Leaving Thyssenkrupp steel division to devise turnaround plan is 'unacceptable', union says

Credit: REUTERS/MICHAELA REHLE

DUESSELDORF, Germany, Feb 27 (Reuters) - IG Metall, Germany's largest union, warned Thyssenkrupp of taking shortcuts in its ongoing process to restructure and sell the group's steel division, saying it was "unacceptable" that the unit should devise its own turnaround plan.

The comments by Knut Giesler, who heads the union in Thyssenkrupp's home state of North-Rhine Westphalia, come a day after the steel unit's chair said a turnaround plan for the business was in the works and would be presented in April.

Neither production cuts nor layoffs could be ruled out, the chair said on Monday.

"It is not acceptable to place the problem solely with the management Board and co-determination of the steel division. We continue to stand by our demand that the steel division be made independent if the framework conditions are right," Giesler said in a statement.

He said these framework conditions needed to be created by parent Thyssenkrupp, alluding to efforts to secure a deal with Czech investor Daniel Kretinsky to make him a 50% co-owner of the steel division, a deal sources said may require making financial sacrifices.

Giesler said the business needed an industrial concept that was sound structurally as well as financially, a challenge given Thyssenkrupp steel's pension liabilities of around 3 billion euros ($3.3 billion).

"This constant back and forth must come to an end. Moreover, politicians must also be involved in finding solutions for these far-reaching changes and not just remain on the sidelines," Giesler said.

($1 = 0.9209 euros)

(Reporting by Tom Kaeckenhoff and Christoph Steitz; Editing by Susan Fenton)

((christoph.steitz@thomsonreuters.com; +49 30 220 133 647;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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