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  • BASF – The Chemical Company Shaping the future in the crisis

    11th Plenary Meeting of the Sector Social Dialogue Committee of the European Chemical Industry

    4th May 2010

    Mathias Schöttke

    HR Governance BASF SE, Ludwigshafen

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 2

    Agenda

    1. BASF at a glance

    2. Impacts of the crisis

    3. Measures in tough times

    4. Conclusion

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 3

    Agenda

    1. BASF at a glance

    2. Impacts of the crisis

    3. Measures in tough times

    4. Conclusion

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 4

    BASF – The Chemical Company The world´s leading chemical company

    � Chemistry is about every aspect of life.

    � We are connected to deliver intelligent and sustainable solutions.

    � Sales 2009: €50,693 mill.

    � EBIT 2009: €3,677 mill.

    � Employees (December 31, 2009): 104,779

    � About 1,300 new patents filed

    � 6 Verbund sites and about 380 production sites

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 5

    BASF Segments focusing on six different areas

    C h

    em ic

    al s

    P la

    st ic

    s

    Performance Polymers

    Polyurethanes

    Crop Protection Oil & Gas

    P er

    fo rm

    an ce

    P ro

    d u

    ct s

    Paper Chemicals

    Dispersions & Pigments

    Care Chemicals

    Performance Chemicals

    Inorganics

    Petrochemicals

    Intermediates F

    u n

    ct io

    n al

    S o

    lu ti

    o n

    s

    Construction Chemicals

    Coatings

    Catalysts

    A g

    ri cu

    lt u

    ra l

    S o

    lu ti

    o n

    s

    O il

    & G

    as

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 6

    Europe – BASF’s home market with two Verbund sites

    � Sales 2009: €28.5 billion by location of customer

    � Employees: 67,621 as of December 31, 2009

    � Regional facts: � BASF’s home market � Ludwigshafen –

    site of the company’s global headquarters

    � Verbund sites in Ludwigshafen, Germany and Antwerp, Belgium

    Verbund site

    ANTWERP LUDWIGSHAFEN

    Selected production site

    Regional Headquarter

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 7

    Agenda

    1. BASF at a glance

    2. Impacts of the crisis

    3. Measures in tough times

    4. Conclusion

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 8

    The crash of the industrial production

    80

    90

    100

    110

    120

    130

    2007 2008 2009 2010 2011 2012 2013 2014 2015

    Industry production 2007 = 100 Source: internal

    Western Europe

    North America

    World Emerging Countries in Asia

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 9

    Some figures illustrating the situation in 2009

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 10

    Agenda

    1. BASF at a glance

    2. Impacts of the crisis

    3. Measures in tough times

    4. Conclusion

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 11

    Crisis management and long term issues rely on strong labor relations

    � Balancing crisis management and long term issues

    � Enhancing strong labor relations

    Long term issues

    Crisis ManagementLabor relations

    Sustainability Trust

    Reliability Motivation

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 12

    Gradual crisis management as part of our approach

    Our approach: Gradual crisis management

    Short-time work / Site Closures

    Temporary personnel transfers Temporary transfer of employees in Antwerp and Ludwigshafen Qualification of employees

    Flexible use of HR-instruments Reduction of time accounts and annual leave Reduction of leased workers, contractors and employees with limited contract

    Strict cost discipline Reduction in costs for catering, travelling, events etc. Reduction in provisions for residual leave and time accounts etc.

    Adjust capacities Plant cutback and shutdowns Reduction of stock levels

    Reduce costs

    Increase efficiency

    Save employment

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 13

    �Reduction in costs for catering �Strict use of internal service providers �Reduction in expenditures on events �Reduction in expenditures on foregoing business trips

    Personnel Measures

    �Reduction in number of leased workers, contractors and employees with limited contract �Flexible use of working-time instruments (e.g. annual leave 2009, overtime) �Reduction of external hiring �Personnel transfers

    Crisis Management at BASF SE in Ludwigshafen

    Efficiency Measures

    �Reduction in expenditures

    �Reduction in provisions

    �No losses of permanent jobs

    �Short-time work

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 14

    Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

    M io

    . €

    2008

    2009

    BASF SE Ludwigshafen 37% lower expenditures on business trips in 2009

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 15

    BASF SE Ludwigshafen 50% reduction in leased workers in 2009

    Jan 08

    Mrz 08

    Mai 08

    Jul 08

    Sep 08

    Nov 08

    Jan 09

    Mrz 09

    Mai 09

    Jul 09

    Sep 09

    Nov 09

    N u

    m b

    er o

    f le

    as ed

    w o

    rk er

    s

    Mar 08

    May 08

    Mar 09

    May 09

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 16

    2007 2008 2009

    20 % of total leave 19 % of total leave 4 % of total leave

    M io

    . € BASF SE Ludwigshafen 80% less provisions for residual leave in 2009

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 17

    BASF SE Ludwigshafen 600 personnel transfers at the Verbund Site in 2009

    � 600 employees transferred in Ludwigshafen

    � 160 production plants belonging to one legal entity

    � Verbund Coordination Committee as decision-making body

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 18

    2117

    3009

    4424

    2759

    1220

    97

    3663

    6696116

    22132145

    5782

    1134

    29301030

    2127

    2568

    2066

    3084

    3662

    4034

    2673

    1965

    283

    636

    197

    0

    1000

    2000

    3000

    4000

    5000

    6000

    Feb March April May June July Aug Sept Okt Nov Dec Jan Feb

    Europe, incl. Ciba

    thereof Germany, incl. Ciba

    thereof BASF SE

    20102009

    BASF Group in Europe Nearly 6000 employees in short-time work in 2009 / 2010

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 19

    Agenda

    1. BASF at a glance

    2. Impacts of the crisis

    3. Measures in tough times

    4. Conclusion

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 20

    Shaping the future in the crisis

    � Measures to adjust capacities and increase efficiency are crucial to tackle economical crisis and have been implemented successfully at BASF.

    � However, short-term measures must be in balance with a continuous and long-term oriented improvement of the structures in a company, such as flexible HR-instruments.

    � Both – long term topics as well as short term measures in times of crisis – rely on strong labor relations which must be built up and fostered in the long run.

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 21

    Thank you for your attention

  • BASF SE - Mathias Schöttke Shaping the future in the crisis 22

    Back Up

  • BASF SE - Mathias Schöttke Sha