This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

DuPont Co.is cutting research and development spending as Chief Executive Officer Ed Breenseeks $1 billion of cost savings before the completion of its historic merger with Dow Chemical Co.

The R&D cuts follow the thousands of job losses announced in December. R&D expenditure will fall to $1.6 billion to $1.7 billion, Breen said Tuesday on the Wilmington, Delaware-based company's fourth-quarter earnings conference call. That's less than the $1.9 billion or more spent in each of the prior two years.

DuPont's storied research and development program has given the world nylon stockings, Kevlar bulletproof vests and Nomex fire-resistant overalls. Breen said he's not concerned that the latest cutbacks will hurt product development because they focus on the company's riskiest projects and spending will still be in line with the 15-year average.

"If we went much deeper than that, I wouldn't have done it," he said in a telephone interview.

Breen has been conspicuously busy since his appointment as CEO in November, which followed more than two years of pressure on DuPont from an activist investor. In his first weeks on the job, he reached an agreement with Dow on what's set to be the chemical industry's largest-ever deal. Breen, who broke up Tyco International Plc when he ran that company, is reshaping DuPont at "light speed," said Matt Arnold, an analyst at Edward Jones & Co. in St. Louis, who questioned the impact of the latest cost cuts on product development.

"Does this harm the pipeline a few years out? It threatens to," Arnold said by phone Tuesday. "I'd have deeper-rooted concerns if the whole thing wasn't getting rewired in co2ming months."

DuPont is feeling the effects on its earnings of the stronger dollar and weaker demand from farmers for its agricultural products. Its forecasts on Tuesday for full-year profit and sales fell short of analysts' estimates. DuPont also reported a net loss in the final three months of 2015, the first quarterly loss since 2008.

DuPont said Tuesday that its overall cost-cutting target before the merger, which is expected to be complete by the year- end, is now $1 billion, up from from $900 million previously. Among other measures already announced is the the elimination of 10 percent of the workforce. DuPont said Dec. 30 that 1,700 of those job losses would come from Delaware.

The creation of DowDuPont will be followed by a split into three separately traded companies with their own focus: agriculture, specialty materials, and basic chemicals and plastics. While Breen will be CEO of DowDuPont, the eventual leaders of the post-split companies haven't been determined, he said.

DuPont's R&D spending is relatively high compared with its peers, according to data compiled by Bloomberg, equal to about 6 percent of sales in 2014. That's the third-highest percentage among U.S. chemical companies with a market capitalization of $500 million or more, the data show.

DuPont devotes about half its R&D budget to agriculture, substantially less than the $1.58 billion that Monsanto Co. spent primarily on seed research last year. Dow "has a very heavy spend" in agriculture relative to the size of its Dow AgroSciences business, so the merger will create a strong competitor to Monsanto, Breen said.

"It's one of the strategic reasons for the merger," he said.