The IGBCE trade union is warning of a massive cull in the basic chemicals industry with unforeseeable consequences for Germany as a business location. "There is a risk of losing entire industrial clusters with a tendency toward monopolization, or at the very least, a chaotic deindustrialization," said IGBCE Chairman Michael Vassiliadis. He called for a politically moderated process for a concerted consolidation of basic chemicals: "We appeal to the Federal Chancellor to champion this in Europe and simultaneously kick-start it at home." He noted that models for such a coordinated approach already exist in Japan and South Korea.

Another warning sign is the decision by the US corporation Dow to close several large-scale chemical plants in eastern Germany, including a cracker that serves as the foundation for integrated production in the region. A cracker closure could "endanger countless companies and thousands of jobs in the immediate vicinity." Many basic material manufacturers in Europe could follow suit. The background is that the changed global economic situation has led to overcapacities in this segment, with estimates suggesting more than 20 percent. The IGBCE is therefore pushing for a concerted consolidation of the sector. Necessary capacities and strategically important sites must be identified and secured. "We cannot save every job, but we must avoid an uncontrolled wildfire," Vassiliadis said.

The industry, already suffering from economic weakness and a lack of demand, is also burdened by high energy costs fueled by the conflict involving Iran. Supply chains have also come under pressure due to the consequences of the Middle East conflict, the industry association VCI lamented. Employers are currently in the midst of a new round of collective bargaining with the IGBCE for the 585,000 employees in the chemical and pharmaceutical industry. The union is demanding increased purchasing power and job security. The union leader emphasized that this would by no means overtax the employers.

(Report by Matthias Inverardi, edited by Ralf Banser. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)