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Tata Steel's Dutch labor deal draws ire from German union

The planned merger of ThyssenKrupp AG and Tata Steel Ltd.'s European operations faces another challenge, as German unions are opposing Tata Steel's February labor agreement with the Tata Steel IJmuiden BV unit in the Netherlands, Reuters reported March 29, citing Markus Grolms, trade union secretary at the IG Metall union.

"Should the agreement for the Netherlands remain in place we will demand the same for us," said Grolms, who is also vice chairman of ThyssenKrupp's supervisory board.

Tata Steel guaranteed in the agreement that its Netherlands-based division could continue to operate as an independent company under the tie-up, with control over its own profits and an independent supervisory board.

"It is not acceptable that only we in Germany are to be responsible for the risks of the joint venture and the Dutch entity is dodging responsibility," Thyssenkrupp supervisory board member Tekin Nasikkol recently told Reuters.

In September 2017, Tata Steel and ThyssenKrupp announced plans to create a 50/50 steel joint venture by combining the companies' European steel operations.

The proposed joint venture will include the two companies' flat steel businesses and ThyssenKrupp's steel mill services.

The proposed venture was estimated to have a turnover of about €15 billion per year.