NewsHistory Of DuPont, Between Gunpowder, The Accounting Revolution And Controversy

History Of DuPont, Between Gunpowder, The Accounting Revolution And Controversy

The history of the United States could not be understood without DuPont. Nor could the concept of the American dream be understood. Because the history of the company, born more than 200 years ago, is intimately linked to the great events that have defined North American society.

Pierre Samuel du Pont de Nemours, a Huguenot born in Paris in 1739, was an ambitious economist, publisher, and politician, close to the court of Louis XVI, thanks to his writings and ideas on free trade. The king gave him different positions, and counted on him to negotiate the Treaty of Paris, by which England recognized the independence of the United States. At first, he supported the French Revolution, but ended up physically defending Louis XVI and Marie Antoinette during the assault on Tuileries. He was sentenced to the guillotine, but was spared by the fall of Roberpierre. He immigrated to the United States in 1799.

There he was able to take advantage of the contacts he had made during the negotiation of the Treaty of Paris, especially with Thomas Jefferson. But the protagonist of the company that bears his surname is not him, but his son, Éleuthère Irénée, who founded EI du Pont de Nemours & Company in 1802 . It was launched when, while on the hunt, he realized that the poor-quality and expensive gunpowder market offered great potential.

With French capital and machinery imported from Europe, he created the first factory, which produced powder of such quality that it achieved great sales from the first moment. In addition, taking advantage of his family closeness to the Government, he began to sell gunpowder to the army. With the outbreak of the war of 1812, sales multiplied. By the middle of the 19th century it was already the largest supplier of gunpowder in the country, thanks, in part, to the gold rush, the wars against the Indians in the westward expansion, and the conflicts in which the United States is involved. In the Civil War, DuPont already supplied half of the gunpowder for the Union army.

But the great leap occurs with the turn of the century. At the beginning of the twentieth century they stopped focusing only on warfare (although an agreement to manufacture and distribute dynamite triggered their sales), and expanded into new sectors, creating two pioneering research laboratories, which develop new products such as cellulose or lacquer. . It also began manufacturing nitrocellulose plastics, and acquired several companies to add new product lines such as colorants, paints, acids, or heavy chemicals.

In the 1920s they began to bet on the development of polymers, an effort from which some of the most important products and patents in its history emerged, such as nylon, neoprene, Plexiglas or Teflon.

The accounting revolution with the creation of ROE
It also enters the automotive industry, by taking over a significant package of shares in General Motors. Pierre du Pont came to preside over the company, leading it to world leadership. He had to sell his stake because of antitrust laws.

But the most important part of the relationship between DuPont and General Motors has to do with accounting. One of the commercials issued an internal report in which he proposed a formula on the return on investment, which is still known today as the DuPont Formula, and which over time has become the famous ROE, or return on capital. This formula represented a giant step in the evolution of companies, which only measured sales and costs, laying the foundations of modern management.

Despite diversification, war efforts remained key for the company. Nonetheless, wars were a testing ground for their new products. They were suppliers to the US of products for wheels, parachutes … and, of course, gunpowder. In addition, during that time, they participated in the Manhattan Project for the development of the atomic bomb, with the construction of facilities.

Entry into the oil business with the purchase of Conoco
The next big step for the company occurred in the 1980s, when it entered the oil business with the purchase of Conoco. That operation, which then became the largest merger in history, ensured DuPont’s access to the supply of oil, essential to produce its products. It was key, for example, in the launch of its stain-resistant rugs, which became the best-selling in the United States.

In 1999, DuPont sold its stake in Conoco, and entered a new business era with the purchase of a hybrid corn seed producer, becoming one of the largest producers of hybrid and genetically modified plants in the world.

In the early years of the 20th century, it sold or spun off some of its main businesses.

The merger with the Dow Chemical Company, America’s other great chemist, was the last big change. The process is completed in 2017, and results in a new company, valued at $ 130 billion. The board of directors of both companies decides to separate the group into three independent listed companies, each specialized in one field: an agricultural company, called Corteva; one of science of materials, plastics and other chemicals, which is Dow; and another for specialized products, which is DuPont. The latter includes everything related to nutrition, health, electronics, communications, and security and protection.

In a history of more than 200 years, DuPont has not been without controversy. The most important is surely that of C-8, a product used to obtain Teflon, and for which it was denounced for hiding its effects: it is a carcinogenic material, which can cause malformations in pregnancy and other health problems. He had to pay millions of dollars in fines and compensation.

It was also, together with General Motors, the creator and maximum producer of CFCs, a family of substances that are harmful to the ozone layer. They also had to face another controversy over the pressure they exerted on a publishing house to prevent the distribution of a book (‘Dupont, behind the nylon curtain’), which criticized the role of the Du Pont family in American society.

In addition to numerous allegations throughout history of pricing on different products.

Almost 220 years later, DuPont maintains its headquarters in Wilmington, the same place where it was founded. It employs almost 100,000 people around the world, many of them scientists and engineers. And it has been key in business history, for better and for worse.

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