Bayer has been hit the hardest. Chairman Manfred Schneider observed last week that the company's net loss for its third quarter was the first in its history. "We are simply unable to absorb the withdrawal in August" of the cholesterol-lowering drug Baycol "and the severe downturn through the third quarter," he said.

Exceptional costs of $449 million and pharmaceutical operating losses of $423 million--caused by the Baycol withdrawal and production problems with Bayer's Kogenate blood treatment--were mostly to blame.

Despite the current problems, health care is still "a core business" for Bayer, Schneider emphasized. The company is open to the idea of a partner, but says it will be the main partner in any alliance or venture.

The company has begun nine cost-cutting projects designed to eliminate roughly $1.6 billion in costs by 2004–05. Bayer will reduce its global workforce by 2,100 jobs by the end of the year and will eliminate another 2,400 by 2005, plus it will cull some 1,300 positions from its pharmaceutical business.

At BASF, extraordinary income from divestitures added nearly $100 million to net profit in the third quarter and $5.41 billion to net profit for the first nine months of the year. Without that, the picture would have been significantly different--but still positive.

BASF is examining which plants can be shut down temporarily to help improve low capacity utilization. "Capacity utilization of our plants is at its lowest level since the recession of the early 1990s," Chairman Jürgen F. Strube pointed out. The average utilization rate for the company's massive Ludwigshafen complex is 68%. The temporary closures would affect perhaps 50 to 60 of the company's 250 plants, he estimated.

Meanwhile, at Degussa--the newest of the Big Three--Chairman Utz-Hellmuth Felcht argued that there had been "considerable improvement" in the company's core businesses, despite an outlook that has "deteriorated perceptibly."

Degussa plans to close nine facilities in various divisions in Europe and the U.S., introduce short workweeks for some plants, and temporarily close others. The measures, Felcht said, will result in the loss of 1,000 jobs from its sites around the world by 2004, in addition to the 3,000 cuts already announced.

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