The figures were expected. And yet, the scale of the dive into red is dizzying. The German conglomerate ThyssenKrupp announced, during the publication of its annual results on Thursday, November 19, an abysmal loss of 5.5 billion euros for its 2019-2020 financial year, which ended on September 30. It is by far the most important in the history of the group. In Essen (North Rhine-Westphalia), headquarters of the steel and industrial group with a bicentenary history, 5,000 additional jobs are planned to be cut, in addition to the 6,000 already announced in May 2019. That is one in ten.
These dramatic announcements come when the group was hoping to finally get its head out of the water, after years of crisis. In early 2020, ThyssenKrupp managed to sell the conglomerate’s only pearl, the very profitable elevator division, for the tidy sum of 17.2 billion euros, much more than expected. Thanks to the exceptional proceeds of this sale, the group thought it would take a new start, where steel should occupy a central place in the strategy. The proceeds from the sale of the elevators had made it possible to pay off debts and strengthen the conglomerate’s equity.
But the Covid-19 pandemic has swept everything away. The crisis hit the steel production of the Ruhr’s blast furnaces hard. The operating loss amounted to 1.6 billion euros, including 1 billion for the steel branch alone; Another 260 million were swallowed up in the crisis in the automotive subcontracting department. Added to this are asset write-downs. The net result was only positive – at 9.6 billion euros – thanks to the billions inherited from the sale of elevators. No other way out, in a very uncertain global environment, than to cut further in the workforce, believe the leaders of the group. The monumental social plan could include, for the first time, dry layoffs, a taboo in a conglomerate where the union sees itself as the repository of the memory of the first German workers’ struggles a century ago.
“The next steps could be more painful”
“We have not yet arrived where we should be”, explained Martina Merz, chairman of the group’s executive board. “The next steps could be even more painful than those already accomplished. “ Appointed in October 2019, Martina Merz has taken on the heavy burden of tidying up the rubble left by her predecessors. The bosses Heinrich Hiesinger and Guido Kerkhoff had resigned in quick succession a year apart, leaving the group in strategic and governance uncertainty. In June 2019, the European Commission rejected the hoped-for merger with the Indian group Tata. To believe Mme Merz, ThyssenKrupp would not have hit rock bottom yet.
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