Thyssenkrupp's newly appointed steel division leader discloses plans for employee reductions.
The situation at Thyssenkrupp's steel division has hit rock bottom, according to the division's new head, Dennis Grimm. This could mean even deeper cuts than initially expected, which translates to potential job losses.
Grimm addressed the situation to the West German General Newspaper, stating, "Tough times call for tough measures. We need to boost our profits." Grimm further elaborated, "The current market conditions have taken a turn for the worse lately, and there's no indication of recovery anytime soon." Thyssenkrupp Steel must adapt to these circumstances.
The impending cuts at Thyssenkrupp Steel could be more severe than initially anticipated. Grimm revealed that a new "business strategy" is currently in the works. "A significant portion of this strategy revision involves determining our future operational structure," Grimm explained. "We need to streamline the company for better performance – right now." Grimm, however, did not disclose exact job loss figures. "We can't provide a precise figure on the number of employees we'll retain once we complete the strategy and negotiate with employee representatives. But let me be clear – it'll be fewer than we have now," Grimm stated.
Grimm succeeded Bernhard Osburg, who stepped down due to disagreements with CEO Miguel Lopez over the steel division's future. Lopez is advocating for reduced production capacities due to weak demand and outsourcing the steel business to a 50:50 joint venture with Czech billionaire Daniel Kretinsky's energy holding. Employee representatives express concerns over potential job losses in the thousands.
Major Overhaul
Thyssenkrupp Steel workers are grappling with weak demand, particularly within the automotive industry, high energy costs, and fierce competition from the Far East. The company is conducting a thorough review of each individual business to determine whether they will be further developed within or outside the company. "Consequently, we consistently assess and evaluate the development potential of all business units in light of their future prospects that would benefit all stakeholders," the company explained on Friday. The portfolio strategy remains unchanged.
Plans for the division's independence are as well-known as those for the marine business, where partnerships with financial investors and the state are being explored. Other segments, including Automotive Technology, may also undergo changes through partnerships and portfolio activities if deemed beneficial.
The ongoing struggles in the steel industry, as seen at Thyssenkrupp, are causing significant concern. Grimm mentioned that Thyssenkrupp Steel needs to adopt a new business strategy, which could involve significant changes to their operational structure and potentially lead to job losses.
