New York — Thyssenkrupp is still seeking partners for steel consolidation, the German company's CEO Martina Merz said at the annual general meeting Friday, while facing criticism from shareholders on restructuring and strategy.
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Merz said that alliances with competitors could be the solution for finance injections and would bring an end to the "restructuring spiral of recent years".
"That's why we continue to support the idea of consolidation. Alliances can offer added value. That's why we are open to discussions," she said.
There have been reports that Merz had met with German steelmaker Salzgitter CEO Heinz Joerg Fuhrmann to talk about consolidation. Salzgitter confirmed that they had met, but said that meeting was social.
Restructuring of the steel division would also not be possible without losses of up to 2,000 jobs according to Merz, highlighting that management was already in talks with employee representatives.
Current cash flow problems at Thyssenkrupp would be alleviated by the sale of the elevator division and more details on the restructuring strategy would be given in May.
Merz also said that alliances and consolidation would also be needed to transform the industry to being carbon neutral and that there should be cooperation with policy makers.
In the last business year 2018-19, Thyssenkrupp reported a net income loss of Eur260 million ($287 million) having had a troubled year with a fall in the steel price, the collapse of the Tata- Thyssenkrupp merger, the exit from the German DAX stock index and several management changes.
The plans were met with criticism from shareholder representatives.
Ingo Speich of Deka Investment said that Thyssenkrupp had lost credibility on the capital markets due to management changes and bad decisions.
"Profits and cash flow are burning faster than iron ore in the blast furnace," he said.
Steel would be "a shadow of its former glory" and the result would be auto customers switching to competitors.
Board member Klaus Keysberg replied that Thyssenkrupp would be focusing on higher-margin products in the future and invest an additional Eur800 million in the steel division over the next six years.
Thyssenkrupp will also invest in direct reduced iron plants in mid-2020. The plants will operate on the basis of hydrogenous gases and produce DRI rather than molten pig iron, which will be melted in existing blast furnaces, according to the company website.