The DuPont Co. Appoints New CEO

Having shifted under chief executive Charles Holliday Jr. from a traditional chemicals business to a science and biotechnology company, DuPont Co. will keep branching out under incoming CEO Ellen Kullman.

DuPont announced Tuesday that Holliday is stepping down after 10 years as CEO and will be replaced by Kullman, 52, the first female chief executive of a major U.S. chemical company.

Kullman, an executive vice president, has spent 20 years with the company and formerly led the unit that makes the material for body armor.

She will become president and director on Oct. 1 and chief executive on Jan. 1.

Kullman, who once described DuPont's focus on internal research as being too insular and arrogant, said she will work to make the company's commitment to science-based innovation pay off.

"Without the science, we won't have the differentiation in the marketplace ... It is what makes us who we are," she said Tuesday.

But that doesn't mean DuPont will turn inward and rely solely on its own research to propel itself forward. Earlier this year, Kullman said she expects DuPont's future growth will come as much from what is integrated from outside the company as is internally generated.

"I know that if I'm not looking outside for what's going on, my competitors are," she told an audience at the Massachusetts Institute of Technology.

Known among colleagues for her marketing prowess, Kullman was tapped earlier this year to lead planning for DuPont's growth in emerging markets.

Democratic gubernatorial candidate and State Treasurer Jack Markell, a former telecommunications executive who lived next door to Kullman for 10 years, said she excels in strategic analysis and implementation.

"She's incredibly smart, she's very focused ... She relates well to people, but behind that is somebody with steely determination and a very fertile mind," said Markell, who got a phone call on Monday from Kullman in advance of Tuesday's announcement.

Under Holliday, 60, DuPont has sought an edge over its competitors in the chemical industry by breaking from its past and embracing new technologies.

A key milestone in that strategy came when DuPont, which gave the world nylon, announced the sale of its synthetic fibers business to Koch Industries in 2003.

"That was a huge change," Kullman said. "Basically, the start of modern chemistry within the DuPont company started with that area."

Having completed its divestiture of Conoco oil holdings in 1999, shortly after Holliday became CEO, DuPont repositioned itself as a science-based company focusing on five distinct platforms: agriculture and nutrition, performance materials, safety and protection, electronic and communication technologies, and coatings and color technologies.

Another key to that transformation was the 1999 acquisition of Pioneer Hi-Bred International, which paved the way for genetically engineered seeds and other initiatives that combine agriculture with chemistry to produce materials such as biofuels.

Kullman said Holliday asked her in 1999 to lay the groundwork to market DuPont's fledgling biotechnology, and that she became enamored with its potential.

"He created that investment, he drove it, he defended it when people said it's never going to pay off," she said.

Despite high raw material prices, DuPont set an earnings record for the first half of 2008 on the strength of its agriculture and nutrition segment and growth in emerging markets.

Overall, DuPont has completed more than $60 billion in transactions under Holliday's tenure that have changed the company while bolstering earnings.

In a conference call Tuesday, Holliday said the decision to step down was voluntary.

"I could not be more pleased with the support I've had from the board," he said, adding that the company's strong position makes this the right time for a transition.

Kullman will eventually succeed Holliday as chairman.

Gene Pisasale, an analyst with PNC Capital Advisors in Baltimore, said DuPont has been grooming Kullman for several years, and that tapping her was no surprise.

Kullman downplayed any notion that she was Holliday's heir apparent.

"Obviously, I felt that I was being considered, but I did not have any comprehension of the timing," she said.

In 2006, Holliday challenged Kullman, then ensconced in overseeing DuPont's safety and protection unit, by adding the coatings and color technologies business to her list of responsibilities.

"He wanted to see how I utilized the skills I had developed," she said.

Kullman, a native of Wilmington, Del., where DuPont is headquartered, said a key challenge for the company will be fostering innovation while continuing productivity gains. She and Holliday said the timing of Tuesday's announcement ties into its 2009 planning.

"I need to own it and I need to drive it," said Kullman, who has degrees in mechanical engineering and business management.

Kullman's husband, Michael, works for DuPont as a marketing director. She said the company has specific protocols to ensure personal relationships do not conflict with business responsibilities.

While Kullman will be in the driver's seat starting in 2009, she has said her management style will be as much about cooperation as command and control.

"The higher you get, the less control you have, and you have to moderate your command and control into an influence model," she said in her speech at MIT. "And at DuPont an influence model is very important to be effective ... It's engaging people and getting them aligned toward the goal and letting them go, and holding them accountable."

DuPont shares closed down 70 cents, or 1.5 percent, Tuesday at $44.69. For the year, they have traded between $52.49 and $40.43.