AAt the beginning of the year, the coronavirus still seemed far away, there was Thyssen-Krupp a few weeks in which there was something like a touch of “optimism”. The negotiations on the sale of the elevator business entered the final phase, more than 17 billion euros, much more than initially expected, should fill the empty corporate coffers. The biggest holes seemed to be plugged, and it was possible to plan for a new future. And steel still played a central role for Martina Merz’s board of directors. Blast furnaces and smelting works should come back to the fore again, and a “future steel pact” should bring forward the sector that has been neglected for years.
Instead, Stahl Thyssen-Krupp incurred immense losses and high write-offs in the past fiscal year. It’s not the only deep red construction site. Despite the billions in income from the sale of the elevator division, the need is so great that thousands of employees are to leave the group: Instead of the previously planned 6,000 jobs, Thyssen-Krupp wants a total of 11,000 in the coming years Jobs to brush. In contrast to the past, when solutions that were as socially acceptable as possible were sought in accordance with the union and works councils, redundancies can no longer be ruled out. “The next steps can be more painful than the previous ones,” said CEO Martina Merz. “We will have to go further into the red before we have made Thyssen-Krupp fit for the future.”
The Downsizing has been running since last year and has already cost around 3,600 jobs. This means that there are now a further 7400 positions available. Merz announced that they will work harder to improve performance everywhere. The figures for the 2019/20 financial year, which ended at the end of September, show how urgently this will be.
Shortfall of 5 billion euros
Across all business areas, the group has spent 5.5 billion euros more than it earned. The depreciation adds up to more than three billion euros. In addition to steel, Thyssen-Krupp also had to revise the value of its auto parts business downwards. Together with the losses from day-to-day business, the depreciations pull the result deep into the red. Without the extraordinary income and earnings from the elevator business, Thyssen-Krupp ended the year with a deficit of more than 5 billion euros.
One of the few bright spots is the strengthening of the balance sheet: The elevator sale has improved the equity ratio from six to 28 percent. This frees up time and reserves to drive forward the restructuring of the group and to find a solution for steel. The plans were actually already wasted when the “future pact” was sealed. At the crucial meeting in March, board members and works councils were already wearing corona masks, and only bad news came from the auto industry, as the most important steel customer. A little later, CEO Merz announced the end of the “thinking bans” and put the entire division in the shop window.