BP Amoco plc has increased and accelerated its planned job cuts, and officials are now saying the oil giant's plastics and chemicals businesses may be affected more by the cuts than the firms originally indicated.
At a Feb. 17 London news conference, BP Amoco said total job reductions would be 10,000 worldwide — 3,000 more than previously announced. That number represents about 10 percent of the firm's global work force. BP Amoco also moved its target reduction date from late 2000 to late 1999.
From a plastics perspective, the deal merged Amoco Corp., one of the world's largest polypropylene makers, with British Petroleum and its sizable European polyethylene position. The merger became official in December.
Officials earlier had indicated chemicals and plastics may be spared major job cuts, since there was little overlap in the firms' businesses. But BP Amoco spokesman Ian Fowler said that situation may be changing.
``The outlook for chemicals is not very upbeat,'' Fowler said. ``The cycle has moved on since the merger was announced in August.
``We're not getting any recovery from oil prices,'' he said. ``It doesn't look terrific.''
Profit in global plastics and chemicals markets is down because of overcapacity and the Asian economic crisis. Per-pound prices for PE and PP have dropped substantially in the last 18 months.
While it's unknown how many of the 3,000 additional job cuts will be in chemicals and plastics, 20 percent of the second wave will come from the managerial, professional and clerical ranks, officials said.
Fowler did not know whether cutbacks would affect planned PP expansions. The firm's Alvin, Texas, plant is slated for a 550 million-pound-expansion this year, while a 660-million pound-per-year plant is scheduled to open in Grangemouth, Scotland, through a joint venture with Elf Atochem.