The Urethane Blog

MacCleary Interview

Covestro leader MacCleary finds stability amid change














Jerry MacCleary has commuted to the same office complex in Robinson during his 37-year career in the plastics industry even though he has worked for four different companies.

He managed to remain in the same location because the companies he worked for — Mobay Chemicals, Miles Laboratories and Bayer Corp. — changed their names.The latest name is Covestro, which was formed when Germany-based Bayer AG spun off its plastics unit into a standalone company.

As president of Covestro in North America, MacCleary is in charge of a region where the German company generates more than $3 billion in annual sales and employs 3,000 people at 13 manufacturing and office sites.

In an interview with the Tribune-Review, MacCleary discussed the split from Bayer and the outlook for Covestro. Below are edited excerpts.

Trib: What is driving growth at Covestro?

MacCleary: We're seeing new builds in residential (housing). Right now we're seeing new starts at a little over 1 million. And I still think you see a lot of upside getting back into 1.5 million, 1.6 million house starts. Anytime you see an increase in residential, we're making big gains selling spray foams into residential. Also, on the commercial side, we're seeing big gains in our products being used in commercial roofing. And the automotive sector has had the fastest return from the 2008-09 financial crisis. They're back producing what they were in number of light vehicles, and we've benefited from getting more plastics into vehicles to make them lighter.

Trib: Now that you're split off from Bayer, what does that mean for Covestro?

MacCleary: Being part of Bayer has positioned us for growth. Bayer really wanted to be focused on health care. They thought we would be better off on our own. We can really focus on our industry, focus on what our customers' needs are. A lot of the time, when you're in a big conglomerate like that, you have different priorities. We also believe we'll be faster moving, more flexible and more efficient since we're smaller.

Trib: And it's also given Covestro more opportunity to invest for growth, correct?

MacCleary: When you're going into the board (of Bayer) and looking for some large investments, we need some very large investments for world-scale plants. So when you're going into your pipeline of what you want to invest in for the biggest and largest returns, it was becoming a challenge to support all three of the business groups at Bayer with the capital expenditures to all expand. It gives us a great opportunity to reinvest back into our growth.

Trib: What has the carve out of Covestro meant for the operation in Robinson?

MacCleary: It was important for our employees, the community to know that Pittsburgh is our North American headquarters. We have all our service unit groups here. We have human resources, tax filing accounting, legal, supply chain here and this is the headquarters for our three business units, polyurethanes, coatings and adhesives, and polycarbonates. And this is one of the three global hubs for our research and development. We do a lot of our product development, that's all done here in Pittsburgh for our North American region.

Trib: What's your view on the national economy?

MacCleary: It's not as strong as we would like it. We've seen some good growth since 2009. We expected a little faster growth in the construction area. We haven't seen it and it's lagging some of the industry forecasting in home starts and commercial construction spend. It's still growth, around 3.5 percent, but it's not into the 6-7 percent we were expecting. It's been steady but not as large as we would have expected.

Trib: If Shell builds a cracker plant here, would they become a competitor of Covestro?

MacCleary: Not at all. It would be great for Pittsburgh, great for the community. We've worked on that to make sure they have the skilled labor they need, through the Allegheny Conference. I think everything is in place to support them. When they start putting in the cracker, it will attract a lot of other types of investments, like polyethylene manufacturers. It'll be great for the plastics industry. For us, it's not a direct competitor. It's good for the community, but it won't have an impact on us.