[Article publié le 25 novembre 2024 à 14h21, mis à jour à 16h01] Thyssenkrupp will eliminate or outsource 11,000 positions in its steel branch by 2030, the group announced on Monday. And for good reason: the industrial conglomerate is facing growing difficulties linked to competition from Chinese steel and excessively high costs.
In this division which is suffering a series of losses, around 5,000 jobs will be eliminated while 6,000 will be outsourced, announces a press release from the company. Or more than 11% of its total workforce. Thyssenkrupp adds that it wants to reduce salary costs by 10% on average in the coming years, in order to “adapt to a competitive level”. “We want to succeed in the reorganization of steel if possible without economic layoffs”CEO Miguel Lopez repeated last week during the annual results conference.
In its press release this Monday, Thyssenkrupp assures that these measures are “necessary to improve productivity and operational efficiency” of its steel subsidiary Thyssenkrupp Steel“and to achieve a competitive cost level”.
This project is a “disaster for employees and industry in North Rhine-Westphalia”, cradle of the group in western Germany, reacted the powerful union IG Metall.
Plan d’action
The company also presented this Monday a plan to achieve recovery. Thus, steel production capacities will be reduced to a range between 8.7 and 9 million tonnes, compared to 11.5 million today. In addition, the Kreuztal-Eichen site (west of Germany), which employs 1,000 people according to the local press, will be closed.
At the same time, the group still intends to gradually separate from its subsidiary Thyssenkrupp Steel. This process was accelerated in May with the acquisition of 20% of the shares by businessman Daniel Kretinsky, via his holding company EPCG. And discussions are currently underway for it to recover an additional 30%, with the aim of creating an equally owned joint company.
Earlier on Monday, the conglomerate committed to financing this subsidiary for the next two years. He made this decision after an independent expert report concluded that “ positive prognosis for continuation » for the leading German steelmaker, assured the company in an email sent to AFP. The audit covers a period of 24 months.
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Thyssenkrupp wants to restructure its steel branch, a historic activity weighed down by rising energy costs and low-cost Chinese competition, in the context of a complex and costly energy transition. The group therefore asked the auditors to assess the sector's financing needs. “ The financing situation of the steel division is now clear », assures Thyssenkrupp today, while the contract which obliges the parent company to guarantee the financing of its subsidiaries had expired in September.
Turnover fell by 18%
At the beginning of 2025, Thyssenkrupp will receive the results of another expertise concerning the long-term financing of this subsidiary. Over the 2023/2024 financial year, the turnover of the steel branch fell by 18%, to 10.7 billion euros, worsening the group's annual loss which stood at 1.5 billion euros. euros.
The steel manufacturer must at the same time finance its costly decarbonization, a 3 billion euro project but the final bill could be higher. Finally, uA serious governance crisis also shook the division at the end of the summer, with the departure of his boss and several members of the board of directors in open war with Miguel Lopez.
Towards a return to balance in 2025?
Faced with these difficulties, Thyssenkrupp is banking on the development of clean steel produced using hydrogen from renewable energies. But the company needs massive investments to initiate this crucial transition, which could cost more than expected. The future of the group's 98,000 employees, including 27,000 in the steel industry, will depend on these projects.
The 2024/2025 financial year will be “ a year of transition on the financial level, and the year of decisions on the strategic level “, underlined the latter. The Essen group expects to come out of the red, with a net profit expected between 100 and 500 million euros next year. The conglomerate expects sales growth of up to 3%, thanks to a “ stabilization of demand in the second half » in suffering sectors.
While steel represents a third of the CO2 emissions of German industry, Thyssenkrupp still plans to inaugurate its production of green steel – using hydrogen produced by renewable energies – in 2027 at its Duisburg site, thanks to more than 2 billion euros in public subsidies. “ The installation may be more expensive than expected (…) but we assume that the installation can be carried out under current conditions », commented the CEO in mid-November while some consider this mega project threatened.
(With AFP)
