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Thyssenkrupp Steel Board to Meet Next Week as Major Overhaul Takes Shape, Sources Say

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) – Thyssenkrupp is expected to present initial details of planned major restructuring at its steel division next week, two people familiar with the matter said, in what is likely to result in substantial capacity and job cuts at the unit.

The supervisory board of Thyssenkrupp Steel Europe, Germany’s largest steelmaker, is scheduled to meet on April 11 to discuss the strategy, the people said, declining to be named as the talks are confidential.

The review is expected to form the basis for talks with powerful labour unions, which have half of the supervisory board seats.

Details may include more specifics on which parts of the business will be affected, the people said, also pointing to possible changes at steel joint venture HKM, which Thyssenkrupp co-owns with Salzgitter and Vallourec.

The plan may lay the foundation for thousands of job cuts at the business, they said, though it was not clear yet whether there would be any forced layoffs and that no final decisions had been taken.

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Under a previous agreement with unions, Thyssenkrupp has ruled out job cuts at its steel unit until March 2026.

Thyssenkrupp Steel Europe and parent Thyssenkrupp AG both declined to comment.

Handelsblatt in February reported that at least 5,000 of Thyssenkrupp’s roughly 27,000 steel jobs were at risk.

Fears of a larger turnaround at the division were stoked in February, when Thyssenkrupp Steel Europe’s Chairman Sigmar Gabriel warned the business had to fundamentally change.

This could include both job cuts and capacity reductions, Gabriel said, pointing out that while Thyssenkrupp Steel Europe could produce nearly 12 million tonnes of steel a year, it only sold around 9 million tonnes and maybe even less in the future.

Capacity could be reduced by shutting down some of Thyssenkrupp’s blast furnaces, the sources said. That is also a sticking point in talks with EPH, the energy holding firm of Czech billionaire Daniel Kretinsky, which Thyssenkrupp tries to win as a co-owner of the steel division.

The planned overhaul comes in response to continuing weakness in the auto sector, Thyssenkrupp’s biggest client group.

The slowdown has already caused a number of suppliers, most notably ZF Friedrichshafen and Continental AG, to announce job cuts.

IG Metall, Germany’s biggest union which represents Thyssenkrupp workers, has called a general meeting for April 30 to air its frustration over what it fears could be painful cuts.

(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Tomasz Janowski)

Copyright 2024 Thomson Reuters.

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