On the last working day in January, Lanxess (Leverkusen / Germany; www.lanxess.com) and its German employee representatives concluded a crisis response plan similar to that worked out at the same time for Bayer MaterialScience (Leverkusen / Germany; www.bayerbms.com). The Lanxess plan calls for a reduction of weekly working time for its 5,000 non-managerial employees from 37.5 hours to 35 hours, with a corresponding pay cut. The crisis plan, which also includes a number of – unspecified technical improvements – is planned to stay in force for 12 months.

Under the plan, management board members will forego 10% of their fixed salary, and variable salaries of other managerial employees will be adjusted. Annual fixed salary reviews for German managers and employees abroad are to be postponed by at least six months. In some countries, pay raises will be postponed for 12 months and are expected to save EUR 50m in cash costs during 2009 and 2010.

Like the Bayer polymers subgroup, Bayer’s former chemicals division also has been hit hard by the crash in demand, especially in the automotive and construction sectors. “We are in the midst of a global recession,” said Lanxess CEO Axel Heitmann, adding that “we do not expect the current economic environment to radically improve going forward.” Earlier in January, he told a German newspaper that operating rates of the company’s plants had been cut by 25-80% to deal with a decline in demand of up to 50% for some products – see Plasteurope.com of 23.01.2009.