thyssenkrupp AG's steel unit is undergoing significant changes as it plans to sell its 50% stake in Hüttenwerke Krupp Mannesmann, an industrial site located in Duisburg, Germany. This decision comes after a recent supervisory board meeting that ended without agreement on a broader restructuring strategy for the struggling division. With around 3,000 employees at the Duisburg factory, this move reflects thyssenkrupp's ongoing struggle to adapt to a challenging market environment.
The steel industry in Europe has faced numerous challenges in recent years, including declining demand and increasing pressure to reduce emissions. thyssenkrupp Steel Europe AG is actively seeking to lower its steelmaking capacity to navigate these difficulties. In April, the company announced plans to reduce its steel production by approximately 20%, which would also involve significant job cuts among its 26,000 workers. This restructuring is part of a broader effort to offload the steel unit, which has been a financial burden on thyssenkrupp for years.
During the supervisory board meeting, labor representatives expressed concerns over proposals that included further capacity reductions and additional job losses. The board ultimately decided to await an independent expert report detailing future financing needs before making any final decisions. The situation is tense, as the board acknowledged that the challenges facing thyssenkrupp Steel are substantial, indicating that the restructuring process may take longer than anticipated.
In light of these developments, the board expects to finalize details of a financing deal for the steel unit by August 20, with further discussions planned for a subsequent meeting on August 29. The company's leadership is under pressure from investors to restructure the steel division, which has been weighed down by significant pension liabilities and ongoing operational losses.
thyssenkrupp's recent efforts to sell a 20% stake in the steel unit to Czech billionaire Daniel Kretinsky's EP Corporate Group are part of a strategy to attract new investment and ensure the unit's viability. Kretinsky is reportedly in talks to acquire an additional 30% stake, which could provide much-needed capital for the struggling division. However, the uncertainty surrounding the restructuring process has left many employees and stakeholders anxious about the future.
