The action by the activist investor group Trian to remove Michael McGarry, the CEO of PPG, and split the company into two is highly disturbing (Oct. 25, “Activist Investor Calls for Ouster of Pittsburgh Coatings Giant PPG’s Chairman”).

This follows a pattern of aggressive moves by activist investors against U.S. companies, as was the case with Dupont, a premier U.S. chemical manufacturer. Trian claimed that Dupont was not delivering enough share-holder value.

The action by Trian prompted not only the merger of Dow with Dupont, but it led to 1,700 layoffs and the closing of Dupont’s Central Resesarch Lab, a 150-year-old jewel of the U.S. chemical industry that led to the development of new products like Nylon and Kevlar and a Nobel Prize in Chemistry.

Why does the U.S. government allow activist investors to undermine the long-term viability of the U.S. industry for the sake of short-term profits? In the past, international competition was perceived as the biggest threat to the U.S. industry. Now that threat is coming from within the United States by these financial companies.

Ignacio Grossmann
Squirrel Hill
The writer is a professor of chemical engineering at Carnegie Mellon University.

First Published: November 16, 2018, 5:00 a.m.