In an effort to avoid capacity glut amid the drastic decline in demand, BASF has curtailed production at 100 plants and provisionally shut down 80 plants worldwide following a similar announcement for polystyrene and caprolactum facilities. The decision is set to affect 20,000 employees for which flexible working time arrangements will be used. The units which supply to automotive, construction and textile industries are facing adjustments. Value chains affected include ammonia, styrene and polyamide, which manufacture precursors for engineering plastics, coatings and fibers. The shutdowns will be coordinated throughout BASF's global production Verbund and will involve all six Verbund sites in Europe, Asia and North America, as well as other sites. Implementation of most of the measures has already started; reduced capacities are expected to last until January 2009 for individual plants.
At the company's main site in Ludwigshafen, Germany, BASF SE has signed an agreement with the works council under which the measures will be implemented through the flexible use of working time arrangements such as overtime and vacation. According to current plans, the measures are expected to affect approximately 5,000 employees in Ludwigshafen. The company has witnessed drop in sales volumes and short notice order cancellations mainly due to increased reduction of inventory by customers and a tight credit in customer industries. As per a senior authority with the company, the company is not expected to touch the EBIT before special items as the previous year.