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Steel industry – Stahlfusion becomes a test for Thyssenkrupp | News

Sunday, September 17th, 2017 | Economy

Heinrich Hiesinger was not yet in office as a Thyssenkrupp chief, since he already made it clear to the employees where the trip would go under his leadership: "I promise you that we are together with prudence, but also with great perseverance all of which is important for our company, "the manager wrote after his nomination in May 2010 to the employees. Stahl is a company's core, he said at the time. Seven years later, Hiesinger plans to outsource the business to a joint venture with Tata Steel. The Thyssen CEO thus presents the Group with a tear test. Employee representatives go against the plans on the barricades.
This is because steel is the heart of the Ruhr region with its more than 200-year history. With his plans Hiesinger put the ax on the roots of the company, say critics. But the farmer's son, who was born in Bopfingen in Baden-Württemberg, is convinced that Thyssenkrupp is better off without the steel business which is sluggish. He wants to form a robust technology group. Günter Back, the steel works councilor, does not take the argument. He warned Hiesinger not to put the steel on the siding. "This is no longer our man."
Failed the deal, failed Hiesinger
Hiesinger has been focusing the Group's business on elevators, turbines, autotrailers and submarines for years. The steel business is struggling with overcapacities, price pressure, cheap imports from China and increasingly stringent climate protection requirements. However, employee representatives fear that a merger with Tata in Germany will lead to numerous jobs being canceled and locations closed. The merger could be the beginning of a break-up of the group, they argue. On 22 September the steel cookers in Bochum will protest against the plans. The next weekend, the Group's Supervisory Board will discuss the project. If the employee representatives say no, and the stalemate will come to a standstill with the capital side, Ulrich Lehner could win his double right to vote. But important decisions have always been made by mutual consent – and Thyssenkrupp is proud of this.
The first major shareholders are becoming impatient. "In the past, the large-scale deadlock at Thyssenkrupp has remained, which concerns the restructuring and the transformation to the technology group," says Ingo Speich from the fund company Union Investment, which is one of the top 20 investors in the group with a 0.3 percent share , "This is a compelling step that we must now see." Even for Hiesinger personally, much is at stake, postponed Speich afterwards. "A failure would be very negative for Hiesinger, who has worked long on the deal."
Worry about the jobs
Trade unions and employee representatives, on the other hand, fear that the management could make a big mistake, as years ago with the construction of the American steel business. The tour ended with failures, bad luck and breakdowns for the Group's bottom line with a loss of eight billion euros. This corresponds to about half of Thyssenkrupp's stock exchange value.
As far as Tata is concerned, workers' representatives are now asking management for clarity about the merger plans. "We want to know what the board is up to, we will evaluate and then decide," says Deputy Chairman of the Supervisory Board of Thyssenkrupp Steel Europe and former IG Metall CEO Detlef Wetzel. Scale, the Thyssenkrupp has a future for its employees.
Details are not mentioned by the employee representatives. In addition, however, the role played by Thyssenkrupp in the joint venture is, in addition to employment and location assurance, likely to play a role. The higher, the greater the influence of the Germans on the course of the joint venture – and the greater the co-determination rights. The longer this is guaranteed, the better. Fundmanager Stor initially assumes a participation of the companies in the ratio 50:50. Industry analyst Björn Voss from Warburg Research says: "I believe workplace guarantees and investment commitments will be made, similar to Tata's for the Port Talbot plant by 2020."
Hiesinger still has to fight for the trust of the employees in steel fusions. After all, he had already promised them in the May 2010 letter: "I will ensure that our cooperation will be based on open and honest communication as well as mutual trust."
(Reuters)

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