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Main plant of the chemical group BASF in Ludwigshafen am Rhein: 700 jobs are to be cut here in production alone
Photo:
IMAGO/ARNULF HETTRICH / IMAGO/Arnulf Hettrich
It is a huge turning point for the large industrial location Ludwigshafen: The chemical company BASF wants to shut down about ten percent of its plants at its headquarters in Rhineland-Palatinate, as it announced on Friday.
Around 2,500 jobs are to be lost in Ludwigshafen alone.
This is BASF's reaction to the energy price crisis in Europe and its consequences.
Employee representatives now criticize the planned austerity program as excessive.
Above all, they miss concrete plans for the conversion of chemical plants to make them more climate-friendly.
"Dismantling plants and cutting jobs is not yet a concept for a successful future for the world's largest chemical complex," says Michael Vassiliadis, Chairman of the Mining, Chemical and Energy Industrial Union (IG BCE) and a member of the BASF Supervisory Board.
"Underutilized" production complex
According to Vassiliadis, the turning point in the industry can only succeed with innovations and investments, "not with the cost hammer." Ludwigshafen needs a concrete plan for the sustainable chemical production of tomorrow.
»The Management Board has not yet provided this investment roadmap.«
Instead, BASF has announced that it will, among other things, close an energy-intensive ammonia plant and associated fertilizer plants in Ludwigshafen;
From now on, the group also wants to serve the demand from Antwerp, Belgium.
BASF also wants to close a relatively new production complex for the plastic TDI in Ludwigshafen because it was "underutilized".
The company intends to cover this demand from the USA and Asia in the future.
As a result of the closures, around 700 jobs in production in Ludwigshafen will be lost.
BASF hopes that most of those affected can be offered work in other companies.
A further 3,500 jobs are to be eliminated outside of production, for example in administration, a good half of them also at the Ludwigshafen headquarters.
This is offset by 900 additional jobs planned in so-called hubs – the bottom line is a reduction of 2,600 jobs.
Germany business recently in deficit
The works council is now demanding that BASF invest more money in renewable energy, "green" hydrogen and the circular economy.
BASF must play a pioneering role in the development of sustainable products, says Sinischa Horvat, head of the works council.
"Not in China, the USA or anywhere in the world, but setting a good example here at our main location in Ludwigshafen!" According to Horvat, securing the location must come before maximizing profits.
BASF CEO Martin Brudermüller, meanwhile, pointed out during his company's balance sheet press conference on Friday that overall chemical production in Europe had declined in the past year.
As a result of the war in Ukraine, BASF sold significantly lower volumes, while at the same time the costs for energy and most raw materials rose significantly.
While business in Germany accounted for around a third of BASF's profits in 2015, it was in deficit in the second half of 2022 due to high energy costs.
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BASF CEO Martin Brudermüller: "We're staying true to the location"
Photo: Uwe Anspach / dpa
Brudermüller nevertheless committed himself to the Ludwigshafen headquarters: "We remain loyal to the location, despite all the talk of migration and also with the courage to develop further." BASF is on the right path towards more climate-friendly production, for example using more and more renewable energies.
"But we are highly dependent on external factors for this," said the CEO, referring to the expansion of renewable energies and the hydrogen infrastructure.
On average, BASF invests more than two billion euros in Ludwigshafen every year.
On the other hand, the group is pursuing growth plans primarily in Asia, where it sees increasing demand.
Last summer, for example, BASF decided to invest ten billion euros in a new Verbund site in southern China - in a large factory based on the Ludwigshafen plant.
Brudermüller defends China plans
However, this course is not without controversy.
The manager Saori Dubourg, who was previously responsible for the Europe region on the BASF board, is said to have opposed the expansion in China;
this meant that Dubourg was largely isolated on the board.
On Wednesday, BASF announced that the top manager would leave the company at the end of February - after a good 26 years at BASF.
Union boss Vassiliadis had also warned that BASF should not underestimate the geopolitical risks in the China business.
CEO Brudermüller replied during the press conference that such a large production site either had to be built 100 percent or not at all.
BASF has hired many engineers and has already started work.
"You can't get half pregnant now," said Brudermüller.
more on the subject
Savings program in the energy price crisis: BASF wants to cut 2,600 jobs worldwide - many of them in Germany
How the crisis is dividing Germany's corporate world: The big ones collect - and many small ones sufferBy Martin Hesse, Benedikt Müller-Arnold and Timo Schober
Saori Dubourg:BASF loses its most prominent manager
The top management discussed the expansion in China for a long time and invited many experts.
»Are there any risks?
Of course,” said Brudermüller.
There is also the disaster scenario of a Chinese attack on Taiwan.
But, according to Brudermüller: "If that happens, then I don't think that's our only problem." Then the world economy would have difficulties in many places.
Overall, the profitable deals outside of Europe would help BASF finance change in Europe.
In Ludwigshafen, meanwhile, there are worries about the future, as Gunther Kollmuß, district manager of IG BCE, puts it.
BASF urgently needs to invest in education and training over the next few years to make employees fit for new tasks.
According to Kollmus, the crisis offers the opportunity to invest in sustainable products and processes.
"And that requires qualified personnel."
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