Thyssenkrupp: New battleground over German industrial jobs – DW – 12/11/2024

“It breaks my heart! You can’t treat people this way. We’ve worked so hard for Thyssenkrupp,” said Helmut Renk, the 62-year-old works council chairman of the steelmaker’s facility in Kreuztal-Eichen, Germany. 

Venting his anger and frustration about the plant’s likely closure, he adds that he’s been working there for 40 years — just like his father before and his son now.

Renk’s hard feelings are currently shared by many employees of the German steel giant, argues trade union official Ulrike Hölter. Representing the central Ruhr Valley branch of the IG Metall metalworkers’ union, Hölter says the steelworkers are especially angry with management, and anxious about their own future.

The imminent dismissal of the 500 steelworkers in Kreuztal-Eichen, she is convinced, will not only reverberate in the small town in western Germany, but will be felt throughout the entire country.

What is Thyssenkrupp planning?

In late November, Thyssenkrupp Steel Europe (TKSE), said it would eliminate 11,000 jobs in total — 5,000 of which would be axed by 2030 and another 6,000 shed through spin-offs or divestitures. The job cuts amount to about 40% of its total German workforce of 27,000.

The Kreuztal-Eichen plant, which specializes in processing steel, is slated for complete closure.

TKSE also announced it will reduce its overall steel production capacity from 11.5 million tons to just under 9 million tons by divesting its stake in Hüttenwerke Krupp Mannesmann (HKM) in Duisburg, Germany.

Although if that sale is not achievable, TKSE has said it would hold talks with other shareholders about closure scenarios. Additionally, a plant in Bochum is now set to shut down by 2027 — three years earlier than previously planned.

“Urgent measures are required to improve Thyssenkrupp Steel’s own productivity and operating efficiency, and to achieve a competitive cost level,” the company said in a statement.

The goal is to reduce personnel costs by some 10% on average in the coming years. 

Why is Thyssenkrupp struggling?

TKSE, which is the steelmaking unit of the Thyssenkrupp industrial conglomerate, is the largest steel producer in Germany. The company faces increasing overcapacity and intense competition from cheaper steel imports from Asia. Additionally, Germany’s all-important automotive industry is struggling amid a transition to electric vehicles, which has led to reduced demand for steel.

Moreover, the current government of Chancellor Olaf Scholz has attempted the make steel production in Germany less polluting, singling out TKSE as a landmark project for the world’s first hydrogen-powered blast furnaces in Duisburg. However, it remains unclear if the billions in state subsidies for so-called green steel produced without carbon emissions will ever pay off.

Plus in August, several members of TKSE’s supervisory board resigned, accusing the leadership of failing to invest adequately in the steel division to maintain its competitiveness.

Gerhard Bosch from the University of Duisburg-Essen also blames “insufficient investment” for part of the crisis. “Thyssenkrupp Steel has quality and investment issues resulting from poor business decisions,” he told DW.

In the throes of change

Gerhard Bosch, who is a former member of Thyssenkrupp’s supervisory board, thinks the company’s crisis is likely to spill over into countless jobs beyond its own workforce as every steelmaking job “typically supports at least one other job” along the supply chain in Germany.

The Ruhr Valley region was once Germany’s industrial heartland with numerous coal mines and steel mills centered around the towns of Duisburg and Essen. After the last coal mine closed in 2018, an era came to an end leaving deep scars and the region economically depressed.

Unemployment there is still higher than in the rest of Germany, says Gerhard Bosch, and the loss of the steel jobs “will hit Duisburg especially hard.”

But the German steel industry is not the only industrial sector currently hit by massive disruption. Many more companies are planning to slash jobs, including automakers Volkswagen and Ford, and technology giant Bosch.

As Germany’s export-driven economy is experiencing reduced demand for its products on a global scale, it is expected to shrink for the second consecutive year, according to numerous forecasts.

Defiant labor unions vow to fight back

Meanwhile, German labor unions, especially the powerful IG Metall metalworkers’ union, are gearing up for a long battle to save threatened jobs.

Frank Patzelt, a rolling-mill worker and union member at TKSE in Bochum, says that while some colleagues feel hopeless, many are ready to fight.

“If we stick together, we can push for a better outcome for ourselves,” he told DW.

This article was originally written in German.