Thyssenkrupp Steel Workers Face Significant Pay Cuts

Thyssenkrupp Steel Europe, Germany's largest steel manufacturer, is undergoing a comprehensive restructuring that will impose substantial financial reductions on its workforce. Following three days of intense negotiations, management has reached an agreement with the IG Metall union, resulting in a new collective bargaining agreement that will remain in effect until 2030. This deal includes a reduction in working hours, the elimination of holiday bonuses, and other cost-saving measures. As a result, employees can expect their average earnings to decline by approximately eight percent.

The weekly working hours will be reduced to 32.5 hours, down from the current 33 to 34 hours. This reduction will have a direct impact on employees' paychecks. The management has committed to investing in the modernization of production sites, which the union considers a positive outcome of the negotiations.

Other financial benefits will also be diminished; for instance, the jubilee bonus for employees with 25 years of service will decrease from a full month's salary to only 1,000 euros. Additionally, the bonus for on-call duty will be cut in half. These measures aim to lower personnel costs by several hundred million euros annually. The union had previously indicated a 'poison list' of 200 million euros in potential cuts, which has now been significantly reduced through negotiations.

The restructuring plan also clarifies previously announced job reductions, with 1,600 production positions expected to be eliminated by 2029 due to plant closures. In total, the company plans to cut approximately 3,700 jobs across all divisions by 2028, leading to an overall workforce reduction of over 11,000, bringing the total number of employees down to below 16,000. This includes the sale of certain business segments. Thyssenkrupp aims to avoid layoffs through voluntary measures, with an interest-based agreement and social plan expected to be finalized by September. However, the costs associated with this restructuring have not been disclosed.

The company is facing a challenging market environment marked by economic downturns, high energy costs, and competition from low-cost imports from Asia. Consequently, Thyssenkrupp plans to significantly reduce its production capacity from 11.5 million tons annually to between 8.7 and 9 million tons.

In Bochum, a site is scheduled for closure by 2028, while plans to shut down a facility in Kreuztal-Eichen have been temporarily shelved. Instead, a strategy for optimizing operations at that site will be implemented to ensure its viability.

Management acknowledged the difficulty of the situation, stating that the measures are essential for the company's future viability. The transformation leadership emphasized the importance of this agreement as a critical step toward achieving a competitive cost structure and enhanced operational efficiency.

The leader of the IG Metall union in North Rhine-Westphalia described the agreement as a compromise with painful concessions required from both sides. However, he emphasized that there will be no compulsory layoffs and that guarantees for job security and investments in facilities are positive developments.

Union representatives stated they made concessions only where absolutely necessary to protect jobs and facilities, ensuring the company can recover from its current difficulties. The ratification of the new collective agreement is contingent upon the approval of IG Metall members and securing the necessary funding from the Thyssenkrupp parent company.