Annual Stockholders’ Meeting on May 27, 2015
I hereby give notice of my intention to oppose the motions of the Board of Management and the Supervisory Board with regard to Items 2 and 3 of the Agenda, and will attempt to persuade the other stockholders to vote in favor of the following countermotions.
Countermotion: The actions of the members of the Supervisory Board are not ratified
The separation of the plastics division Bayer MaterialScience (BMS) is likely to be at the expense of the employees, especially outside of Germany. It also means that BAYER is abdicating its responsibility for the safety of the extremely dangerous plants.
In September 2014, the BAYER Group bowed to pressure from the financial markets and announced the separation of the plastics division Bayer MaterialScience. Investors had been urging the company for years to take this step in order to further increase the already double-digit profit margin. In October, the Private Equity firms Advent, Carlyle, Cinven and KKR expressed interest in a takeover.
The people who will suffer from this are the more than 15,000 employees. They had been pressured into making numerous concessions in recent years in order to keep the plastics division in the company. For example, BAYER implemented several "efficiency programs" that destroyed over 2,000 jobs, closing down several sites and cancelling bonus payments. Now it is clear that these sacrifices were in vain.
How things are likely to develop in the long term is clear from the chemicals division of BAYER, which was spun off ten years ago under the name Lanxess. Several thousand jobs have since been destroyed. A large proportion of the workforce had their pay reduced or were transferred to other sites. Over the years Lanxess was split into smaller and smaller pieces. Several units were shut down and others sold off. In view of a possible takeover by "locusts," BMS is likely to experience a similar development.
The union representatives on the Supervisory Board consented to the separation after massive threats from corporate management. Although a job guarantee was negotiated in return, this only applies to the German employees and only for five years. The employees of the Antwerp site had to go on strike and take other industrial action in order to get a comparable agreement. In the United States, however, where BAYER denies 95% of the workforce a collective bargaining agreement and has driven the labor unions out of most sites, there is the threat of drastic cuts in social standards.
Another problem is the risk of industrial accidents: Bayer MaterialScience operates a number of very hazardous plants. The production of polycarbonates and polyurethanes, for example, involves enormous quantities of toxic substances such as chlorine, ammonia, carbon monoxide and even phosgene, the former war gas.
The future owners will be tempted to continue along the path followed by BAYER and further reduce costs for maintenance, personnel and the fire service. This automatically raises the risk of industrial accidents. As BMS operates some of Germany's most dangerous industrial facilities – after nuclear power plants – the hazard risk to people living nearby is likely to increase. It is irresponsible and
unacceptable to build highly dangerous plants without assuming permanent responsibility for their safety.
The separation of MaterialScience also has consequences for the controversial CO pipeline between Dormagen and Krefeld, which is currently shelved following court decisions. If the pipeline ever goes into operation, no-one can know who might be operating it in ten or twenty years' time. Nor would there be any clarity as to the safety level or the maximum liability. This is one more argument in favor of abandoning this unfortunate project before the separation.
Moreover, cities like Leverkusen, Krefeld and Brunsbüttel are threatened with a drop in their tax income if BAYER sells the division to private equity firms. Such firms tend to charge the purchase price to newly acquired companies as debt to reduce profits and therefore tax payments. And apart from that, finance firms are often headquartered in tax havens.
The Supervisory Board agreed to the separation of BMS although no guarantee was given that jobs abroad would be safeguarded. And BAYER has given no assurance that safety standards will not be lowered. The actions of the members of the Supervisory Board therefore should not be ratified.