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TMCNet: BASF workers told plant is closing

[September 26, 2008]

BASF workers told plant is closing

(The Decatur Daily (AL) Via Acquire Media NewsEdge) Sep. 26--The 125-employee BASF Corp. plant in Decatur will close within a year, officials told employees Thursday.

The employees, who generally make between $14 and $20 an hour, and 20 contract employees will lose their jobs.

The plant is closing because PPG Industries is buying BASF's North American coil and extrusion coatings business. It is not buying the Decatur plant, but it is buying BASF's inventory, customer list, patents and trade names.

After 11 or 12 months, PPG said, it will close the Decatur plant and shift production to a plant in Springdale, Penn.

BASF will not lay off any Decatur employees for six months, Site Manager Christopher Lorge said. At that point, depending on PPG's inventory needs, it may begin layoffs. After 12 months, no employees will remain at the Decatur facility.

Those who remain at BASF for at least six months will receive a one-month retention bonus, Lorge said.

Breaking the news

Lorge told employees the news at a breakfast at Burningtree Country Club at 9 a.m. Thursday. Many of the employees worked at the plant before Germany-based BASF bought it in March 2000.

The company gave employees the rest of the day off.

"We said to go home, talk to your families," Lorge said. "There's some grieving involved as they try to digest all this."

Lorge said severance packages, based on years of service, and outplacement services would be available for employees.

"We're going to be very active in finding employment for these folks, not only at BASF but outside BASF," Lorge said. "We've got a great group of folks, very talented chemical operators, who we think would be valuable for any other facility in this area."


The employees, who are not unionized, are on an 85-point pension system. They become fully vested when their age plus their years of service equals 85. For example, a 55-year-old becomes fully vested upon reaching 30 years .

"For those close to retirement, we'll see what we can do to bridge them," Lorge said.

The Decatur BASF facility will produce paint and coatings for PPG customers for a year. After that, PPG's Pennsylvania plant will take over production.

"We'll keep making the paint like we were before, but it will be for PPG customers," Lorge said. "They want us available for a year, but we may not need as many people for that whole year. Everybody's guaranteed at least six months."

Other facilities

PPG's purchase also includes smaller BASF facilities in Belvidere, N.J., and Monterrey, Mexico. It plans to close those facilities, too.

PPG will add 55 to 60 new jobs and $8 million worth of equipment to its Springdale, Penn., plant.

BASF will dismantle the Decatur plant. Lorge said the company would decide what to do with the property at 152 Ipsco St.

Lorge said the slowdown in U.S. housing has made it hard to remain profitable.

Decatur produces coatings for roofs, siding, garage doors and similar products.

"This business is kind of struggling, especially with the housing market the way it is," Lorge said. "There are probably too many players in the field. There has been price erosion in the industry for a few years now because there are so many companies involved. It's very difficult for a lot of companies to make money in this business now."

BASF decided to divest the business after deciding it could no longer make an acceptable return on investment, Lorge said.

The plant began as HCI Coating in 1965. Originally, it had six employees and served one customer, Fruehauf Corp.'s aluminum sheeting plant.

In 1968, Whittaker Corp. bought the plant. Morton International, which also produces table salt, bought the company in 1990.

It reached 160 employees at its peak.

Rohm and Haas Co. bought the company out of reorganization in 1999, and BASF bought the portion of the business including the Decatur plant a year later.

The mood of the employees was more sad than angry Thursday, Lorge said.

"They're disappointed, although I think they were relieved we weren't coming in and shutting the doors on them," Lorge said. "People have been here for a long time. It's a real family here. Obviously there's a lot of sadness."

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