A chemical company going astray: An ARD documentary wants to settle accounts with BASF. And at the same time reveals how wrongly Economics Minister Habeck assesses the entire German economy.
2030 is the year in which Germany – according to the climate protection program – wants to have saved two thirds of all emissions. To achieve this, greenhouse gas emissions from energy-intensive industries must be reduced by 2.5 million tonnes of CO2 equivalents annually.
Coincidentally, 2030 is also the year in which the ten billion euro BASF plant on an island off the Chinese city of Zhanjiang is scheduled to be completed: a mega production plant for chemical raw materials.
So can Germany be decarbonized by simply driving emission-intensive industrial companies abroad?
Anyone expecting to hear such tones in the ARD story “BASF – The Chemistry of Money” (available in the media library) will be disappointed. Author Christian Jentzsch is less concerned with the future of the business location than with a moralizing campaign against the chemical company. The same tool that Federal Minister of Economics Robert Habeck also likes to use to threaten companies. But like Jentzsch, Habeck is making fundamentally false assumptions.
The BASF company was founded in Ludwigshafen in 1865 by Friedrich Engelhorn, where it grew into the chemical giant with the highest sales in the world. With – still – 39,000 employees, around a third of BASF’s global workforce works in the city on the Rhine. But while BASF is now building its newest plant in China, in Ludwigshafen it is now being cut back, dismantled and closed. Eleven production facilities at the headquarters are to be closed.
Despite criticism, BASF is sticking to its expansive China strategy. Why? When asked this question, former CEO Martin Brudermüller answered ARD’s Jentzsch in an annoyed tone: “You can’t ignore 50 percent of the global market. You can’t ignore 80 percent of market growth.”
In other words: Big business in the chemical industry no longer takes place in Germany. That Germany’s economic giants continue to rely on their homeland out of a sense of tradition? Only our economics minister dreams of that.
Environmental protection is not available for free: the transformation into climate-neutral or at least climate-friendly companies usually costs the economy dearly. But not changing is not a solution either, as fossil energy is becoming more and more expensive and regulatory pressure towards decarbonization is growing.
While small and medium-sized companies sometimes collapse due to this situation, large corporations can much more easily take the path of least resistance and relocate their production activities to countries where climate protection is much less important.
Brudermüller also took issue with Germany’s “lofty goals” for decarbonization and the Green Deal when speaking to Jentzsch: “Can you tell me how this is supposed to be financed?”
Although this phrase can be read in almost every company presentation, many companies actually see employees primarily as what is hidden behind the acronym “HR”: as a human resource that – depending on regional conditions – is sometimes easier and sometimes harder to obtain.
Why bother with a shortage of skilled workers, works councils and collective agreements in Germany when people elsewhere work for low wages without making a fuss? Unemployment in China is growing, and young people in particular are under pressure there. A Gen Z that asks about fruit baskets, work-life balance and four-day weeks doesn’t know China.
Of course, China is not the new Garden of Eden for Germany’s economic giants, because they also have to comply with the government’s strict regulations there. Business journalist Bernd Ziesemer therefore believes “that Mr. Brudermüller did not see the dark side of China.” But is that so? Or are BASF prepared to settle in the shadow of a dictatorship instead of continuing to live in the red-green traffic light?
Tax burden, bureaucratic madness, regulatory rage: most of the factors that are currently detrimental to companies in Germany as a business location are not discussed in the ARD documentary. What the departure of the chemical giant means for Germany as a location and what signal this emigration sends to other companies is also not discussed.
Instead, people at the new BASF site in Zhanjiang as well as residents around a BASF Total plant in Port Arthur, Texas, USA, have their say. People who are – probably rightly – worried about air and water pollution and the strain on their health. But at the same time they all live from and with the chemical industry. Those who are hungry today think less about the world of tomorrow. You always have to be able to afford morals.
On the part of the economy, however, you also have to be willing to afford morality. The voices from China and the USA, the list of violations by the chemical industry of applicable emissions regulations and environmental protection laws clearly show what can happen if corporations are given too much freedom.
The growing danger of deindustrialization in Germany is a warning to the Federal Ministry of Economics not to overestimate the intrinsic desire of companies in this country to transform. But the tendency of some corporate bosses to forego sustainable action and economic activity for short-term profits should not be underestimated either.