BASF to cut 2,600 jobs as energy crisis hits German industry
finance.yahoo.com
finance.yahoo.com
And what did they learn from it? => Hey, look, China! Let's invest another 10 billion there.
They even fired Saori Dubourg just a few days ago - She was the only board member that disagreed with this China strategy.
> Hey, look, China! Let's invest another 10 billion there.
China is a rapidly growing economy. Where else should they invest? Also note, that unlike Russia even before the war, it's also the biggest trading partner of the USA. The USA was able to profit from the Ukraine war so much because they didn't have any relevant trading relationships with Russia, so it was easy for them to demand sanctions. But if there should ever be a time where China does something that requires sanctions, then the USA will feel it a lot. So it's a different situation here.
Ultimately, if there is trade then there is also a common benefit. Russia brought cheap gas to europe, which was really great for the european economy.
I suspect it would be from financing and selling military equipment to Ukraine and allies?
USA GDP 2021: 23315 Billion USD
EU GDP 2021: 17177 Billion USD (~10x Russia)
Russia GDP 2021: 1775 Billion USD
Equally you could say China and India are profiting from the war and are incentivized to continue to abstain and not add pressure to Russia to end the war because they are profiting off of cheap oil imports from Russia.
So what I'd say, because the inevitable response is some grand conspiracy about American natural gas companies "wanting the European market", is that anytime someone complains or tries to complain about American natural gas companies just remind them that everyone in the world including China and India are in the same grand conspiracy to pillage Russia.
If you believe that American oil and gas companies are so powerful as to cause the war in Ukraine, then you should just submit to their sublime and all-knowing global dominance because it's such as masterstroke and clear display of power that you have no hope of affecting change and should just get along and enjoy your day-to-day.
Or, you can understand the more simple truth which is that Putin is butthurt about the end of the Cold War and literally thinks that he should recreate the Russian empire but he and the Russian state apparatus misjudged the war and how NATO and western-allied countries such as South Korea, Japan, and others would respond.
Russia is currently run by Putin, who was a KGB agent in the Soviet regime.
USA doing well economically when Europe suffers not just in Ukraine. But we don't want to ack that. Why do people can't acknowledge that? We Europeans are doomed in couple of years. Took in lot of migrants and also dancing on tunes of USA.
Second you have a faulty premise re: "why do NATO need to expand". NATO doesn't need to expand, and whether it's at the borders of Russia or China isn't really relevant. NATO expansion that has occurred where it does border Russia (NATO doesn't expand or border China so already you're showing either a lack of geopolitical knowledge or you are just spewing propaganda) has been at the behest of those countries which seek to partner with NATO to provide security guarantees. Russia has invaded them in the past, the US has not. End of story there. Easiest way for Russia to not be "worried" about NATO is to stop being worried about it. Americans and Europeans don't really want to engage in war in Europe, and especially not with Russia since there isn't anything to gain.
> And now we want to point against India or China not acting against Russia.
Mainly because Russia engaged in an aggressive war against Ukraine, but if you're going to accuse some countries of trying to win economically against Russia then you have to include all countries that want to win economically against Russia, and that includes China and India who are more than happy to pay low rates for Russian oil and gas. If they cared about Russia they'd seek to stop the war so sanctions are lifted and Russians can enjoy a better standard of living and both China and India could return to paying 2x-3x prices for Russian oil so Russians can profit. Instead they want cheap oil.
> Even now countries like Yemen etc are suffering. But do we have sanctions against Saudis? No. Instead we still trade with them and US even sells weapons.
And China and India buy Russian oil while they engage in an aggressive war. Bad logic on your part. Not to mention other issues such as genocide against Uighur Muslims in China's own borders.
> USA doing well economically when Europe suffers not just in Ukraine. But we don't want to ack that. Why do people can't acknowledge that? We Europeans are doomed in couple of years. Took in lot of migrants and also dancing on tunes of USA.
US has been doing well economically regardless of whether or not Europe "suffers". If you hold that the Europe is doomed and just dancing to the tune of the USA then there isn't anything you can do, you have no agency, and you should stop caring and just try and enjoy your life.
Or you can accept that the world is much more complicated than what you are suggesting, and maybe Europe wouldn't be doing so bad (as you say) if it wasn't on the receiving end of a wonton and stupid Russian war to satisfy some butthurt dictator's imperial ambitions. Whoops.
