Thyssenkrupp Steel Division's Overhaul: Job Cuts and Social Plan
ThyssenKrupp Steel Division Plans to Implement a Social Plan While Maintaining Its Position on Job Reductions - Thyssenkrupp Steel Sector Proposing Social Plan and Preserves Job Reduction Strategy
The German industrial titan, Thyssenkrupp, facing financial strife in its steel division, has decided to slash thousands of jobs in a bid to revamp its operations. Dirk Schulte, the bigwig behind the decision, recently spoke with WAZ about the gravity of the matter, justifying the decision by pointing to underused facilities running full throttle and the division's steep production costs compared to competitors [1].
A total of 5,000 jobs are axed, with another 6,000 outsourced. But the real action lies in the social plan's focus on helping workers transition to new roles [1]. Discussions with the IG Metall union — the industry's powerful German labor union — are imminent.
Previous negotiations with the union, back in early May, resulted in a preliminary agreement. The goal back then was to secure employment, strategic locations, and the necessary investments for a green transformation, avoiding dismissed employees due to operational reasons [2].
Thyssenkrupp's steel division has been battling financial gaps, elevated production costs, and fierce competition from overseas, compelling the conglomerate to sell its steel subsidiary [1]. The EP Group, led by Czech businessman Daniel Kretinsky, has secured a 20% stake in the steel subsidiary, aiming to acquire an additional 30% [3].
Breaking Down the Storm
- Thyssenkrupp's Steel Struggles: The steel division has encountered numerous challenges, such as financial hardships, falling steel prices, and relentless competition, impacting its profitability and prompting massive restructuring efforts [1].
- The Competitive Edge: Asian companies are posting lower prices, putting pressure on Thyssenkrupp to cut costs and streamline its operations [1].
Reshaping the Future: Joint Ventures and Negotiations
- Imminent Job Cuts: Thyssenkrupp has already announced potential job losses in headquarters and administrative roles [3].
- The EPCG Partnership: Thyssenkrupp has formed a 50-50 joint venture with EP Corporate Group (EPCG) for its steel division, aiming to create a more efficient and competitive entity [3].
The IG Metall union is actively working with the company to ensure job security and future prospects. They're working out the details of a "social contract" that could lay the groundwork for the division's future transformation into a holding company with independent business segments [2].
In essence, Thyssenkrupp's objective is to revamp its steel division, slash jobs, and forge ahead with negotiations to ensure a semblance of stability for employees while making the division more competitive and sustainable.
- To mitigate the job losses and facilitate a smooth transition for affected employees, Thyssenkrupp is considering vocational training programs as per the community policy within the scope of the social plan.
- As part of the discussions with the IG Metall union, the possibility of providing financial aid for workers seeking vocational training in related business sectors could be an integral part of the finalized agreement.
