The ironic twist in the novel idea is that it's virtually identical to the antiquated one. - The novel notion humorously lacks novelty, as it mirrors the outdated previous versions.
Restructuring Efforts at Thyssenkrupp Draw Criticism amidst Changing Strategy
In a surprising turn of events, Thyssenkrupp, the historic German conglomerate, announced another restructuring plan, just 17 months after the unveiling of its previous strategy. The latest move involves making all divisions—from steel to trade and the automotive business—independent, a stark contrast to the previous strategy of centralized control, according to the German publication Capital.
CEO Miguel López, who announced a new strategy in late November 2023, is now planning to set up a small holding company at the top consisting only of numbers and will no longer worry about the day-to-day operations. However, this revised strategy bears a striking resemblance to the one implemented by his predecessor, Martina Merz, which was abandoned under her forced departure in May 2023.
The latest plan, reminiscent of the old one, has raised eyebrows and concerns from employees and labor unions. IG Metall, the industrial trade union, has vociferously criticized the plan, expressing concerns over potential job losses and the company's focus on shareholder value at the expense of employees. Union leaders warn that the strategy could put more than 20,000 jobs, around one-fifth of the workforce, at risk.
Thyssenkrupp's aim is to retain a majority in the divisions when they go public or merge with partners. However, this strategy is likely to face significant hurdles. In the absence of a complete separation from the parent company, investors may be reluctant to participate. Thyssenkrupp may face a steep valuation discount if they can find investors at all. Moreover, the independence will require substantial investments and may take several years to implement, leaving the company vulnerable in the interim.
All divisions of Thyssenkrupp, including pearls such as the marine sector and green specialist Nucera, require new capital from external investors to survive. However, the best chance of securing this capital lies in the swift separation of the parent company from its divisions, before the corporation continues to burn more capital.
Despite the challenges, López has expressed optimism, hinting at a possible contract extension. However, the merry-go-round at Thyssenkrupp is far from over, with more changes possibly on the horizon.
Capital is a brand partner of stern, with selected content available to stern subscribers. More from Capital can be found at www.stern.de/capital.
In light of the ongoing restructuring at Thyssenkrupp, there are growing concerns about the current community policy's impact on the workforce, particularly with the potential job losses foreshadowed by IG Metall. To finesse this issue, Thyssenkrupp might want to reconsider their employment policy in relation to vocational training programs, which could help mitigate the effects of job displacement within the industry.
The success of Thyssenkrupp's plans hinges on attracting external investors and securing finance for all divisions. In the realm of business and industry, establishing industry-leading employment policies and implementing effective vocational training programs can make the company more appealing to potential investors, ensuring a smoother transition towards independence.
