IG Metall and Thyssenkrupp: Agreement on austerity measures – job cuts to secure locations

Duisburg. Germany's largest steel manufacturer, Thyssenkrupp Steel Europe (TKSE), is facing a far-reaching restructuring that will impose severe financial losses on its employees. After three days of tough negotiations, management and the IG Metall union agreed on a collective bargaining agreement valid until 2030, which includes a reduction in working hours, the elimination of vacation pay, and other savings. On average, employee income is expected to decrease by about eight percent.

Weekly working hours will be reduced to 32.5 hours. Employees currently work between 33 and 34 hours per week; in the future, this will be reduced, which will be reflected in their paychecks. The employers committed to investing in modernizing their facilities, which the union considered a success.

Other previously standard payments will be scaled back, such as the anniversary bonus: Those who have worked for the company for 25 years currently receive an extra monthly salary; in the future, according to IG Metall, this will be reduced to just €1,000. And the bonus for on-call duty will be halved.

The savings are expected to reduce personnel costs by a low three-digit million euro amount per year. IG Metall had spoken of a "poison list" worth 200 million euros, the impact of which was reduced by almost half in the negotiations.

The chairman of the group works council, Tekin Nasikkol, speaks at a rally in front of employees of the steel division in Duisburg.

Source: Federico Gambarini/dpa

Previously announced job creation plans have been finalized; 1,600 production positions are to be eliminated by 2029 through the closure of production units. In addition, 3,700 positions are to be eliminated across all corporate divisions by 2028. Previously, it was stated that "around 5,000" jobs would be eliminated; the current figure is 5,300. According to the company, this is not an intensification of the cost-cutting plans, but rather a clarification. The company currently has approximately 26,300 employees, compared to 27,000 last fall.

Overall, the number of jobs is to be reduced by more than 11,000 to fewer than 16,000, partly through the sale of parts of the company. The company wants to avoid redundancies. A reconciliation of interests and a social plan are to be drawn up by September. In order to reduce the number of jobs as planned, the company will have to invest money, for example, in severance payments. The amount of these restructuring costs has not been disclosed.

Germany's largest steel producer has fallen into crisis due to the weak economy, high energy prices, and cheap imports from Asia. As a countermeasure, the company plans to significantly reduce its capacity, reducing shipments from 11.5 million tons per year to just 8.7 to 9 million tons.

A site in Bochum is scheduled to close as early as 2028. A planned closure of a plant in Kreuztal-Eichen in Siegerland (North Rhine-Westphalia), however, is off the table for the time being. A "short-term concept for optimizing the site" is to be implemented there to ensure economic operation.

The ThyssenKrupp plant in Kreuztal-Eichen has been saved for the time being.

Source: Rene Traut

"This is a tough and difficult step for everyone involved, who hoped until the very end that things wouldn't be so bad," said Chief Human Resources Officer Dirk Schulte. However, the measures are necessary. Chief Transformation Officer Marie Jaroni spoke of an important milestone for Thyssenkrupp Steel's future viability. "We are reducing excess capacity, improving efficiency, and thus achieving a competitive cost level."

Knut Giesler, the district manager of IG Metall NRW, spoke of a compromise that contained painful elements for both sides. "However, redundancies are off the table, and there are also guarantees for locations and investments in the facilities – these are good signals."

"We pushed ourselves to the limit and made concessions only where absolutely necessary to secure jobs and locations," said Tekin Nasikkol, chairman of the steel company's general works council. He added that the conditions had been created for the company to emerge from the difficult situation on its own. "However, we cannot compensate for past management errors with employee contributions in the long term."

For the collective agreement to become effective, the steel manufacturer still needs approval from IG Metall members. Furthermore, parent company Thyssenkrupp must secure funding.

RND/dpa