FRANKFURT (Reuters) - Thyssenkrupp (ETR:TKAG)'s steel workers must brace for a major revamp that could include cuts in production capacity as well as jobs, the division's supervisory board chairman told a German newspaper.
Sigmar Gabriel, a former German economy minister, said that Thyssenkrupp's steel business could not continue the way it was and that the division was in need of "a fundamental reorganisation".
Thyssenkrupp Steel Europe, Germany's top steelmaker with 27,000 employees, is hoping to win Czech energy firm EPH as a 50% co-owner, efforts which have been delayed over lengthy talks with automotive clients, sources told Reuters this month.
Thyssenkrupp's labour representatives last week warned the German conglomerate's management against cutting jobs or capacity as part of an expected sale of the steel unit, which has been hit by high energy and raw materials costs, weak demand as well as cheap Asian imports.
"We have plants that are designed for an annual production of almost 12 million tonnes, but we are currently only selling around nine million tonnes - and the trend may point even lower," Gabriel told Westdeutsche Allgemeine Zeitung (WAZ).
"This can be offset for a while without adjustments, but not in the long term. All of us in the company, the management and co-determination, must now ensure that we develop a plan that will carry us into the future."
Gabriel told WAZ that the division's management planned to present a concept by mid-April.
"How the current situation may affect future employment over the next few years is one of the questions that the Steel Executive Board will naturally have to address. It certainly cannot be ruled out that capacity adjustments will also result in job cuts," said Gabriel.