BASF Safeguards Jobs at 36,000-Employee HQ as Workforce Ages

  • Chemical-maker to invest $6.8 billion in Ludwigshafen by 2020
  • Number of retirees will increase `sharply' from 2018

BASF

Photographer: Hannelore Foerster/Bloomberg

BASF SE pledged not to impose any redundancies at its 36,000-employee manufacturing base in Ludwigshafen, Germany for the next five years as it expects the number of retirements to increase.

Europe’s largest chemical company will meanwhile invest 6 billion euros ($6.8 billion) on upgrading and maintaining its series of interconnected factories within the complex, BASF said on Wednesday. From 2018, more than 1,000 employees in Ludwigshafen will retire each year, and by 2020 more than half of the workforce there will be 50 or older.

The agreement with labor representatives comes less than a month after BASF, which competes with Dow Chemical Co. and DuPont Co., said it would deepen a savings push by more than 1 billion euros over the next three years after becoming more pessimistic on global economic growth and chemical production. Germany’s strict labor laws mean employee representatives have seats on the supervisory board, while BASF’s so-called “Verbund” sites such as Ludwigshafen make it hard to untangle operations.

In the Verbund system, chemical facilities are bound together by a web of pipes that both deliver feedstock and whisk byproducts off to adjoining plants that need them, so as little as possible is wasted.

“Economic and social changes are occurring ever faster and are becoming less and less predictable,” said Margret Suckale, BASF’s board member for human resources and site management. “We will continue to substantially invest in the largest, integrated Verbund site.”

While offering job guarantees, BASF said workers will have to be flexible to adjust to changes in demand.

Both Dupont and Dow have cut jobs in the past 18 months after pressure from activist investors to reduce costs and streamline. Crop chemicals specialist Syngenta AG also announced 1,800 redundancies in November as it sought to reduce its exposure to the currency swings of the pound and Swiss franc.

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