July 23, 2020 / 11:52 AM / in 13 days

Thyssenkrupp will fall apart without steel: deputy chairman

FILE PHOTO: German steelmaker Thyssenkrupp AG CEO Martina Merz walks on the stage during the annual shareholders meeting in Bochum, Germany, January 31, 2020. REUTERS/Wolfgang Rattay

MUNICH (Reuters) - Thyssenkrupp (TKAG.DE) should stay in the steel industry, its deputy supervisory board chairman said, in a challenge to the broader management view that no option has been ruled out for a division under pressure from weak demand.

“If you take out steel, the company falls apart,” Juergen Kerner, who also serves as chief treasurer of IG Metall, Germany’s largest union, told journalists in Munich in comments embargoed for Thursday.

Thyssenkrupp Chief Executive Martina Merz has said a range of options is under consideration for the group’s steel unit. It includes a partial or full sale, joint ventures with rivals or the group could keep the division, she has said.

IG Metall, convinced Thyssenkrupp would have a majority in any merged entity, has argued for national steel consolidation, most likely involving smaller rival Salzgitter (SZGG.DE).

“We expect this to happen under the leadership of Thyssenkrupp,” Kerner said.

It would, however, require the German government to support the loss-making industry with billions of euros, in part to avoid mass layoffs. “Otherwise there’ll be a bloodbath,” Kerner said.

Thyssenkrupp is also exploring partnership options with Sweden’s SSAB (SSABa.ST) as well as India’s Tata Steel (TISC.NS), sources previously told Reuters.

Reporting by Alexander Huebner; Writing by Christoph Steitz; Editing by Barbara Lewis

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