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Dow-Union Carbide merger
Union Carbide, Dow - images of
Bhopal, Vietnam War.
USA: August 5, 1999
NEW YORK - One was a target of anti-war protesters
during the Vietnam War, the other held responsible
for the world's worst industrial accident in Bhopal,
India.
On Wednesday, the companies, two of America's oldest
chemical firms, said they will merge to create a worldwide
behemoth.
The deal between Dow Chemical Co and Union Carbide
Corp., worth an estimated $11.6 billion including debt, is
expected to close in the first quarter of 2000 and will make
the new Dow second only to DuPont and Co. in the
chemical industry.
But, for all the familiar household brands they have given
the world - Dow introduced Saran Wrap and Styrofoam and
Union Carbide used to make Eveready batteries and Glad
plastic bags - the companies are probably just as well
known for the negative attention they have attracted.
Dow made component chemicals for the controversial
defoliant, Agent Orange, used by U.S. troops in Vietnam
and it became a symbol of the "military-industrial complex."
Between 1962 and 1971, the United States dumped over 19
million gallons of defoliant over 4.5 million acres of Vietnam
to make it harder for the Viet Cong guerrillas to hide. In
1969, scientists found a primary chemical in Agent Orange
could cause birth defects in animals.
In 1984, Dow and the other chemical companies that
produced Agent Orange and other defoliants paid $180
million to settle a class action suit brought by U.S. veterans
who charged their health was damaged by exposure to the
defoliants.
In recent years, Dow has also become embroiled in
litigation over silicone breast implants produced in a joint
venture with Corning Inc. Dow Corning Inc., which has
denied allegations from 176,000 women that the implants
caused health problems, agreed last year to settle for $3.2
billion.
Coincidentally, Union Carbide was also caught up in the
breast implant imbroglio and was named as a defendant in
some litigation because the company supplied silicone to
implant makers. It also was involved in the nuclear industry,
running the U.S. atomic laboratories in Oak Ridge, Tenn.
and Paducah, Ky. from the 1940s until 1984.
But Danbury, Conn.-based Carbide is probably best known
for the gas leak in Bhopal, India in 1984 that killed some
6,500 people and injured 20,000. Union Carbide had built a
pesticide plant in Bhopal in 1975 and kept 51 percent
ownership.
In 1984 a tank at the plant leaked 5 tons of poisonous
methyl isocyanate gas, killing and injuring workers and
people living around the plant. Resulting legal action against
Union Carbide led to a $470 million settlement in 1989.
But the reputation of Dow Chemical, which weathered
atakeover bid by DuPont in the 1920s, was battered during
the Vietnam War-era.
According to Hoover's Inc., the business reference source,
"Dow Chemical probably will never win the corporate 'good
guy' award at a Sierra Club (environmentalist) convention."
Indeed, during the 1960s, the Midland, Mich.-based
chemical giant was a frequent target of protesters who
would chant: "Dow Burns Babies Best."
"It was the epitome of the military-industrial complex - the
Darth Vader of the time," said one former anti-war activist of
the generation that came of age in the upheaval of the 60s.
But Dow, founded in 1897 by Herbert Dow, has emerged as
a major supplier of chemicals and plastics that go into
making everything from footwear to automotive interiors.
Last year it sold its Saran Wrap and Ziploc businesses.
Dow also produces herbicides and chemicals used in dry
cleaning, paint, and antifreeze and is the leading maker of
caustic soda, chlorine, ethylene, polyethylene, and
polystyrene.
Although the name Union Carbide may conjure up images
of the Bhopal disaster, the company which is also over 100
years old, has built a solid reputation as a chemical
producer.
Its basic chemicals and polymers segment turns out
building block chemicals such as ethylene and propylene,
which are converted into widely used polyethylene and
polypropylene plastics. It is the world's No. 1 producer of
ethylene oxide and ethylene glycol, used to make polyester
fibers and antifreeze, respectively.
Union Carbide Corp. traces its origins to two companies:
National Carbon Company (founded in 1886), which
manufactured carbons for streetlights and began the
Eveready brand, and Union Carbide (founded in 1898), a
maker of calcium carbide.
In 1917 the two companies formed Union Carbide & Carbon
Corp. UCC changed its name to Union Carbide Corp. in
1957, and in the early 1960s, introduced Glad plastic
household products, which it sold in 1985.
Story by Steve James
REUTERS NEWS SERVICE
--
Neil TANGRI