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DuPont Thriving with CEO Kullman at Helm

11:06 PM, Jan. 7, 2012

When Ellen Kullman stepped into the job atop the DuPont Co. three years ago, the business world was careening through its worst free-fall in 75 years.

The deep recession posed immediate tests -- including an overhaul that shut down production lines at more than 100 plants, cut 8,000 contract workers and 2,500 full-time positions globally and shaved more than $750 million in costs.

It was a jarring start for a woman who had risen through the ranks of the iconic Delaware company by building a reputation for innovation and skill at building sales and profits.

As she passes her third anniversary as CEO, Kullman, a third-generation Delawarean whose family owns a local landscaping business, is judged by most to have deftly steered the company through the long recession while still driving ahead with its transformation to a firm focused on biotechnology and emerging markets.

She has consistently trumped Wall Street's profit expectations each quarter, and her leadership has earned her global recognition -- most notably a ranking by Fortune magazine as one of the 10 most powerful women in business.

Her vision now extends beyond the fortunes of DuPont, with her advising President Barack Obama as a member of his Council on Jobs and Competitiveness.

As she spoke last month from the ninth-floor executive suite of DuPont's Rodney Square headquarters, Kullman stressed the need to address forces here and around the world preventing executives like her from fully setting aside economic woes.

Last month, she cut DuPont's 2011 forecast, saying that "economic uncertainty" was causing companies to hold onto cash and slowing DuPont's growth globally.

She pointed to turmoil in Europe but also at home, and especially in Washington, where partisan gridlock -- a source of uncertainty, Kullman said -- has become commonplace.

Kullman discussed the confounding U.S. tax system, America's shortage of engineers and even ways to revive tourism as a national economic development tool.

She had a few choice words for Washington politicians, who were then arguing over an extension of the payroll-tax cut for middle-class Americans.

"It's disappointing, and I take it all the way back to the debt-ceiling debate, that we can't figure out a government that can work together for the common good of the country," Kullman said.

Rise to the Top

Kullman, 55, born and raised Ellen Jamison, grew up in Fairfax Farms off Concord Pike and captained her basketball team at Tower Hill School.

Kullman went on to pursue a mechanical engineering degree at Tufts University in Medford, Mass., and later a master's in business administration at Northwestern University.

Kullman spent her early business years working in technical service and sales for Westinghouse, got her MBA and then moved on to General Electric in 1983. At GE, she worked directly for Edward E. Hood Jr., then GE's vice chairman, and close to Chief Executive Jack Welch, who Kullman considers an influence.

She joined DuPont in 1983 as a marketing manager and climbed the ladder, leading DuPont's titanium technologies business, selling white pigment for paints globally, and later taking over the company's $4 billion safety and protection franchise, which includes the bulletproof Kevlar fiber.

Gary Pfeiffer, a former chief financial officer of DuPont who worked on the executive team with Kullman, called her driven and agile. Kullman, Pfeiffer said, was able to lead a large business but also able to take on new projects or cut ties to a business that may not be performing up to par -- a difficult proposition for some big-business executives.

Kullman's agility was on display in 1998, when she left the top post of the titanium technologies business, overseeing thousands of employees, to create a consulting business around DuPont's safety practices, leading a team of five people.

"It was not just a new business, it was a new business model for DuPont," said Pfeiffer, now chairman of Christiana Care's board of directors. "You needed somebody who was smart and creative and a strong leader to decide whether that was going to be viable."

DuPont's consulting business continues to help companies globally reduce injuries, though the company does not break out sales figures for the unit.

As chief executive, Kullman spent $7 billion last year to double down on DuPont's biotech future, buying the Danish enzymes maker Danisco.

DuPont had previously partnered with Danisco to produce biofuel from corn stover. Last summer, the two companies announced plans to build an ethanol refinery in the city of Nevada, Iowa -- "ethanol plants use enzymes to break down the corn," Kullman explained recently.

Focus on Education

As Kullman worked to turn the DuPont ship toward new markets, her profile grew on the national stage. She holds a seat on President Obama's Council on Jobs and Competitiveness, working to address issues that have faced the economy since she took over three years ago.

With Facebook Chief Operating Officer Sheryl Sandberg, Kullman is co-leading an education task force that will release a report later this month.

The report remains closely guarded -- White House rules, a DuPont spokesman said -- but Kullman's group hopes to identify local programs that work to train workforces and improve programs for engineers, then scale them nationally.

"There are a lot of great ideas out there. They don't know how to get out of their own town, their own space. We'll finalize it in the next few weeks. What are those programs where the government should double down?"

Some work is also being done locally -- Kullman is working with former Sen. Ted Kaufman, D-Del., on a local council to promote education in areas of science, technology, engineering and math.

"Some people get involved in business to make money, and some people get involved in business in order to further other ideas and objectives," Kaufman said of Kullman last week. "I think she really cares about this education [campaign] and she's using the fact that she's the CEO of the corporation as a way to scratch an itch."

DuPont does, of course, have a stake in training engineers: A "baby boomer company," as Kullman described it, DuPont faces a wave of retirees in coming years, workers it must replace with able bodies.

"I think we'll be hiring in the next couple years at a rate we haven't seen since the 1980s," Kullman said, adding that company growth will account for some of the payroll expansion.

In 2012, despite economic headwinds that suppressed growth somewhat at the end of last year, DuPont forecasts that profits will rise 7 percent to 12 percent to a range of $4.20-$4.40 per share this year, on sales of $40-$42 billion.

What could help? Fundamental corporate tax reform, Kullman said. She's in favor of lowering rates but speaks most passionately in favor of the U.S. implementing a territorial tax system, which would not impose the 35 percent tax rate here on profits made overseas.

When picking sites for new factories, like a $500 million new Kevlar project in South Carolina, America's complex and costly tax system is often counted as a strike against locations domestically, Kullman said.

"The biggest driver is [having] certainty around the tax regime that we're operating in," Kullman said.

Asked for other ways to kick-start the economy, Kullman turned to an unlikely one, one that has little benefit for DuPont directly: tourism. Kullman suggested making it easier for citizens of other countries to visit the U.S. Lengthy and strenuous application processes often have international travelers overlooking the U.S., to America's detriment, she said.

"I think there's more the government can do around streamlining tourist visas just to put us on an even par," Kullman said. "The interesting thing is you see states advertising around tourism. Our country doesn't. Yet other countries do."

As for Delaware, Kullman said, DuPont remains committed to its operations here, even if they are smaller than a couple of decades ago.

Currently, about 8,000 of DuPont's 60,000 global employees work in DuPont's office buildings in Wilmington and Greenville, plus the sprawling Experimental Station research campus in Alapocas, a soybean research facility, Stine Haskell, near Newark, and several manufacturing sites across New Castle County. At its Edge Moor facility north of Wilmington, DuPont makes titanium dioxide, or Ti02, a pigment for the paper industry.

Kullman said Delaware's strategic placement along I-95 between New York and Washington and a trained workforce still make Delaware a good base of operations.

"I'm third-generation Delaware" resident, Kullman said. "My kids are fourth-generation. And I think that DuPont employees are proud of the company, and I think they are proud of being in Delaware."