The Urethane Blog

Covestro Profile

Covestro aiming to branch out, build its brand

In June 2015, a few months before German drug giant Bayer spun out its plastics and chemicals division as an independent subsidiary, it announced that the company formerly known as Bayer Material Science would be called Covestro.

When the news reached its North American headquarters in Robinson, initial reaction to the name was — to say the least — underwhelming.

“It wasn’t as catchy as we thought” it might be, said Jerry MacCleary, president of Covestro’s North American region, which employs about 3,000 people, including 750 at its campus along the Parkway West.

“Then we had to figure out how to pronounce it,” he said adding that some longtime employees worried about an issue that frequently causes confusion about the Bayer name: It’s pronounced differently in the English and German languages.

Getting the name right was just one of the details Mr. MacCleary and his senior staff faced in transitioning their organization from Bayer MaterialScience to Covestro after it was spun out through a public offering on the Frankfurt Stock Exchange last Sept. 1.

Bayer decided to separate Covestro — which makes coatings and raw materials such as plastic polycarbonates used in electronics, insulation, car parts, and other industrial and consumer products — in order to focus more on its high profit-generating drugs and pharmaceuticals as well as its agricultural chemicals business, which recently has been trying to buy rival Monsanto.

Although Covestro comprises mainly people who worked for Bayer, and Bayer still holds a 64 percent ownership stake, Mr. MacCleary said there was a pressing need to carve out a new identity in communities in which the company operates, and to calm anxieties among employees about how their day-to-day work lives might change.

A year after the public offering, Mr. MacCleary believes the launch has been a success.

“It’s been one of those years that you look back and say it was a lot of work, but it was worth it,” he said in his light-filled office that sits just above the hillside along the Parkway West where workers were pushing to complete installation of a new Covestro sign in time for Thursday’s one-year anniversary celebration.

It has helped that Covestro has reported strong financial results.

Global sales for 2015 — including the first eight months when it was fully owned by Bayer — totaled 12.1 billion euros ($13.2 billion) including 3.4 billion euros in revenues generated in North America.

Analysts expect 2016 earnings before interest, taxes, depreciation and amortization will rise by by 3 percent.

His toughest challenge, Mr. MacCleary said, was to hire about 60 mid-level managers to handle corporate functions formerly administered by Bayer such as human resources, finance, taxes, legal services and information technology.

While Covestro filled most of those positions with people in the Pittsburgh region, it has been harder to find people for jobs that require science and engineering skills.

And because about one-third of its local workforce will reach retirement age in the next five to seven years, Covestro has been trying to build a base of younger workers. “We are fighting for the same people as our competitors in our industry, and we’ve got to explain who is Covestro and why they should come work for Covestro,” he noted.

One thing that might help is the sense of culture and camaraderie Mr. MacCleary and other leaders have tried to foster at Covestro sites throughout North America.

At town hall meetings conducted at offices, research labs and manufacturing plants, Mr. MacCleary encourages employees to ask hard-hitting questions. He wants them to feel they can challenge the status quo.

“Just because something didn’t work 10 years ago doesn’t mean it doesn’t work now.”

Leaders also have scheduled more casual social events where senior managers mingle with employees. At the Robinson campus, for instance, there has been a series of gatherings held in the afternoons during which the company serves hors d’oeuvres at stand-up tables in the cafeteria.

Inside some offices in Robinson, walls have been transformed with bright shades of purple, green and orange paint that match colors in the new corporate logo.

Plans are underway to replace artwork that has been in the same spots for decades.

New photos on the walls designed to showcase Covestro products feature employees’ children including one shot of a little girl with blond braids who is jumping on a mattress containing Covestro’s polyurethane foam.

“People needed to visualize the change to Covestro,” Mr. MacCleary said. “Now there’s a personal, emotional connection for employees.”

Outside its headquarters, the company has promoted its name through new, playful advertisements featuring children at the Pittsburgh International Airport; and a series of sponsorships at the Carnegie Science Center, the Energy Innovation Center, and the Covestro Employee Engagement Institute, which provides consulting for nonprofits.

It is also sponsoring a project to light the Rachel Carson Bridge between Downtown and the North Shore with energy efficient lights and wind turbines for Pittsburgh’s Light Up Night and the holiday season.

Now when Mr. MacCleary attends meetings of civic organizations such as the Allegheny Conference on Community Development or the United Way of Southwestern Pennsylvania, he said people aren’t puzzled by the company’s name.

“We had a small window of opportunity to drive the Covestro brand,” he said. “People are now talking about Covestro and they are pronouncing it right.”

Joyce Gannon: or 412-263-1580.