The world market prices for gas have skyrocketed, which is good for every country that has net exports of gas, or is self-reliant (USA), and bad for every country that has net imports (EU). The country that has profited the most (relatively) is probably Qatar which sits on the single biggest natural gas field in the world whose value went up rapidly in the past year, and has a relatively tiny population.
The EU was Russia's biggest trading partner, and a cut in relations always hurts both sides. So it hurt the EU way more than it hurt the USA. It's not just about gas, the EU also imported minerals and exported many goods like cheese or wine to Russia.
It's also important to note that war is always extremely expensive, to both sides.
On the level of individuals, there were certainly many people in the US for whom the war had negative consequences economically, but there were also many for whom it had really positive ones, say people working for the oil and gas industry.
Like, some place they would like to be rapidly growing instead of China? Also some place that we don't expect to be at war with in the next few years?
China's politics now has some similarities to that of Putin - they've entered a vicious circle of being self-convinced by their own propaganda. And propaganda says Taiwan should belong to China even if it means war.
I'm not an expect in China though, but wouldn't put any of my own money on China now.
Basically their are betting half the company that China does not attack Taiwan and/or does not ship weapons to Russia and/or does not give them the "Jack Ma" treatment. Quite risky, if you ask me.
If china attacks Taiwan Europe will react the same way Asia reacted to Russia in Ukraine - with a shrug. Too far away to really care.
With Gas there was existing storage capacity and after 6 months Norway and LNG were there to replace Russian supplies. Sure it cost more but it is out there to be bought internationally.
Germany won't be shipping in tanker loads of chips from Qatar, the manufacturing capacity just doesn't exist.
This is why Europe and America have woken up to microchip fabrication issue. The capacity to cover being cut off from TSMC fabs wont be online in Europe for many years.
If BASF is diversifying then perhaps into more Western-oriented places - wherever these might be.
Well, it's the USA fault that they're more unpredictable now. They reduced one of China's most important trade partners into "just a rebel island near you that only trades with the western world".
China also used to depend on Taiwan for semiconductors and advanced manufacturing. Then the USA cuts them from buying Taiwan semiconductors and advanced manufacturing.
The decision for a future invasion went from "economically undesirable" to "strategically easy" - if I can't have it, and the USA have it, the USA might as well not have and not use it.
"Taiwan could become the next Ukraine" seems to imply that they would want to capture the island with infantry; but no such thing is necessary - for tactic/strategic reasons is would be better to deny the USA (and possibly the inhabitants of Taiwan) from ever using Taiwan again by removing the isle advanced manufaturing instalations, logistic and military infrastructre from the map.
There's definitely still a significant economic relationship between China and Taiwan. For example, one of the biggest companies operating in China, Foxconn (which makes iPhones), is Taiwanese: https://en.wikipedia.org/wiki/Foxconn
Taiwan Semiconductor (TSMC) is a major supplier of chips for iPhones, so presumably these chips are being imported into China: https://bgr.com/tech/apple-orders-all-of-tsmcs-3nm-chip-supp...
Classic incentive duration mismatch. Short term bonuses vs long term profits.
... and still has enough money left over to pay dividends.
Mass layoffs should be banned as long as a company still has money left to pay shareholders. Having rank-and-file employees suffer the first for corporate misgovernance instead of the shareholders who failed in their duty to keep corporate leadership accountable is disgusting.
It would make a lot of sense in a worker owned business.
That works well until companies refuse to hire (or become much more conservative in hiring) because every employee is now a liability. There's no free lunches here. Your proposal is just a roundabout way of taxing profitable corporations and making the labor market less efficient in the process.
Cry me a river is all I can say to companies thinking that way. Someone has to do the work after all, and demographics will only make the problem of a lack of workers worse.
And for what it's worth, companies in countries with extremely strict labor laws like France don't really have a problem either. In the end it's the classical "corporate whining" meme.
Note that my argument works even if you're anti-corporate profits and pro-redistribution. Trying to perform redistribution and jobs guarantee at the corporate level causes a bunch of issues. Higher friction in the labor market is one. Another is that it favors large businesses over small ones. Large companies can afford the armies of lawyers to ensure that all the firing/layoff paperwork are compliant. They're also big enough that they have the law of large numbers on their side. A small business with 10 employees and one crappy one that they want to get rid of doesn't, and forcing them keep them on is going to handicap their cashflow.
