BASF is one of the largest chemicals companies in the world, not to say the largest. It employs almost 100,000 people.
But this week they came out with some very negative news. The company revealed that it would reduce its working hours by 20%, which means that 20,000 people will have “flexible use of working time arrangements such as overtime and vacation”.
But that was not all, they will also reduce a part of the production in about 100 factories and close down 80 others.
BASF causes the measures to a strong decrease in orders, especially from car manufacturers.
This is a serious difference with the past few weeks, when the firm announced that the sales in 2008 would be similar to those in 2007, also the operating profits would be comparable.
This situation shows us that the financial crisis still has its effect on several companies. As a result of the news, the shares of BASF suffered a setback of 17 per cent to €21.19. Jürgen Hambrecht, the chief executive, said that the next months will be a very difficult time for the company.
There is also positive news. The chemicals giant promised that the takeover of Ciba, a Swiss company, would not be put aside.
As I said in earlier blogs, we see that the crisis is definitely not over yet, it will drag on for a long time. I think that more companies will follow and also get into trouble, especially when the markets indices keep drifting down.
I think it is too bad that BASF has to completely shut down 80 factories, but I think that it is a good idea of the company to regulate flexible arrangements for the employees. It is better than losing their jobs entirely.
I really hope that BASF can fix their problems soon and that they become a healthy company again.
However, Europe is in a recession and we will have to wait for the moment when the economy recovers. The sooner the governments find good solutions, the sooner the global economy can restore and grow again.
Source: The Financial Times – BASF cutbacks will affect 20,000 staff - http://www.ft.com/cms/s/0/e1a19a1a-b637-11dd-89dd-0000779fd18c.html
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It's indeed a good way of BASF how concerned they are for their employers, they really help them. That's very good. We have had a crisis and now we will see the impact on the economy. These are very interesting times because we can learn about this crisis. For example how to prevent them.
BASF had to do this and when their problems are gone they can work on their goals again.
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