In the ongoing battle over the future of Thyssenkrupp’s steel division, steel chief Bernhard Osburg faces increasing pressure. However, even his potential departure may not resolve the core problems.
The struggle for the future of Thyssenkrupp’s steel division is intense, marked by hard tactics. Late last week, the IG Metall union announced that up to 10,000 of the 27,000 jobs at Thyssenkrupp Steel could be at risk if the plans of CEO Miguel López were followed. This alarming figure, despite the fact that an expert report on the division’s profitability and potential production capacities has not even been commissioned yet, was a clear message: the workers are ramping up the pressure with threats of strikes and production disruptions in Duisburg.
On Tuesday, August 27, the employee side of the company’s supervisory board publicly expressed solidarity with López, backing his confrontational approach. The statement, signed by key figures like Supervisory Board Chairman Siegfried Russwurm and Ursula Gather, head of the Krupp Foundation, the largest shareholder, left no doubt: They support López’s course, indicating that the restructuring plans presented by the steel board so far are insufficient.
This public endorsement of López was also a clear rejection of Osburg, the previously strong figure in Duisburg. López had already publicly criticized Osburg weeks earlier after a memorable steel supervisory board meeting, making it difficult for Osburg to maintain his position. Despite his competence and local credibility in Duisburg, the endorsement of López by the shareholders has made it nearly impossible for Osburg to remain in his role. Formally, only the montanmitbestimmte supervisory board can dismiss him, but no leader can survive when both the CEO and the shareholders are against him.
However, this public dismantling of a respected manager casts a negative light on the company’s internal dynamics. Yet, style is not the biggest issue here. The real problem is that none of the pressing questions about the future of steel would be fundamentally readdressed by Osburg’s departure. A brutally confrontational approach is unlikely to lead to greater effectiveness or efficiency. The challenges remain the same, and any new leader would likely have to tackle them similarly to how Osburg has.
At its core, the issue is about the financial support the steel division needs from the parent company to position itself competitively in the market. The company is trying to reduce production volumes and workforce requirements to minimize the necessary financial support. López reportedly wants to turn Duisburg into a smaller, more refined steel plant—a “steel boutique.” Currently, the plants are set up for an annual production capacity of 11.5 million tons. Osburg’s restructuring plans and calculations are based on a production volume of around 9.5 million tons annually. Some steel experts suggest that a volume between 8 and 9.5 million tons could still be competitive. Reducing it further might indeed mean that significantly more jobs would need to be cut than the 4,000 to 5,000 currently under discussion.
Economically, there are doubts about the viability of a drastic reduction in steel production. However, it’s clear that the widespread elimination of jobs is politically unacceptable. There are voices within the company warning that while state and federal politicians may express outrage, beyond this verbal solidarity, they are unlikely to take significant action—at least up to a certain threshold of job cuts. But that threshold may not be limitless, as production volume in Duisburg is also a political issue.
The delay in commissioning the IDW S6 expert report, intended to provide a basis for the restructuring discussion, complicates matters further. The steel board and the parent company’s board have yet to agree on an expert, and the interim financing for the steel division, which was supposed to be discussed at the steel supervisory board meeting on Thursday, is not yet ready for serious consideration. The current control and profit transfer agreement (BGAV) expires at the end of September, with the new plan originally expected to be in place a week ago.
Even if shareholders hope to impose their will in Duisburg following Osburg’s possible departure, they will likely face the same challenges and obstacles. Neither the workers nor politicians are expected to allow these hurdles to be easily overcome. Thyssenkrupp is far from a company that can be governed unconditionally.
