25 years of Thyssenkrupp: The steel company that was forged with “Wild West manners”.

25 years of Thyssenkrupp
The steel company that was forged with “Wild West manners.”

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The plan initially caused a scandal – and even 25 years later, the merger of the traditional German companies Krupp-Hoesch and Thyssen is anything but a success story. The next debate about the future of steel production in the Ruhr area is already coming up.

With the attempt at a “hostile takeover” something that had previously been unimaginable for many began: On the evening of March 17, 1997, it became known that the traditional steel group Krupp-Hoesch wanted to take over the industry leader Thyssen. The Thyssen management itself makes this public – and leaves no doubt about its rejection: it is an “incomprehensible process”. There is talk of “Wild West manners” that are completely unacceptable. After a few twists and turns and obstacles, things turn out differently: exactly two years later, the merged Thyssen Krupp AG is entered in the commercial register.

The idea of ​​a merger was initially met with strong rejection by the employees of both companies. Tens of thousands of jobs are at risk, the Thyssen board wrote in a letter to employees the following day, thus mobilizing the workforce. Thousands of steel workers from both companies then set off for the Krupp headquarters in Essen. Krupp boss Gerhard Cromme, on the other hand, speaks of “pure scaremongering” – and is pelted with eggs by angry workers. “We won’t let ourselves be sold off,” says a trade unionist. “It’s not about the wallet or charity, it’s simply about our asses.” Thyssen boss Dieter Vogel initially does not want to speak to Cromme.

Politicians are alarmed: a joint cabinet meeting of the governments of Brandenburg and North Rhine-Westphalia scheduled for that day is canceled without further ado. North Rhine-Westphalia’s Prime Minister Johannes Rau explains that the state government “can under no circumstances condone such a hostile takeover.” A few days later, Chancellor Helmut Kohl called on the management of both companies to find a solution in the interests of the employees and the economic and social climate in the country. Numerous employees continued to protest and organize vigils on the following days.

The companies then find each other. In a first step, the steel divisions suffering from sales difficulties, and later the entire groups, merge. The employee representatives played an important role in this, emphasizes the chairman of the group works council, Tekin Nasikkol. “Our industrial action and our solidarity have paved the way to a friendly merger,” he said on the occasion of the anniversary.

Relegation from the DAX

After complaints from several shareholders, the merger can only actually be entered in the commercial register six months after the merger agreement was signed – retroactively to October 1, 1998. The new group will have 174,600 employees and a turnover of 67 billion marks (34 billion euros). Begin. After the merger, a dual leadership consisting of Cromme and Thyssen manager Ekkehard Schulz was at the helm of the group for two and a half years. After Cromme moved to the top of the supervisory board, steel expert Schulz is alone at the helm.

A lot has happened since then, especially in the steel division, which is heavily dependent on the economy and is slipping from one crisis to the next: plans to go public in this division are canceled again, and bad investments in new steel plants in Brazil and the USA cost billions. A merger of the steel division with the Indian competitor Tata fails. A planned sale to Liberty Steel is later canceled. The decline from the leading index of the German stock market, the DAX, in 2019 documents the loss of importance of the industrial conglomerate. Thyssenkrupp shares are now worth about a quarter of what they were at the time of the merger. Thyssenkrupp will gain breathing room in 2020 by selling the elevator division with more than 50,000 employees. The group will receive more than 17 billion euros for this.

The group is currently also active in the areas of auto parts, materials, military shipbuilding and, more recently, decarbonization technologies. The steel and military shipbuilding divisions are to be made independent. At the same time, steel production should be converted towards climate neutrality. To this end, the classic blast furnaces are to be gradually replaced by more environmentally friendly systems. Hydrogen produced in a climate-neutral manner should be used and no more coke.

Green transformation

In the new “Decarbon Technologies” division, Thyssenkrupp has bundled its technologies for CO2 reduction, such as the plant manufacturer Nucera, which offers electrolyzers for hydrogen production. Thyssenkrupp has high hopes for the issue of climate neutrality: “With the climate-neutral transformation of global industry, we are aligning the company with climate-friendly technologies and making Thyssenkrupp a pioneer of green transformation,” explains CEO Miguel López. The group’s largest individual shareholder is still the Krupp Foundation with a shareholding of around 21 percent. In the 2022/2023 financial year, sales were 37.5 billion euros.

López has been in charge of the company since June, which is under great pressure, especially due to the economic downturn. The manager wants to get the group “back on track” and ensure profitable growth. “In the future, we will have to offer you more than a minimal return and an unsatisfactory share price,” he told shareholders at the annual general meeting at the beginning of February. The future of the steel division, which is under sales and price pressure, is once again in focus. Of the company’s current 100,000 employees, 27,000 work in the steel division, around 13,000 of them in Duisburg alone.

Steel supervisory board chairman Sigmar Gabriel recently announced proposals from the board for a fundamental restructuring in mid-April in an interview with the “Westdeutsche Allgemeine Zeitung”. The background is permanent declines in sales. If capacity is adjusted, a reduction in employment cannot be ruled out. IG Metall and the works council are skeptical. The board’s announced plan will be examined “very closely – very carefully and critically,” it said in a recent leaflet. They don’t want to watch “as steel is shrunk down to size or broken down”. There will be a joint works meeting of all steel locations in Duisburg on April 30th.

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