IEDC official: Full-court press averted disaster, yielded ‘home run’

A top Indiana economic development official on Friday said Indianapolis’ designation as a "global business center” for Dow Chemical’s and DuPont’s merged ag business is “a huge home run” that ultimately will bolster employment at Dow AgroSciences’ northwest-side campus.

It’s an especially favorable outcome, Indiana Economic Development Corp. President Jim Schellinger said, given the IEDC’s realization during negotiations that the city could have lost the entire 1,385-worker Indianapolis operation.

Schellinger said the state took a stab at landing the headquarters for the combined business—which will have $18 billion in revenue and 21,000 employees—but recognized it faced significant obstacles, including DuPont’s deep roots in Wilmington, Delaware, where it was founded in 1802 and where it ultimately decided to locate the headquarters.
 

While missing out on the headquarters was a setback, Schellinger said economic development officials and government leaders in Indiana were able to put to rest the idea of consolidating the Indianapolis operations into DuPont’s ag business, Pioneer, which is significantly bigger than Dow AgroSciences and is based in suburban Des Moines, Iowa. Instead, Dow and DuPont made the Pioneer headquarters another global business center.

“We went in thinking we had everything to gain and nothing to lose. And once we were in the middle of the process, we said, ‘Wow, we could lose everything,’” Schellinger told IBJ.
 

Consolidation would have wiped out some of Indianapolis' most-prized jobs. The average annual wage for the Indianapolis workforce, which includes about 800 researchers, is $130,000. Dow also has about 400 contract workers locally, bringing the total jobs at stake to about 1,785.
 

Schellinger said Indiana achieved the favorable outcome in large part because of the direct involvement of Gov. Mike Pence, Indianapolis Mayor Joe Hogsett and Purdue University President Mitch Daniels, who worked seamlessly as a team even though they aren't all from the same party. 
 

“I think it is the total differentiator here,” Schellinger said of the three men’s involvement, which included numerous cell phone conversations with executives of the two companies.

Purdue long has had close ties to Dow AgroSciences, and its research park in West Lafayette houses a company greenhouse and research facility.
 

Schellinger said other key factors were the state’s business-friendly environment and its stability, as reflected in its AAA credit rating, balanced budget and robust surplus.

DuPont and Midland, Michigan-based Dow announced their historic merger of equals on Dec. 11. They hope to close the deal in the second half of 2016, the first step in a plan to break apart into three publicly traded businesses, one of them focused on agricultural products, including herbicides and genetically modified seeds. That new, as-yet-unnamed business will be the largest global player in crop protection and seeds.

Even though Dow and DuPont remain competitors for now, the companies decided to go ahead and announce the corporate structure for the combined ag business to quell unease among employees and other stakeholders.
 

Schellinger said Pence, Hogsett and Daniels were all on hand when Dow CEO Andrew Liveris, DuPont CEO Ed Breen and other executives visited Dow AgroSciences' headquarters to conduct due diligence on Jan. 14.
 

The next big meeting was in Wilimington on Jan. 21. That included Secretary of Commerce Victor Smith and Schellinger, as well as Hogsett’s deputy mayor for economic development, Angela Smith Jones, and Ted McKinney, the director of the Indiana Department of Agriculture.
 

Schellinger said Dow and DuPont finally delivered the good news—the designation of Indianapolis as a global business center—on Feb. 11 at a meeting attended by Pence and Hogsett at the governor’s residence.

Schellinger said he believes the full-court press from the top leaders in the city and state “had everything” to do with the favorable outcome.