The takeover of ThyssenKrupp's high-grade steel group Inoxum by Finland's Outokumpu will create the world's largest stainless steel producer. But the move will cost hundreds of jobs in Germany and elsewhere.
After buying the stainless steel unit Inoxum from German industry giant ThyssenKrupp, Finland's Outokumpu company is planning to cut 1,500 jobs worldwide, up to 850 jobs of them in Germany alone.
Outokumpu's CEO Mika Seitovirta told a news conference in Düsseldorf on Wednesday the cuts would be needed to reduce excess capacity and streamline operations at the remaining production sites.
In a deal reached on Tuesday, ThyssenKrupp will sell its high-grade steel unit to Outokumpu for 2.7 billion euros ($3.54 billion), but will keep a minority stake of 29.9 percent. The Finnish firm agreed to take over Inoxum's pension liabilities and also assumed other liabilities to third parties.
"We're not looking for a speedy and complete withdrawal from Inoxum," ThyssenKrupp's chairman Heinrich Hiesinger said in a statement. "The company has growth potential," he added.
No forced layoffs
Apart from a plant in Krefeld, all of Inoxum's German production facilities will be maintained until the end of 2015, but the job cuts will come earlier.
However, at least until 2016, there will be no compulsory redundancies. ThyssenKrupp said it would offer alternative jobs to some 600 people within the company, which is also a major manufacturer of elevators, submarines and car parts. Other jobs would go with routine fluctuation.
At present, the Inoxum group employs 11,500 people in Germany, Italy, Mexico, China and the United States of America. It has annual sales of more than six billion euros. But massive writedowns last year pushed ThyssenKrupp as a whole deeply into the red.
The merger between Outokumpu and Inoxum will result in the biggest player in stainless steel production with an expected annual turnover of 12 billion euros.
Author: Hardy Graupner (Reuters, dapd, AP, AFP)
Editor: Michael Lawton