Negotiations for Social Compensation Agreement in Duisburg's Steel Industry

The future of Germany's largest steel production site remains uncertain as negotiations for a social compensation agreement are underway. The IG Metall union has paused further strikes at the Hüttenwerke Krupp-Mannesmann (HKM) facility in Duisburg-South, following the onset of these discussions. Thyssen-Krupp Steel Europe (TKSE), the primary owner, alongside partner Salzgitter AG, has pledged not to close HKM within the next two years.

Recent exploratory talks regarding the social compensation agreement involve the three stakeholders, including the French company Vallourec. Marco Gasse, the chairman of the HKM works council, expressed hopes for constructive dialogue, emphasizing that the ultimate decision regarding the plant's future and the social compensation agreement lies with the capital stakeholders, notably Thyssen-Krupp, due to their financial investment.

In the event that no agreement is reached, strike actions will resume, according to IG Metall representatives. The strong participation in previous warning strikes has reportedly contributed to the renewed negotiations.

Additionally, Mirze Edis, a member of the works council and a newly elected member of the Bundestag for Die Linke party, recently introduced an urgent motion at the party's federal congress aimed at preserving the 3,000 jobs at HKM. This motion received unanimous support. It highlights the need for the German government to ensure that significant investments, such as the EUR2 billion allocated to Thyssen-Krupp for the construction of a direct reduction plant, do not lead to site closures and job losses.

As part of the negotiation process, the works council has engaged a corporate consultant to analyze various scenarios and potential outcomes. The recent withdrawal of investor CE Capital Partners from acquiring HKM has raised concerns, as there appears to be no imminent buyer willing to invest in the transformation of HKM into a more environmentally sustainable operation. The objective of establishing a social compensation agreement is to mitigate social hardships and provide future prospects for employees.

Discussions are currently focused on reaching agreements regarding severance packages, expanded early retirement options, job training opportunities, incentives for employee motivation, and safeguarding training positions for apprentices. Large-scale layoffs would significantly impact the already struggling site and its numerous suppliers.

Recently, Salzgitter management, which holds a 30% stake in the Duisburg-South facility, announced that it is considering the independent continuation of production. However, Gasse warns that even a partial continuation of operations at HKM could result in substantial job reductions, especially since TKSE plans to only source steel from HKM until 2032 at best.

The complete closure of the facility would mark the end of a long industrial history. The future of HKM may hinge on securing state support for the development of electric furnaces, favorable decisions from the government regarding industrial electricity pricing, and incentives for electric vehicle production. Ultimately, a true rescue of HKM would require finding an investor willing to purchase the facility and invest in its transition to green steel production.