press release

Chevron Press Release - Chevron Chemical Announces Cost Reductions, Relocation Of Headquarters

SAN RAMON, Calif., March 12, 1999 - Chevron Chemical Company LLC today announced plans to implement a $76-million cost-reduction plan aimed at making the company a more competitive producer of petrochemicals, plastics and additives.

The plan involves reducing approximately 300 positions by mid-2000, and moving Chevron Chemical's headquarters to Houston by the third quarter of this year. Annual savings of $76 million would result by 2001, with much of it achievable in 2000.

(Chevron Chemical Company LLC, headquartered in San Ramon since 1987, is the largest non-petroleum subsidiary of Chevron Corporation. At present, about 5,000 CCC employees worldwide operate 26 manufacturing facilities in nine states and four countries, and market plastics resins, petrochemicals, lube and fuel additives, and plastic pipe in 80 countries. In 1998 CCC's earnings were $151 million on sales of $3.2-billion.)

Darry Callahan, president of Chevron Chemical, announced the staff cuts and headquarters relocation as part of a strategic realignment in response to an increasingly competitive petrochemical industry.

"These are hard decisions to make, but must be done if we are to remain competitive during this severe petrochemicals downturn and extended period of low energy prices," Callahan said.

Staff reductions will mostly affect employees in San Ramon and Houston, and will have minimal impact at manufacturing and non-U.S. locations, he indicated. "These steps are essential for our continued success, so that we can remain positioned for future growth, while returning ongoing value to Chevron's shareholders."

Chevron Chemical's actions are in line with a Chevron-wide effort to reduce expenses in order to continue strategic investment in international growth projects despite the current low price of oil.

Surplus employees will be notified over the next few months that their jobs will be eliminated. Each of the involuntarily terminated employees will receive, subject to eligibility requirements, an enhanced retirement plan benefit. They will also be eligible for redeployment consideration elsewhere within Chevron, outplacement counseling and other benefits designed to assist in their transition.

"We are committed to completing the staff reductions, outplacement and relocation of employees in a fair and compassionate manner," said Callahan.

"This will be difficult for everyone and their families. We want to do the best we can to make this transition as smooth as possible for all of those who will be affected."

Updated: March 1999