The moving of the headquarter from Germany to the Netherlands for the new entity that has been formed by merger of the steel making operations of Germany’s iconic Thyssenkrupp AG and India’s Tata Steel Ltd. would result in thousands of jobs and this has created a ripple in Germany’s political scenario just before the national elections as Chancellor Angela Merkel’s main challenger slammed the job cuts plan.
during an already planned stop in Gelsenkirchen, one of several cities in the Ruhr industrial area with a Thyssenkrupp plant where jobs may be at risk, Social Democrat leader Martin Schulz launched his attack hours after the news of the planned merger broke in the final week of Germany’s election campaign. Schulz is facing the prospect that his SPD may slump to its worst election result since World War II with the Social Democrats trailing badly in the opinion polls after four years as Merkel’s junior coalition partners.
“The plan to move the company headquarters to the Netherlands makes me believe they want to cut jobs — that is not acceptable,” Schulz told a crowd of several hundred people in central Gelsenkirchen, less than 2 kilometers (1.25 miles) from the Thyssenkrupp plant. “Steel is at the core of our industry and the German sites must remain here.”
Thyssenkrupp wants to merge its European business with that of Tata to focus on manufacturing products such as elevators and ships instead of stainless steel which it had developed about a century ago and whose metal was used in Manhattan’s Chrysler and Empire State buildings. The companies said that the proposal could see 4,000 jobs cut from a combined workforce of 48,000.
Schulz said that the way to job cuts would be made easy and co-determination, the system that gives workers a say in German company’s management, would be threatened by moving the headquarters to the Netherlands.
Thyssenkrupp has been caught in the political spotlight as it tries to restructure its steel operations in response to a global glut depressing prices and it was formed in 1999 through the merger of two historic big names in German heavy industry. Viewing the tie-up as a possible precursor to site closures and an eventual exit from steel altogether, employees and political leaders have been critical of the tie-up ever since talks between Essen-based Thyssenkrupp and Tata started last year.
“Steel is a product with a bright future, and we can’t understand why that shouldn’t be part of the core company anymore,” Knut Giesler, regional director of the IG Metall labor union in North-Rhine Westphalia, where Thyssenkrupp employs about 22,000 steelworkers, said.
“So far we have been given no concrete information and that’s why the workers are scared. We won’t accept a deal without job guarantees for the employees and the German sites.”
The North Rhine-Westphalia in Germany is an area that has been in economic decline as traditional industries have shut and it is also the heartland of the labor-friendly SPD and widespread job cuts would be especially painful for the party. While Dortmund and Bochum also have plants, Thyssenkrupp’s facilities around Duisburg are Europe’s largest steel production site.
(Adapted from Bloomberg)