Dow Chemicalsaid Tuesday it would shut down a number of plants and eliminate about 1,000 jobs to cut costs and direct capital toward businesses with better growth prospects.
The largest U.S. chemical maker said it would incur a related charge of $500 million to $600 million, which includes severance costs and asset write-downs.
The plant shutdowns and job cuts will generate annual savings of about $180 million, the Midland, Michigan-based company said.
Dow this year has been hurt by soaring hydrocarbon feedstock and energy costs. It has been attempting to improve its earnings through a series of joint ventures and by expanding its more profitable specialty businesses.
"Our focus on financial discipline and low cost ... remains as sharp as ever, and we will continue to seek ways to refine our organizational structure, asset base and business portfolio," said Chief Executive Andrew Liveris, in a statement.
The company said it will exit the automotive sealers business in North America, Asia Pacific and Latin America within the next nine to 18 months. It will also explore strategic options for the business in Europe.
It will also take an impairment charge related to its plan to shut down its agricultural sciences manufacturing facility in Lauterbourg, France.
Dow plans to exit the business due to overcapacity within the industry, a disadvantaged cost position, and increasing pressure from generic suppliers.
The company will also write down an investment in its Petromont polyethane joint venture in Canada. Polyethylene is a very common plastic used for bags.
Shares of the company, which have fallen 3.5 percent over the last three months, closed at $41.54 Monday on the New York Stock Exchange.