Persistent weak demand prompts BASF to introduce short-time working at Ludwigshafen site

16-Apr-09

Facing persistently weak demand due to tough economic conditions, BASF is considering introducing short-time working hours for approximately 2000 to 3000 employees of total 32,800 employees at its Ludwigshafen site (Germany) by mid-May. "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. 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. The company indicated that it leveraged the advantages of its Ludwigshafen Verbund site thereby averting the short-time working by transferring employees to other units since the production cuts announced in November 2008. Once the short-time working is introduced, the employees will receive a net wage of approximately 90% 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.