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Thyssenkrupp to partly shut down European steel ops, eyes €500M cost cuts


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Thyssenkrupp to partly shut down European steel ops, eyes €500M cost cuts

ThyssenKrupp AG is planning to shut down parts of some production facilities at its European steel business, Reuters reported April 7.

The company said it is not clear how many jobs will be affected, as the German group plans to reduce costs by €500 million over three years within the steel unit.

The company plans to implement cost efficiency in areas such as personnel, maintenance and repair, logistics, sales and administration at the unit, which it is looking to merge with Tata Steel Ltd.'s European operation.

According to the works council head of the steel business of ThyssenKrupp, Guenter Back, the immediate closure of two facilities in Germany's Bochum and Duisburg is expected to result in about 350 job losses.

The steel operation has been under pressure from cheap imports and industry overcapacity, and has already cut costs by more than €600 million as part of a restructuring program that ended about a year ago.

CEO Heinrich Hiesinger said restructuring is the "only way" to keep the company competitive without consolidation.

Back said the company management has planned further cuts, adding that the council will fight for every job.

The company was reportedly considering splitting its European steel business into a separate company that could be taken public if its planned merger with Tata Steel assets falls through, Reuters reported in March.

In September 2016, the company said it was setting up a task force to discuss with workers potential restructuring measures, such as cost cuts and site closures.