It will run for five and a half years, from Jun. 1, 2020 to Dec. 31, 2025, and replace the current agreement, which would have expired at the end of 2020.

Entitled “Living the new BASF together!”, one of the pact’s most important provisions protects workers from layoffs for the duration. It also calls for the world’s largest chemical producer to invest at least €1.5 billion annually in new projects, modernization and maintenance at Ludwigshafen up to 2025. This compares with an investment pledge of €1.2 billion in the previous four-year agreement.

Additionally, BASF said the new terms negotiated with employee representatives over a one-year period will give internal employee development priority over external recruitment, and management will work “even harder” to enhance employee expertise in the respective fields.

A key focus of the updated agreement is BASF’s commitment to in-house vocational training. The site pact also offers workers an annual ticket for the local Rhine-Neckar transportation network at a subsidized price.

The chemical group said Ludwigshafen should act as a “role model” and a pioneer for the entire group when tackling key challenges. To this end, the provisions call for enhancing occupational and plant safety; resource-saving and low-emission production; expansion of digitalization in production, administration and business processes and future-proof mobility solutions in goods and passenger transport as well as further strengthening of Ludwigshafen as a key hub for the BASF R&D network, despite increasing globalization of research activities.

“Ludwigshafen is our laboratory for the future. It is here that we want to show that climate protection and growth are not a contradiction. It is here that we develop and test new digital technologies, which we then implement worldwide,” said site manager Uwe Liebelt, who is also president European Site and Verbund Management for BASF.

Commenting on the new terms, board member Michael Heinz, who is also site director, said conditions for business are changing at an ever faster rate. If Ludwigshafen is to remain successful in a fast-changing business environment, it needs to become more agile and flexible. With this agreement, he said, BASF is “supporting the necessary cultural change while also creating reliable framework conditions for our employees.”