Oil Crisis and Consolidation (1974–1988)
The first mild recession in the Federal Republic of Germany occurred in 1966, but it was the oil crisis of 1973/74 that ended the "economic miracle" once and for all. By the time Herbert Grünewald succeeded Kurt Hansen as Management Board Chairman following the 1974 Annual Stockholders' Meeting, the global economy was undergoing a radical transformation. Within just a few months, prices for chemical raw materials based on oil had risen astronomically. Bayer too was affected by these developments. The crisis reached its apex in the early 1980s as a severe global recession set in.
Expansion of Foreign Business
Despite the unfavorable environment, Bayer expanded its international activities, focusing on western Europe and the United States. In the U.S., the company acquired Cutter Laboratories Inc. in 1974 and Miles Laboratories Inc. in 1978. This allowed Bayer to gain an important position in the U.S. pharmaceuticals market.
Bayer also expanded its production base in Germany. In 1973 ground was broken for the company's fifth site, at Brunsbüttel, which was steadily expanded in the years that followed.
Environmental Protection at Bayer
Public awareness of environmental problems increased in the 1970s, and Bayer also intensified its environmental protection efforts. In 1971 Europe's largest industrial wastewater treatment plant was brought on stream in Dormagen by Bayer and Erdölchemie GmbH. In 1980 Bayer Tower Biology was introduced in Leverkusen for biological wastewater treatment. The fruits of Bayer's environmental protection activities were also reflected in sharply declining emissions. Between 1977 and 1987, the amounts of heavy metals in Bayer's wastewater decreased to around 85 and 99 percent, and pollutant emissions to the atmosphere by 80 percent. Bayer's voluntary commitment to environmental protection was also reflected in its capital expenditures. In 1987, the company's management announced its decision to spend approximately DM 3 billion on environmental protection over the following three to five years.
Expansion of Pharmaceutical and Crop Protection Research
Bayer also intensified its R&D efforts, steadily expanding its pharmaceutical and crop protection research activities. In 1979 ground was broken for the Agricultural Center in Monheim. The DM 800 million project was completed in 1988. The pharmaceutical research center in West Haven, Connecticut, was dedicated in the same year.
Successful products to emerge from Bayer's research laboratories in this period included the cardiovascular drug Adalat® (1975), Bayer's first broad-spectrum antibiotic from the class of quinolones Ciprobay® (1986) and the antifungal crop protection product Bayleton® (1976).
A major structural shift in sales also took place during this period. Bayer's pharmaceuticals, crop protection, plastics and coating raw materials sales expanded considerably in the 1970s. In regional terms, sales in North America and Asia/Pacific grew faster than average in this decade. By 1987, 78 percent of the Bayer Group's sales were made outside of Germany, and 45 percent of its employees worked for foreign subsidiaries.
Under the leadership of Hermann Josef Strenger, who took over as Management Board Chairman in 1984, Bayer acquired Hermann C. Starck GmbH, a key supplier of specialty metals and high-performance ceramics, in 1986.
In 1988 Bayer celebrated the 125th anniversary of its founding. Sales that year amounted to roughly DM 40 billion, while the company employed more than 165,000 people worldwide. Additionally, Bayer AG became the first German company to list its shares on the Tokyo Stock Exchange.