SHARE
COPY LINK

THYSSENKRUPP

‘Not on my watch’: Main Thyssenkrupp shareholder opposes group break-up

German industrial giant Thyssenkrupp's biggest shareholder on Friday strongly opposed calls by activist investors to break up the venerable institution, as it battles through a leadership crisis.

'Not on my watch': Main Thyssenkrupp shareholder opposes group break-up
Photo: DPA

“There will be no break-up of the company on my watch,” Ursula Gather told German news weekly Der Spiegel.

“Job security” and “the principles of the social market economy” took precedence over a desire by some to cash in, she said.

Gather heads the Krupp Foundation, Thyssenkrupp’s largest and most influential shareholder with a 21-percent stake in the sprawling group that makes everything from elevators and submarines to car components.

The 207-year-old firm has been in turmoil ever since two bosses quit after clashing with investors pushing for an aggressive restructuring, including the spin-off of the most profitable units.

Chief executive Heinrich Hiesinger quit in early July, shortly after completing a landmark deal merging Thyssenkrupp’s steel activities with India’s Tata.

Ursula Gather and Ulrich Lehner. Photo: AFP

Supervisory board chief Ulrich Lehner followed him out the door soon after, warning of the “loss of many jobs” if shareholders like Swedish investment firm Cevian and the US hedge fund Elliott got their way.

Union leaders and the German government have also spoken out against attempts to break up Thyssenkrupp, which employs some 159,000 people worldwide and reported revenues of 41.5 billion euros ($48.4 billion) in its 2016-2017 financial year.

“The government is counting on Thyssenkrupp remaining an integrated industrial group,” an economy ministry spokeswoman said this month, urging all sides to work “constructively” towards a solution. 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

STEEL

German steel giant rejects ‘high cost’ state support

German industrial giant Thyssenkrupp on Friday rejected state participation to support it during the pandemic, an option favoured by unions but judged too costly by management.

German steel giant rejects 'high cost' state support
Thyssenkrupp's offices in Duisberg. Photo: Ina Fassbender / dpa / AFP
“State participation off the table,” Klaus Keysberg, the group's financial director, told the German daily Rheinische Post on Friday.
   
Keysberg blamed “high costs” in the long term of government assistance, “due to the interest payments and the terms of repayment.”
   
Already weakened by years of cut-price competition from China in the steel industry, Thyssenkrupp has further struggled with the effects of the pandemic that caused business activity to plunge.
   
The company said in mid-November it would cut an additional 5,000 jobs as part of its restructuring plan, bringing the total to nearly 11,000, to be spread out over several years.
 
   
Thyssenkrupp chief executive Martina Merz has not ruled out state assistance.
   
The powerful IG Metall union had organised rallies in October to demand a rescue plan from Berlin.
   
But the government was never enthusiastic, despite their acquisition of stakes in the airline Lufthansa and tour operator TUI, which also had business ravaged by Covid-19.
   
“I don't believe that nationalisation is the right response at the moment,” Germany's Economy Minister Peter Altmaier said in October on Thyssenkrupp.   
 
But national and regional governments favour more traditional aid structures, such as subsidies, or moves to convert to production of so-called green steel.
   
Discussions will continue to find alternatives.
   
A takeover of Thyssenkrupp's steel activities is still on the cards. British steel giant Liberty, founded by industrialist Sanjeev Gupta, launched a takeover bid in October.
   
Discussions are also underway with Sweden's SSAB and India's Tata Steel.
   
An alliance with fellow German steelmaker Salzgitter to create a national steel champion is also being considered. But these options won't be decided until “spring 2021”, Thyssenkrupp said.
SHOW COMMENTS