> Someone has to do the work after all
The whole point of the person being laid off/fired is that the work isn't needed. You think companies are laying off people for fun?
>and demographics will only make the problem of a lack of workers worse.
If the workers are actually needed, why do we need to force companies to hire them? It's like arguing we're running out of natural gas, so we need to force households into buying more natural gas.
>And for what it's worth, companies in countries with extremely strict labor laws like France don't really have a problem either.
Remind me, what's the average going salary for software engineers in france and how does it compare to american salaries? And where are the top tech companies in the world headquartered?
And then there's all the other industry that supports that heavy industry. So if the heavy industry goes, some of that other industry also goes. Europe should have multiple strategies for dealing with it. Steel, fertilizers, plastics and aluminum all are still needed in the future.
Iron reduction needs to move to a place where cheap electricity and iron ore are available. Cheap electricity won't be available in the Ruhr valley in the absence of nuclear power in the future. It's a lousy place for renewables. Spain and Portugal would be absolutely terrific for renewables. I don't know about mineral availability though.
Iron reduction -> steel -> car bodies -> car accessories etc.
I call it the industry refactoring.
This is one of their stated targets. To increase shareholder dividends and to grow the company. Is this not just having your cake and eating it too?
I assume it just means they could have paid shareholders a larger dividend but chose to reinvest some of it for growth instead.
Do the math on what happened to this business...
>Closure of the TDI plant and the precursor plants for DNT and TDA: Demand for TDI has developed only very weakly especially in Europe, Middle East and Africa and has been significantly below expectations. The TDI complex in Ludwigshafen has been underutilized and has not met expectations in terms of economic performance. This situation has further worsened with sharply increased energy and utility costs. BASF’s European customers will continue to be reliably supplied with TDI from BASF’s global production network with plants in Geismar, Louisiana; Yeosu, South Korea; and Shanghai, China.
>Geismar, Louisiana
[1] https://www.basf.com/global/en/media/news-releases/2023/02/p...
Joking aside, the US is actually energy rich and it can make sense to do that.
Sure, it'd have been best to invest in nuclear power (and nuclear fusion research) for the last 30 years, but right now that isn't a quick solution.
Why would they want that? Europe is their closest ally wrt. to values and security interests. If US remains the only significant democratic country in the world, in presence of such strong antagonists as China, they are pretty fucked.
> but what is the other option?
The other option would be to at the very least diversify sources of gas, and aligning economic incentives with democratic values (setting tariffs appropriately etc.). Ideally investing in renewables earlier and much more than it was done/is being done.
https://www.eurofer.eu/assets/publications/brochures-booklet... : "a turnover of around €125 billion and directly employs around 310,000 highly-skilled people, producing on average 153 million tonnes of steel per year."
https://www.consilium.europa.eu/en/infographics/how-eu-count... : EU remains one of the largest exporters.
You're going to have to quantify "survive". And stop reading doomy implications out of fairly minor news changes.
At some point, these industries are going to pivot closer to the raw materials and the actual consumers, the growth economies in the 3rd world. Western Europe won't be a major player.
Interdependence works only with full democracies. When EU countries need to provide high living standards and their energy source doesn't have to do that, the leaders of the energy source can choose to play EU since they will have more tolerance to economical pain. Even if they don't misbehave, their corruption hurts regular EU citizens when this energy money comes back into EU to disturb the housing market in an attempt to launder the Russian money.
I'm more worried about how to make the economy of it all work out. Someone is going to pay for all that it's going to be through taxes, and whomever gets that lottery ticket might not respond as expected (big Tech may decide to leave, smaller business could decide to simply shut down, regular people may cheat on taxes or start building guillotine replicas in public places, and so on.).
Honest question, exactly how are they planning to do that absent cheap and abundant energy? Afaik the energy resources present in the Northern Sea are not up to the task (for re-industrialising the whole of Western Europe, that is).
Until now there's been over-investment in renewables, but too little in modernizing the power grids. The result has been windmills being stopped during production peaks, because there's nowhere to send the power.
I'd guess investing in grid upgrades, storage and cheap baseload capacity will be the main focus for the European energy the next 20 years.