BASF cautions of potential cuts in production and jobs

20-Jan-09

The world's largest chemical maker BASF has cautioned that the company is being compelled to extend production cuts because of worse-than-expected industry conditions. The German chemical maker is also mulling more layoffs as part of a sweeping cost-cutting effort that could extend to Texas. Demand outlook on deficient business in December and January continues to be grim, with no signs of a turnaround. In November, BASF temporarily halted production at 80 plants worldwide and trimmed output at 100 more, including sites in Texas, amid a widening global recession that has stunted demand for chemical products. In Texas, BASF employs about 1,500 people at sites in Freeport, Pasadena, Clear Lake, Beamont, Port Arthur, Lancaster, Bishop and Houston. All of those sites were affected by the cutbacks, although no layoffs resulted. As per the company, more than 1,800 workers in Europe may work shorter days or be furloughed as factories run at less than 75% capacity on average across the company. Last month, BASF also said it will cut 200 U.S. jobs by closing a manufacturing site in Wilmington, N.C., later this year and a site in Belvedere, N.J., by 2010.