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Thyssenkrupp is planning to slash its steel workforce by 40 per cent, dealing the latest blow to German industry as it warned of oversupply in Europe and “a rise in cheap imports” from China.
Germany’s largest steelmaker on Monday said it aimed “to cut around 5,000 jobs by 2030 through adjustments in production and administration”, with a further 6,000 roles “to be transferred to external service providers or shed through the sale of business activities”.
Alongside the job cuts, Thyssenkrupp Steel Europe said it planned to close a processing site and slash annual production capacity by up to a quarter to between 8.7mn and 9mn tonnes.
“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,” said Dennis Grimm, the steel division’s chief executive.
The announcement of more big job losses across Germany’s industrial heartland — the backbone of Europe’s largest economy — comes as election campaigning gathers pace in Berlin.
Companies such as Volkswagen and automotive suppliers ZF Friedrichshafen, Schaeffler and Bosch have in recent months announced tens of thousands of job cuts, as they warn of slowing sales of new cars in Europe.
The declining European car market, where demand in the past five years has shrunk by roughly 2mn vehicles, has hit steelmakers alongside other companies in the motor industry supply chain.
Danni Hewson, an analyst at AJ Bell, said the steel cuts shone a “harsh light” on Germany’s economy, adding that its industrial heritage was “undergoing a painful metamorphosis”.
Shrinking European demand for steel has coincided with a rise in Chinese exports of the metal, amid growing excess capacity. China, the world’s largest steel producer, is on track to export more than 100mn tonnes this year — its highest export figure since 2016.
The surge has intensified trade tensions, prompting European steelmakers to call on officials to impose tariffs, as the flood of Chinese steel has sharply driven down prices across Europe.
Thyssenkrupp Steel in September told the Financial Times that Europe’s “sharp increase in subsidised steel imports” was a threat to the industry’s expensive plans to decarbonise and produce so-called green steel using hydrogen and electricity rather than gas.
The restructuring plans at Thyssenkrupp Steel come as its parent conglomerate Thyssenkrupp attempts to convince Czech billionaire Daniel Křetínský’s EP Corporate Group to raise its 20 per cent stake in the steelmaker to 50 per cent.
The talks have been complicated by infighting at the group over the cost associated with the division’s decarbonisation plans amid the sale to Křetínský — a contentious process that in August prompted seven directors, including the steel chief, to resign in protest.
The steelmaker said EP was supportive of the restructuring plans.
Trade union IG Metall welcomed Thyssenkrupp’s commitment to its plans to replace two of its blast furnaces with a direct reduction plant, which will enable the company to produce less carbon-intensive steel.
Jürgen Kerner, deputy chair of IG Metall who sits on Thyssenkrupp’s supervisory board, said that while the company faced a serious situation, its restructuring plans amounted to “a declaration of war on the workforce”.
In a string of writedowns over the past two years, the most recent of which came this month, Thyssenkrupp has cut the value of its steel unit by €3bn.
https://www.ft.com/content/0b398c57-934e-4736-9a4b-10506e70a4bf
