Posted on 05/12/2004 1:21:47 PM PDT by lelio
News that BASF will lay off as many as 500 workers at its Geismar site over the next year reaffirms Ascension Parish President Ronnie Hughes' beliefs that the chemical industry in the parish "will not turnaround soon."
BASF officials announced last Thursday that 400 to 500 jobs will be lost at the Geismar facility and another 150-180 positions will be eliminated at the Freeport, Texas, site.
"To be a world-class competitor, we must continually strive to be a low-cost manufacturer," said Klaus Peter Loebbe, chairman and CEO of BASF Corporation. "Our business and industry are challenged by over-capacity, high energy costs, high raw material cost and the movement of customers to other countries. We are acting to address these issues and to improve our competitiveness."
"I've been trying to prepare you," Hughes told members of the parish council Thursday night. "Our chemical industry has been the pipeline of revenues for many years."
Hughes said officials must work together on business retention, tourism and other economic development initiatives. Hughes called for an economic development fund supported by the sheriff, assessor, cities and other officials to help recruit new businesses and keep current businesses competitive.
"We must expect the best, but prepare for the worst,... and that's what we've been budgeting for," Hughes said Monday. "Realistically, I don't expect the chemical industry to turnaround soon."
Hughes said he was not been surprised by the layoffs because it "is cheaper for the plants to make the products overseas and ship it here." He said he has not been told yet how many of the lay offs will effect Ascension Parish residents. He said his administration has already been taking a serious look at cutting the budget because of the downturn in the economy in recent years.
Hughes said he has been pushing for a change in the way economic development issues are handled in the parish. He said the parish must work on recruiting new business and diversifying the economy.
BASF officials said the lay offs are part of an initiative to improve the efficiency and competitiveness of its major manufacturing sites in Geismar and Freeport.
The initiatives target savings in the range of $30 million to $20 million annually. The changes are part of the company's ongoing restructuring program, which was first announced in August 2003 and targets savings of at least $250 million annually by 2006.
"The reduction in staff will present us with difficult decisions and we regret the impact these changes will have on our employees an community. However, we compete in a global industry. We must act now to implement process, productivity an technology enhancements that will help us to attract customers sand retain high quality jobs in the future," said Otis Hall, vice president and general manger of BASF's Geismar site. "I am confident that the BASF team in Geismar can meet this challenge successfully."
A spokesman for BASF's Geismar site said no plans have been announced concerning specific jobs to be eliminated. Jonathan Evans, a BASF spokesperson, said the cuts will be made across the board and some of the company's 400 contract workers could be effected. Currently, BASF employs 1,400 employees and contractors.
Hughes said this is the area's third lay announcement in the last year.
Since 1998, some 2,000 of the state's 3,500 ammonia plant workers have been laid office at numerous plants. High natural gas prices and a worldwide excess of fertilizer combined to create an industry downturn.
Local layoffs included 64 at the PCS Nitrogen facility in Geismar and 24 workers at Triad Nitrogen and the closure of it Donaldsonville ammonia facilities.
Over seas they do not have the draconian environmental requlations we have in the USA.
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