The thyssenkrupp steel subsidiary is weakening. In a future paper, the group is now presenting how things should proceed. One site is to be shut down and a total of around 11,000 jobs are to be cut.
The ailing steel subsidiary of the industrial group thyssenkrupp today presented the future concept with which management wants to address the company's crisis and the difficulties of the entire steel industry.
In doing so, the company is responding to the fundamental and structural changes that are continuing to solidify on the European steel market and in key customer and target markets, according to the statement. Overcapacity and the resulting increase in cheap imports, especially from Asia, were increasingly putting a strain on competitiveness.
Significant reductions in capacity and jobs
The concept initially envisages reducing production capacities from the current 11.5 million tonnes to a future shipping target level of 8.7 to nine million tonnes and thus “adapting it to future market expectations”.
According to the group, an essential element in reducing capacity remains the separation from Hüttenwerke Krupp Mannesmann (HKM). If the intended sale of the HKM shares is not possible, thyssenkrupp Steel will discuss “amicable closure scenarios” with the other shareholders. In addition, the processing site in Kreuztal-Eichen is to be closed. 500 employees work there.
According to thyssenkrupp, there will be a significant reduction in jobs as a result. The planned adjustment of the production network and a “significant streamlining of administration” are expected to eliminate around 5,000 jobs by 2030. In addition, another 6,000 jobs are to be transferred to external service providers or the sale of business activities through outsourcing, it says.
Operational related Layoffs should be avoided
Overall, personnel costs are to be reduced by an average of ten percent in the coming years in order to achieve a “competitive cost level”. The stated goal remains to avoid redundancies for operational reasons.
“We take our responsibility very seriously and want to create long-term prospects for as many of our employees as possible,” said board spokesman Dennis Grimm. “We are aware that this path will demand a lot from many people, especially because we will have to cut a large number of jobs in the next few years in order to become more competitive.” The group announced further discussions with the supervisory bodies and employee representatives in order to flesh out the key points paper.
Steel division continues independent
In parallel with the savings program, the parent company wants to further make its steel division independent. Czech billionaire Daniel Kretinsky's EP Group currently holds 20 percent, and in the next step this share will increase to 50 percent.
The group emphasized that it would continue to stick to the “green transformation”. In the future, “green steel” will be produced in Duisburg using hydrogen; the federal government and the state of North Rhine-Westphalia are funding an expensive new plant with a total of two billion euros. Despite the strong financial injection, according to media reports, internal consideration was given to exiting the project.
The problems in the steel sector led to a leadership crisis and the withdrawal of numerous top managers at thyssenkrupp Steel in the summer.
