ThyssenKrupp-Tata steel merger sets scene for jobs battle
Germany’s Thyssenkrupp and Tata Steel of India signed a preliminary deal to merge the two companies’ European steel operations. Up to 2,000 administrative jobs and up to 2,000 jobs in production will likely be cut
GERMANY’S Thyssenkrupp and Tata Steel of India signed a preliminary deal yesterday to merge their European steel operations, a combination that could lead to up to 4,000 job cuts. The move to create Europe’s second-largest steel company is an effort to consolidate the industry, which has long struggled with excess capacity and competition, particularly from China. The two firms signed a memorandum of understanding to form a 50-50 joint venture. Negotiations about details are to be concluded in time for a formal signing of the transaction at the beginning of 2018, and the merger of the second- and third-biggest players in Europe will require approval from the companies’ boards and from antitrust authorities. The proposed merger, the result of talks first disclosed more than a year ago, would produce a company with revenue of about 15 billion euros ($18 billion) per year and, at present, some 48,000 employees at 34 locations. The companies expect to save between 400 million euros and deal, saying on Twitter that it “will strengthen the leading role of Tata Steel IJmuiden as one of the most efficient and sustainable steel mills in the world.” Officials in Germany, which holds an election on Sunday, responded more cautiously. Labor Minister Andrea Nahles said that sites in Germany must be maintained and compulsory layoffs ruled out, and that “there must not be a merger at any price.”
“It is important that, in the case of a merger, the company headquarters is in Germany” to preserve the current form of employee participation in company decisions, she added.
In Britain, Business Secretary Greg Clark said the announcement was an “important step” for the steel industry. Labor unions cautiously welcomed it.
“As always, the devil will be in the detail and we are seeking further assurances on jobs, investment and future production across the U.K. operations,” said Roy Rickhuss, the general secretary of the Community union.