Ludwigshafen, Germany - German chemicals giant BASF SE said 15 April that it is currently assessing introducing short-time working on 1 June at some sites in Germany, because of continuing weak orders in the current economic climate.
BASF said this assessment is based on a provisional agreement between management and employee representatives in January 2009. Once each unit has been analysed, discussions with employee representatives will determine at what plants short-time working will be introduced, the company said.
"Capacity utilisation 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, board member responsible for human resources and head of the company's Ludwigshafen site.
Since first reducing production rates in November 2008, BASF said, it has so far been able to avoid short-time working by transferring employees to other units. "At the moment, around 600 employees in Ludwigshafen are working temporarily in other plants. Unfortunately, we are now reaching the limits of what is possible," explained Schwager, in BASF's announcement.
The company said it may take other measures if the second half of the year shows no improvement, such as extending short-time working beyond production units.
"Short-time working would have been introduced months ago for many employees in Ludwigshafen had colleagues not been able and willing to be highly flexible," said Robert Oswald, chairman of BASF's Works Council.
BASF expects to announce how many units and employees will be affected by short-time working by the middle of May, but initial estimates are that short-time working is likely to be introduced for between 2000 and 3000 of the 32 800 employees at Ludwigshafen.
These employees will receive a net wage of about 90 percent 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.
BASF added that rapid re-introduction of normal working hours is possible at any time, should demand for its products pick up.