For their part, the Republicans clearly understand that now that they control Congress and have a presidential run to think about in 2016, they’ve got to show that they can govern. Each side has different motives, but the result may be good for America because we all agree that America must continue to grow the economy.
Relatively speaking, ours is the best-performing economy in the world; but we’re still underperforming, given our historic growth rate. Weeks earlier, I was with the President in China and had a private conversation with him there. I think he’s serious about working with the other side. It’s going to be a skill set that he hasn’t shown, but I am optimistic [that] we might get something done in this Congress.