Thyssenkrupp's restructuring plan has 'failed', labour bosses say

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ThyssenKrupp AG steel plant in Duisburg
General view of the ThyssenKrupp Steel Europe plant in Duisburg, Germany, January 7, 2020. REUTERS/Leon Kuegeler/File Photo

FRANKFURT/DUESSELDORF, March 31 (Reuters) - German industrial group Thyssenkrupp's (TKAG.DE) powerful labour representatives lashed out at leadership on Friday, demanding a strategic roadmap while saying that CEO Martina Merz's plan to create a so-called group of companies had failed.

The comments were made following a supervisory board meeting during which the board presented an update on restructuring efforts, including plans to divest its steel division and prepare the firm's defence division for a standalone future.

Under the plans, the sprawling conglomerate would ideally become more of a holding company owning stakes in its divisions, without necessarily operating them, hoping to revive its languishing share price.

"The concept of the group of companies has failed for us," Thyssenkrupp's labour representatives said in a message to works council members and staff that was seen by Reuters.

"The board has been lacking an overall concept for months. Nothing has moved since last autumn and time has again been lost unnecessarily. This is not acceptable."

Thyssenkrupp declined to comment.

While workers are willing consider a standalone solution for steel if it gets adequate funds there are no concrete discussions with management on the issue, the message said.

Attempts to list, spin off, sell or merge the cyclical steel division with a peer have failed in the past, mainly because of the billions of pension liabilities tied to the business that go back more than 200 years.

Thyssenkrupp management still favours an independent structure for the steel division, an internal memo to staff citing Merz and Chairman Siegfried Russwurm said, adding this included thoroughly assessing potential partnerships.

The steel business management is expected to present a future strategy in May, the memo cited Merz as saying, adding this could trigger more far-reaching strategic decisions.

This could also hold true for Thyssenkrupp's defence division Marine Systems, where labour representatives and management have reached an agreement to prepare the business for standalone future soon.

Reporting by Christoph Steitz and Tom Kaeckenhoff; Writing by Riham Alkousaa; Editing by Jan Harvey, Kirsten Donovan and Josie Kao

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