DuPont

E.I. du Pont de Nemours & Company is undoubtedly better known by consumers under the moniker DuPont, the oldest family name in American preindustrial wealth. Its reputation is synonymous with organic chemistry. Founded in 1802, the company began as a partnership in gunpowder and explosives. DuPont grew from a family business to a multinational conglomerate through the acquisition of competing companies and through the diversification of product lines. As of 1998 the company operated 30 petroleum refineries and natural gas processing plants through its Conoco subsidiary and 135 manufacturing and processing facilities throughout the world that produced chemicals, synthetic fibers, polymers, and biotech products for a number of different industries. Founder Éleuthère Irenée du Pont de Nemours was born to French nobility. He studied with the chemist in charge of manufacturing the French government's gunpowder, Antoinne LaVoisier. The years of turmoil preceding the French Revolution caused him to immigrate to the United States in 1797. He chose to build his production facilities on a site on the Delaware's Brandywine River, which was central to all of the states at the time and provided sufficient water power to run the mills. Du Pont rapidly established a reputation for superior gunpowder. He died in 1834, leaving his sons Alfred and Henry to buy out French financiers and continue the business. His sons expanded the company's product line into the manufacture of smokeless powder, dynamite, and nitroglycerine. Sound management, luck, and hidden wealth resulted in the acquisition of 54 companies within three years. Pierre set out to dominate the industry through payoffs and by purchasing minority shareholders and vulnerable competitors. When the cousins first incorporated in 1902, the company controlled 36 percent of the U.S. powder market. By 1905 it held a 75 percent share of the market. DuPont alone supplied 56 percent of the national production of explosives, with $60 million in estimated assets; it had become one of the nation's largest corporations. A new method of operation was required to keep track of the rapidly growing organization. The cousins solicited the aid of Amory Haskell and Hamilton Barksdale, managers who had reorganized their dynamite business into an efficient organization. They remodeled the unwieldy company using elaborate family tree charts composed of levels of managers. The new structure revolutionized American business and gave birth to the modern corporation. The system of organization worked so well that Pierre bailed out the then struggling General Motors Corporation, buying 23 percent of the shares and applying the skills DuPont had perfected. (The Department of Justice later ordered DuPont to divest its General Motors holdings in 1951.) DuPont grew to command the entire explosives market. So dominant were they by 1907 that the U.S. government initiated antitrust proceedings against them. DuPont was deemed a gunpowder monopoly in 1912 and ordered to divest itself of a substantial portion of its business. In addition, early years of incorporation were fraught with tension between Alfred and his more practical cousins. Arguments ensued over the modernization of the Brandywine yards. Coleman and Pierre saw modernization as the only way to fully utilize the plant. The quarrel, along with other incidents, prompted Coleman and Pierre to take away Alfred's responsibilities in 1911. In effect, this left Alfred a vice-president in name only. Modernization, diversification, good management, and a command of the market characterized DuPont's industrial era phase. The experiments of DuPont chemists with a product known as guncotton, an early form of nitroglycerine, led to the company's involvement in the textile business. The end of World War I proved the peacetime use of artificial fibers to be more profitable than explosives. In the 1920s DuPont acquired French rights for producing cellophane. DuPont made