July 10, 2018 / 10:28 AM / a year ago

Stability needed after CEO exit, say Thyssenkrupp workers, foundation

FRANKFURT/DUESSELDORF (Reuters) - Thyssenkrupp’s workers and its leading shareholder will serve as an anchor of stability at the company following the sudden departure of Chief Executive Heinrich Hiesinger, they told a German regional newspaper.

FILE PHOTO: ThyssenKrupp CEO Heinrich Hiesinger addresses the company's annual shareholders meeting in Bochum, Germany, January 19, 2018. REUTERS/Thilo Schmuelgen/File Photo

The remarks by the Alfried Krupp von Bohlen und Halbach Foundation, Thyssenkrupp’s top shareholder with a 21 percent stake, are the first in several years to address the company’s strategy, which has come under fire from activist investors.

Cevian, Thyssenkrupp’s second-largest shareholder with an 18 percent stake, has demanded that the sprawling group must be simplified, should grant more independence to its business units and explore strategic options for them.

But Ursula Gather — head of the Alfried Krupp von Bohlen und Halbach Foundation — and Markus Grolms, trade union secretary at the IG Metall union and vice chairman of the group’s supervisory board, suggested that radical change was not the answer.

“The foundation and labour representatives have always stood up for the stability of the company. That will not change in the future,” they jointly told Westdeutsche Allgemeine Zeitung (WAZ).

Between them, the foundation and labour representatives hold 12 of the 20 seats on Thyssenkrupp’s supervisory board, giving them a clear majority to block key strategic decisions. Both had voted in favour of a historic steel tie-up with Tata Steel.

Gather has faced criticism for not backing Hiesinger strongly enough in the face of fierce opposition from activist investors, including Cevian and Elliott, with some sources saying this played a role in the CEO leaving so abruptly.

Hiesinger, which had led the elevator-to-submarines group since January 2011, unexpectedly resigned last week, just days after the deal with Tata Steel was signed.

Armin Laschet, state premier of North Rhine-Westphalia where Thyssenkrupp is headquartered, will meet finance chief Guido Kerkhoff and chief human resources officer Oliver Burkhard on Thursday to discuss the situation, government sources said.

Laschet also holds a seat on the foundation’s board.

The meeting, first reported by Rheinische Post, will also include Grolms and Knut Giesler, head of IG Metall in North Rhine-Westphalia.

Thyssenkrupp declined to comment.

The group on Friday said it would start a structured process to find a successor to Hiesinger. Analysts at Credit Suisse said Stefan Kirsten, who served as Thyssenkrupp’s finance chief between 2002-2006, would be an “interesting option”.

Kirsten, 57, recently stepped down from his post as finance chief at real estate group Vonovia.

Reporting by Christoph Steitz and Matthias Inverardi; Editing by Keith Weir

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