When the $5.6 billion deal was announced Thursday, Smith told Arco Chemical executives that he expected to consolidate the combined companies' headquarters in Houston, leaving the research and development operation in Newtown Square.
About 350 Arco Chemical employees work in research.
While the exact number of employees to be laid off has not been determined, Lyondell said it expected the deal to produce $100 million in annual cost savings. That is in addition to a $150 million cost-cutting program in place at Arco Chemical, which has sliced 900 people from the payroll worldwide over the past year, an Arco Chemical spokeswoman said.
Meeting yesterday with employees for about 90 minutes, Smith said the bulk of the new cost savings would be achieved through efficiency measures other than layoffs, Arco Chemical spokeswoman Sallie Anderson said.
Lyondell said it expected to achieve significant cost reductions by integrating Arco Chemical's operations with those of Equistar Chemicals LP, Lyondell's Houston chemical unit.
Smith also said he had not abandoned the idea of keeping a headquarters here, but indicated that it made more sense to move it to Houston, Anderson said. She said some employees would be offered jobs in Texas.
``They are putting together a transition team now,'' she said.
Employees who are laid off will receive severance packages and job-placement services, she said.
Anderson described the meeting as ``pretty upbeat'' under the circumstances, and said Smith had made a favorable impression on employees. Others who attended the meeting agreed.
``He seemed like a regular guy - professional but with a caring side to him,'' said one administrative staff member who asked not to be identified. ``That's all people have to hold onto right now.''
Others said they did not hold out much hope of a headquarters staying here.
Lyondell spokeswoman Jackie Wilson acknowledged that the subject of the headquarters was a key issue, one that they hoped to resolve quickly.
``We do have a feeling that it makes sense to have the headquar
ters near where the major U.S. manufacturing facilities are, and also to have some shared services with Equistar,'' she said.
Wilson said she had heard that Gov. Ridge's staff wanted to meet with Lyondell executives and ``of course, we'd be glad to talk to him anytime.''
Sam McCullough, the state's secretary of community and economic development, spoke Thursday with Arco Chemical chief executive Marvin O. Schlanger and asked to meet with Lyondell officials.
Lauren Cotter, a spokeswoman for McCullough, said a meeting would be scheduled for next week.
``The administration intends to keep as many of those jobs as possible in Pennsylvania,'' she said. ``Obviously we do recognize there will be some consolidation. But we want to see what we can do to state Pennsylvania's case.''