Thyssenkrupp boss Martina Merz has set employees and shareholders of the troubled German steel and industrial group on a tough and multi-year restructuring course. A “tough restructuring” was necessary in the steel sector, said Merz at the general meeting in Bochum. “It won’t work without job cuts.”
Thyssenkrupp plans to cut 6,000 jobs across the Group. There are already agreements with employee representatives for 2,300 jobs, as Oliver Burkhard, Chief Human Resources Officer, said. It will take “two to three years” for the corporate restructuring to lead to better business figures, said Merz. First of all, the numbers would probably get even worse because of the renovation costs.
The former industrial icon Thyssenkrupp had become more and more a sick group from the Ruhr in recent years. After billion dollar investments in America, a series of antitrust penalties, the crash on the stock exchange and the dismissal from the leading index DAX, the group stands with its back against the wall, shareholder representatives complained. There was talk of a “lesson on management failure” and “management chaos” on the executive floor. The former “lighthouse of the German economy” now resembles “an excavation pit that is under water”.
Thyssenkrupp has seen a record-breaking change at the top of the company in the past two years. In January 2018, the CEO was still Heinrich Hiesinger and spread confidence at the Annual General Meeting. A year later, Guido Kerkhoff stood in front of the shareholders. The situation had not improved, and optimism remained.
Another twelve months later, the CEO is Martina Merz. On Friday, she said, “If we see each other again in a year, we will take the ship to calmer waters and pick up speed.” Then possibly with the fourth CEO or the fourth boss in three years. After all, Merz wants to return to the supervisory board after a year as interim head and take over the chair again.
The shareholders were angry with the high costs of the constant change of managers. In view of the announced mass relief, it is “simply not tolerable” that Kerkhoff was able to leave with a severance payment of 6.1 million after just one year as CEO, said Ingo Speich of the fund company Deka Investment.
Hendrik Schmidt from the asset manager DWS criticized the fact that Merz also waved millions of euros for just one year as CEO. The remuneration for Merz is “fair”, criticized the supervisory board chairman Siegfried Russwurm. You took responsibility in a very difficult situation. Overall, Merz found out at the Outlander Court that the shareholders were holding back from the previous management, but it got off lightly. There was applause for demands that the engineer should stay on board longer as chief executive.
Merz relies on its IPO or sale of Thyssenkrupp’s profitable elevator division in its restructuring efforts. The money is necessary to make Thyssenkrupp maneuverable again. The present offerings showed that investors valued the elevator division’s value at more than 15 billion euros, she said. That is double the current market value of the entire group. A shareholder representative warned that the elevator division was the “last lifeline” for the group.
The CEO did not reveal where the journey for the approximately 53,000 employees in the elevator division should go. Each option brings Thyssenkrupp capital in the billions and enables a “real restart”. The group plans to use the money to reduce debt and for investments. The steel division is to receive more money, which, contrary to earlier plans, will once again become the Group’s core business. (Dpa / apa / red)
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