A worker tends to steel production at a thyssenkrupp plant in Duisburg, Germany. thyssenkrupp, Getty Images

Thyssenkrupp Receives Union Ultimatum on Jobs, Plants in Tata Merger

The IG Metall union has submitted a catalog of demands, including assurances that the Indian company won’t flood the European market with steel.

Germany’s biggest union has given thyssenkrupp AG until Dec. 22 to guarantee jobs and investments before the labor group will give its blessing to a joint venture with Tata Steel Ltd.

The IG Metall union submitted a 10-point catalog of demands including assurances that the Indian company won’t flood the European market with steel, the union’s Dusseldorf-based spokesman Mike Schuerg said by phone.

Thyssenkrupp reached a tentative deal in September to merge its European steel businesses with Tata in a bid to create the region’s second-largest producer and help tackle overcapacity in the industry. The companies flagged the possible loss of as many as 4,000 jobs from a newly combined workforce of about 48,000.

“The courtship with Tata’s gone on for a year and a half and we may be presented with a month or so to sign off on it,” Schuerg said. “We need clarity and assurances.”

An ad hoc group of Thyssenkrupp managers and union members will meet on Dec. 22, Schuerg said. Without the assurances it seeks, the union may canvass members for a vote and doesn’t rule out a veto of the merger by supervisory board members, he said. “We have a variety of options.”

Adding Pressure

IG Metall members on thyssenkrupp’s supervisory board feel they are being kept in the dark about the merger’s implications, Schuerg said. They fear they may be asked to give the deal formal backing without enough to time to scrutinize the package or seek amendments, he said. Thyssenkrupp hopes to seal the deal in 2018.

Alexander Cordes, thyssenkrupp’s Essen-based spokesman, declined to comment.

The demands add pressure to thyssenkrupp CEO Heinrich Hiesinger, who’s already facing criticism from key investors like Cevian Capital AB. Hiesinger’s four-year effort to turn the conglomerate around lacks “tangible progress,” Cevian co-founder Lars Forberg said in a Nov. 23 Handelsblatt interview.

Hiesinger has the board’s full backing, supervisory board chairman Ulrich Lehner said in an interview with the paper today.

Reuters first reported the union’s ultimatum to thyssenkrupp.

By Brian Parkin

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