DUESSELDORF, Germany (Reuters) – Top representatives at IG Metall, Germany’s biggest union, will not approve a sale of Thyssenkrupp’s (TKAG.DE) prized elevator division unless potential buyers give far-reaching concessions to employees, they said.
FILE PHOTO: The logo of German steelmaker ThyssenKrupp AG is seen at the gate to Haus Rheinberg, a villa used for seminars in the valley of the small stream Wisper that confluents with the Europe’s largest waterway Rhine near Lorch, Germany, September 15, 2019. REUTERS/Wolfgang Rattay
The remarks come as Thyssenkrupp’s efforts to list or sell the unit, which some analysts believe could be valued at 17 billion euros ($18.8 billion) or more, with at least 10 bidders shortlisted to submit indicative offers.
Labour representatives have always had great influence at the steel-to-submarines conglomerate and hold half of the 20 seats on its supervisory board, with IG Metall members representing the majority of those.
“We will not give our approval without a fair agreement, without clear commitments to employees – no matter who the bidder is,” IG Metall head Joerg Hofmann told Reuters, indicating large job cuts would be met with fierce opposition.
Hofmann said it was good that there was a competitive bidding process to seek the highest offer for Elevator Technology (ET), by far Thyssenkrupp’s most profitable unit, which employs 53,000, a third of the group’s total staff.
“But I am also making it very clear: there also needs to be a competitive bidding process for fairness with regard to employees,” he said. ET employs about 5,000 staff in Germany.
The sale or listing of ET forms the core of a plan that new CEO Martina Merz must quickly implement to turn around the stricken conglomerate’s fortunes following four profit warnings and two botched restructurings.
IG Metall’s Hofmann also lashed out at Finland’s Kone (KNEBV.HE), whose CEO has expressed interest in a deal, but said earlier this week he might divest Thyssenkrupp assets to address possible antitrust concerns.
“I don’t like it at all when Kone, being one of numerous interested parties, already openly speculates about divesting parts of TK Elevator. That’s certainly not a good offer to employees,” Hofmann said.
Markus Grolms, vice chairman of Thyssenkrupp’s supervisory board and trade secretary at IG Metall, also said that workers would not accept that ET be torn apart. “This also applies to Kone,” he said.
“In our basic agreement with management we have clearly established that any bidder must strike an agreement with us before a signing takes place. That’s not negotiable,” Grolms said, adding any buyer must present a future plan for the unit.
Other possible bidders include Hitachi (6501.T), Brookfield (BAMa.TO), CVC [CVC.UL], Hellman & Friedman, a tie-up of Blackstone (BX.N) and Carlyle (CG.O) as well as a consortium consisting of Advent, Cinven [CINV.UL] and the Abu Dhabi Investment Authority.
Writing by Christoph Steitz; Editing by Douglas Busvine