Business News

BASF prepares for short-time working at Ludwigshafen site

Thursday 16. April 2009 - Continued weak order situation requires the introduction of short-time working in production units as of June

As a result of the continuing weak economic situation, BASF is assessing in which production plants short-time working will be necessary as of June 1. This assessment is being made on the basis of a provisional agreement agreed as a precaution between the company’s management and employee representatives in January 2009. The situation will be analyzed unit-by-unit in the coming weeks and discussions will then be held with the responsible employee representatives to determine in which production units short-time working will be introduced.

Capacity utilization rates at many plants have remained very low since the beginning of the year, and there are no signs of a sustained improvement in orders from key customer industries in the foreseeable future,” said Dr. Harald Schwager, member of the Board of Executive Directors of BASF SE responsible for Human Resources and head of the company’s Ludwigshafen site. Since first reducing production rates in November 2008, BASF has used the advantages offered by its Ludwigshafen Verbund site and has so far been able to avoid short-time working by transferring employees to other units. “At the moment, around 600 employees in Ludwigshafen are working temporarily in other plants. Unfortunately, we are now reaching the limits of what is possible,” explained Schwager.

In addition, the company is also examining further possible measures in the event that the situation does not improve in the second half of the year. This includes, for example, the extension of short-time working beyond production units.

Short-time working would have been introduced months ago for many employees in Ludwigshafen had colleagues not been able and willing to be highly flexible,” said Robert Oswald, Chairman of BASF’s Works Council. “Once again, BASF’s Verbund has proven its worth and has benefited all concerned. Despite being realistic about the overall current economic situation, we still have reasons to be confident. In the past years, we have made the Ludwigshafen site more efficient and are thus better prepared to weather the economic crisis. As usual, we will look after the interests of employees and will critically review and constructively help to define any further necessary steps.”

BASF expects to announce how many units and employees will be affected by short-time working by the middle of May. According to initial estimates, short-time working is likely to be introduced for between 2,000 and 3,000 of the approximately 32,800 employees of BASF SE at the Ludwigshafen site. Employees will receive a net wage of approximately 90 percent as a result of short-time work compensation provided by the German government as well as a payment from the company under the terms of the collective wage agreement for the chemical industry. Rapid re-introduction of normal working hours is possible at any time, should demand for BASF products pick up.