Tata Steel JV poses high risk for Thyssenkrupp, warns German union

17 Apr 2017

Germany’s biggest union, IG Metall, is opposing a joint venture between Thyssenkrupp AG, the nation’s top steelmaker, and Tata Steel Ltd.

The project is “high risk” for Thyssenkrupp, said represents IG Metall for the steel unit at the Essen-based company. The joint venture will lead to job losses and the closing of steel factories in Germany, according to Wilhelm Segerath, chairman of Thyssenkrupp’s works group council.

Tata Steel has been in talks with Thyssenkrupp and others for a joint venture of their European steel businesses since last year as part of its strategy to increase profitability amid oversupply in the global market. Thyssenkrupp’s chief executive officer Heinrich Hiesinger in November said that pension liabilities were a major stumbling block to an accord.

“Any possible joint venture will have to be based on a convincing business plan with corresponding synergies,” Hiesinger said in January.

Source – livemint.com