As part of a new five-year framework agreement for the Ludwigshafen main site and its 36,000 employees, BASF has extended its guarantees that there will be no involuntary layoffs up to 2020. For the same time period, it has committed to spending at least €6 billion on infrastructure at the site, including capital investment, upgrading and maintenance.

The new agreement will take effect on Jan. 1, 2016, replacing the previous pact that expires at the end of this year.

With economic and social change proceeding rapidly and becoming less predictable, the new agreement, labeled “Meeting the challenges of constant change together” offers both flexibility and reliability and will enable the Ludwigshafen site to remain competitive, said managing board member Margret Suckale, whose board function includes overseeing human resources.

BASF stressed that future employer-employee relationships will require flexibility, especially in areas where capacity utilization and order levels can fluctuate considerably. “Job security is highly valued and a decisive factor in motivating employees to actively support the constant change,” Suckale said.

The changes ahead “will be very demanding for employees and managers, so they need to be flexible and prepared to take on new challenges,” said Wolfgang Hapke, BASF’s President, Human Resources, adding that “job security and entrepreneurial flexibility go hand in hand.”

The group noted that demographic change is one of the great challenges it faces. By 2020, one in two employees at Ludwigshafen will be older than 50 and, from 2018, the number of employees retiring will start to increase sharply. To cover its own demand for skilled labor, BASF said it will continue to offer vocational training as well as additional and flexible qualification programs on a comparable level as in the past.

The world’s largest chemical producer underscored also that research and development will continue to play a particularly important role in maintaining the site’s innovative strength and that spending will be maintained at the high level of previous years at Ludwigshafen, the group’s most important location for R&D.