German heavy industry giant ThyssenKrupp AG and Indian group Tata yesterday agreed to merge their steel operations in Europe, sending governments and unions scrambling to ward off job cuts.
Once the deal is finalized next year, the two groups aim for efficiency savings of between 400 and 600 million euros (US$480 to US$720 million) per year — and are likely to shed 4,000 jobs in production and administration.
The combination would create Europe’s second-largest steelmaker after ArcelorMittal SA, expected to produce about 21 million tonnes of steel per year for sales of 15 billion euros.
Photo: AP
The two sides plan a 50-50 joint venture, named “ThyssenKrupp Tata Steel,” as a holding company in the Netherlands with joint management that will employ about 48,000 people across 34 sites.
“We will not be putting any measures into effect in the joint venture that we would not have had to adopt on our own,” ThyssenKrupp chief executive Heinrich Hiesinger said in a statement.
“The steel industry has faced massive challenges in Europe for many years,” said the conglomerate, whose products range from lifts to car parts and submarines.
“Steel demand is characterized by a lack of dynamic. There is structural overcapacity in supply and constantly high import pressure,” it said.
This meant that various stages in the value chain were operating well below capacity.
Unless industry players took action, ThyssenKrupp said, major steel assets would come “under threat of closure in the medium term.”
The “declaration of intent” signed between the two groups must still be approved by competition authorities.
Worker representatives in Germany, where ThyssenKrupp employs about 27,000 people in its steel division, were quick to voice fears over the planned tie-up.
“The board has bet everything on a single card in the face of all the warnings,” works council chief Guenter Back told Deutsche Presse-Agentur, adding that “significantly more” job cuts would likely follow those announced yesterday.
Trade unions at ThyssenKrupp have for months been fearing news of job losses, enlisting help from Berlin to put pressure on the firm.
The jobs tussle is set to intensify this weekend, as ThyssenKrupp must submit the proposal to its supervisory board — where worker representatives hold half of the seats — for approval.
However, British Secretary of State for Business, Energy and Industrial Strategy Greg Clark hailed an “important step” for Britain’s steel industry.
London hopes the deal will secure the future of Tata Steel Ltd’s 4,000-strong site at Port Talbot in Wales, which sits at the heart of the local economy.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS