Unions says new BASF cost-cutting measures 'not future-proof'

Frankfurt – German chemical workers' union IGBCE and the BASF works council have criticised the group’s recently announced strategy to reduce costs, saying it does not support future growth. 

The German chemicals major detailed its plans to cut costs on 26 Sept, involving a portfolio restructuring and the IPO of its agricultural solutions business.

Among other measures, group said it intended to divest decorative coatings activities in Brazil, “de-risk” battery materials business and close plants at its Ludwigshafen operations in Germany.

In response to the announcement, IGBCE and worker representatives said the group's main focus was 'only on saving costs.'

“That is not enough as a concept for a successful future and for securing the locations,” said a union statement 26 Sept.

Instead, the unions called for a focus on “thinking ahead innovatively and investing aggressively” in order to advance the modernisation of the European locations.

In the context of job cuts, the works council said it will, for now, focus on negotiations to extend an existing agreement which prohibits redundancies at the main plant in Ludwigshafen until end of 2025. 

The redundancies agreement, said Sinischa Horvat, BASF works council chairman, should be extended to 2030 to “protect employees” and offer them the best possible conditions for the upcoming change processes.

The new BASF strategy comes at a time when the German chemical industry is under pressure from low demand and higher energy and raw materials costs.

"But despite the challenges… the chemicals industry remains competitive and innovative with great future potential,” said Michael Vassiliadis, chairman of the IGBCE.

“Reducing plants, cutting jobs and taking baby steps towards transformation is not a good enough concept for the largest chemical company in the world," he added.

The new austerity measures come a year after BASF shut down 10 plants in Germany.

Such moves, said the IGBCE statement, will impact the future of BASF as major chemicals manufacturer and the Rhineland-Palatinate/Saarland region.

"Instead of constant spin-offs, cost-cutting programmes and new strategic directions, BASF needs a bold, determined plan for the sustainable chemical production of tomorrow," the statement added.