thyssenkrupp shares close in red: Works council demands early steel directional decision – Steel division plans short-time work due to the consequences of the war

“We expect Essen to make a clear decision this year,” said Tekin Nasikkol, head of the works council responsible for the Duisburg subsidiary. “Doing nothing is not an option. Waiting isn’t an option either. I demand clarity for steel.” The course for this would have to be set at the next scheduled meeting of the Supervisory Board on March 24th.

A few days ago, thyssenkrupp boss Martina Merz dropped the goal of a balanced free cash flow with reference to the losses in the steel business that are expected there as a result of the Ukraine war. The very sharp increase in raw material and energy costs is causing the group a lot of trouble, and the automotive industry is also reducing the demand for steel due to problems with the supply chain.

Against this background, Merz also questioned the planned spin-off of thyssenkrupp Steel: A statement on the feasibility is not possible given the current economic conditions, she explained.

Nasikkol demanded that the promised investments in climate-neutral steel production had to be implemented, otherwise the company would fall behind. He also held the federal government responsible. By Easter, the traffic light coalition must “put a package of measures in place that noticeably relieves consumers and companies, especially energy-intensive industries.” It shouldn’t be the case that steelworks have to shut down their factories because of high energy and raw material prices.

A solution has been sought for the cyclical steel division for several years. Neither a merger with Tata Steel nor a takeover by Liberty Steel came about. For the past year, the Executive Board has been examining the conditions under which thyssenkrupp Steel could be a solution as an independent company with access to the stock exchange.

thyssenkrupp steel division plans short-time work due to the consequences of the war

According to a media report, the works council is opting for short-time work in order to avoid job cuts in the thyssenkrupp steel mills in view of the Ukraine war. An agreement has been reached with the board on the subject of short-time work, said the head of the thyssenkrupp Steel works council, Tekin Nasikkol, of the “Westdeutsche Allgemeine Zeitung” (WAZ, Saturday). The agreement will be up for decision in the employee committee on March 25.

Short-time work will come in April, “but not immediately,” Nasikkol told the newspaper. The agreement applies to around 17,000 employees at thyssenkrupp Steel. Excluded are subsidiaries, including Electrical Steel in Gelsenkirchen and the Rasselstein and Hohenlimburg locations.

thyssenkrupp Steel confirmed the agreement and described it as an important signal to employees: “We are giving stability and securing jobs,” said a statement. “Even in this extraordinary situation, we are showing that we act quickly, responsibly and flexibly.”

According to Nasikkol, the planned agreement provides for the company to increase the short-time work allowance to 85 percent of the salary in the first three months and then to 90 percent. In addition, the employees are to receive a daily flat rate. The flat rate should be 10 euros in the first ten days and then 15 euros.

It is not yet clear how many employees at thyssenkrupp Steel will be on short-time work, said the head of the general works council. The exam is still running. How long short-time work will be necessary in view of the war in Ukraine cannot be answered seriously at the moment.

The steel and industrial group thyssenkrupp announced on Wednesday evening that it expects the war in Ukraine to “impair business development”. It can be assumed that the global disruptions at various points in the supply chain will have consequences, especially for the group’s steel and automotive supply businesses. According to the company, countervailing developments in the materials trading business, which is benefiting from rising commodity and material prices, and countermeasures that have been initiated will not fully compensate for the burdens.

The thyssenkrupp share recently lost 1.94 percent to 8.37 euros in XETRA trading.

FRANKFURT (Dow Jones) / DUISBURG/ESSEN (dpa-AFX)

Image sources: thyssenkrupp AG, Quinta / Shutterstock.com