Thyssenkrupp's steel division imposes significant layoffs for employees
In a bid to secure the future viability of the company, Thyssenkrupp Steel Europe has reached a collective bargaining agreement with IG Metall, the German metalworkers' union, that will last until 2030. The agreement, which is still pending the approval of IG Metall members at Thyssenkrupp Steel, comes as the company grapples with economic weakness, high energy prices, and cheap Asian imports.
The agreement, while controversial, marks a significant step towards restructuring the company. Thyssenkrupp Steel aims to reduce its capacities significantly, with plans to shed a total of 11,000 jobs, leaving 16,000 employees. These job cuts will be achieved through a combination of direct layoffs and outsourcing.
The union and works council have acknowledged the "extremely strained" economic situation at Thyssenkrupp Steel and have accepted the need for restructuring. However, they advocate for the job losses and wage reductions to be negotiated in a "socially acceptable" manner.
The agreement includes tough wage-related austerity measures over an initial four-year period, with Thyssenkrupp demanding €200 million in annual savings. These measures include the elimination of all one-off payments such as Christmas and holiday bonuses, scrapping long-service bonuses, and instituting a pay freeze in upcoming collective bargaining rounds.
Despite the job cuts and austerity measures, the agreement includes guarantees for sites and investments in facilities, and there are no dismissals due to operational reasons. The company aims to achieve a competitive cost level by reducing excess capacities and improving efficiency.
Weekly working hours will be reduced from up to 34 hours to 32.5 hours. The site in Bochum is set to close in 2028. Plans to close a plant in Kreuztal-Eichen (NRW) have been temporarily suspended.
CEO Marie Jaroni considers the agreement an important milestone for the future viability of Thyssenkrupp Steel. The reduction in the "poison list" of drastic savings plans from management indicates a less drastic cost-cutting approach. Knut Giesler, the district leader of IG Metall NRW, described the agreement as a sustainable compromise with painful elements for both sides.
Thyssenkrupp, the parent company, must secure the financing for the agreement. The approval of Thyssenkrupp's financing is necessary for the agreement to be finalized. The latest updates on Thyssenkrupp Steel Europe's austerity measures, job cuts, and the rescue collective bargaining agreement are a testament to the company's efforts to navigate the challenging market environment faced by the German steel industry.
The agreement, while challenging for employees due to austerity measures and job cuts, is a significant financial step for Thyssenkrupp Steel Europe towards restructuring the business. Thyssenkrupp must secure financing for the agreement to be finalized, demonstrating the company's continued focus on financial stability in the challenging steel industry market.
