Ludwigshafen, Germany - BASF SE management and employee representatives signed a new agreement to ensure the future of its Ludwigshafen site, according to a 24 Nov announcement.
While offering specific commitments such as no compulsory redundancies and continuation of investment at the site, the agreement also incorporates "flexible personnel deployment" as a key element, allowing more flexibility in the assignment of personnel to specific plants, as well as measures to help employees "stay healthy and increase their fitness for work throughout the later stages of their working lives."
The agreement, titled 'Safeguarding the future through flexibility and operational partnership,' applies to the about 33 000 BASF SE employees at the site for the period from the beginning of 2011 to the end of 2015. It replaces the current site agreement which started at the end of 2004 and expires at the end of this year.
A no-redundancy pledge is a key element of the agreement, BASF emphasised in its announcement. The company also promises to spend €9-10 billion (about $12-13 billion) on measures to safeguard the site's future through to the end of 2015.
About two-thirds of the amount will be used on investment, modernisation and maintenance to keep the Ludwigshafen site performing at its best in terms of technology and organization and thus strengthening core operations. The investment thus remains at the high level of the past years.
Research and development expenditure will also be at the level of previous years and will account for more than one-third of the total 24 Nov amount. Ludwigshafen will remain the central platform for global research and development at BASF, the statement emphasised.
In addition to these reassurances, BASF says that, "in a bid to meet the challenges posed by increasingly unpredictable fluctuations in market demand," management and employee representatives have agreed on a package of measures to enhance the flexibility of HR (human resources) systems in the site agreement.
"The recent economic crisis highlighted the importance of close and trusting cooperation between the works council and management, which enabled us to avoid short-time work at the Ludwigshafen site for a long time and minimise its impact at a later stage," BASF explained, adding that "this was possible because both sides were willing to show flexibility on human resources issues.
"The new site agreement captures this spirit and ensures that the site is equipped to weather future storms," said Dr Harald Schwager, member of the Board of Executive Directors and industrial relations director of BASF SE.
"We consciously invested a lot of time in these talks and engaged intensely with management in order to achieve workable models," said Robert Oswald, chairman of the Works Council. "The negotiations were very tough but the shared background of experience in coping with the crisis had a positive impact on the atmosphere of the negotiations," he added, in the BASF statement.
"The new site agreement sends out important signals with regards to employment, while at the same time mapping out an effective plan to keep the Ludwigshafen site competitive on an international scale now and in the future," Oswald concluded.
The agreement highlights continuation of "flexible personnel deployment" as a key element. During the economic crisis up to 600 employees from plants with low capacity utilisation were deployed for a temporary period in other plants, where there was more work to be done. Fluctuations in production capacity utilisation could thus be better offset, BASF explained. Both sides have also agreed to a possible increase in the proportion of temporary staff to enhance flexibility even further, the company added.
Another key element of the site agreement is a joint commitment toward safeguarding employment through training, personnel development and qualification, and the Generations@Work programme which aims to address demographic change.
"We wholeheartedly are committed to vocational training and intend to maintain the existing high level of vocational training at BASF SE and in the BASF Training Verbund with partner companies. Through this commitment we avoid any risk of a shortage of skilled labour and, at the same time, meet our responsibilities toward the young people in our region," said Hans-Carsten Hansen, president Human Resources at BASF SE.
"Longer working lives are posing new challenges in terms of the working capacity of our employees. The agreed expansion of company health management will offer employees more opportunities to stay healthy and increase their fitness for work throughout the later stages of their working lives," said Rainer Nachtrab, chair of the executive representative committee of BASF SE.