BASF Sees More Woes

BASF Chairman Jürgen Hambrecht says his company's global business declined significantly in December 2008 and that demand for chemical products did not pick up in the first half of January as customers continued to run down inventories. The firm's average plant capacity utilization is now less than 75%. "The situation remains tough and difficult to predict," Hambrecht says. "We do not expect the economic environment to improve in the coming months." In response, the world's largest chemical company is going beyond its original plan of flexible-working-time arrangements and introducing "short-time working" for some 1,700 workers at two German plants. Under the arrangement, loss of earnings is partially compensated by government benefits. Hambrecht says he won't rule out similar moves at the firm's big sites in Ludwigshafen, Germany, and Antwerp, Belgium. In addition, BASF has closed facilities for 1,4-butanediol and tetrahydrofuran in Ulsan, South Korea, and has shut down an automobile coatings plant in Belvidere, N.J., eliminating a total of 200 jobs. "Further job reductions may be necessary, depending on how economic conditions develop," the company says.