Collective Concurrence, Crafting Competitiveness: The Accord’s Essence

In a significant milestone for Germany’s industrial landscape, thyssenkrupp Steel and IG Metall unveiled the ‘Steel Realignment’ agreement. Negotiated intensively over recent months, the accord lays out a shared roadmap to secure the medium-term independence and competitiveness of thyssenkrupp Steel, the nation’s largest steel producer. According to Marie Jaroni, Head of Sales and Transformation, “Following intensive negotiations, the agreement reached together with employee representatives is an important milestone for the future viability of thyssenkrupp Steel.” This agreement balances tough cost-saving measures with plans to modernise production, a reflection of the joint ambition to protect jobs while repositioning the company in a challenging global market.

Production Pruning & Plant Pauses: Detailed Closure Plans

Central to the agreement is the plan to scale back production capacity to an annual shipping target of around 8.7 to 9 million metric tons, a significant reduction intended to align output with current demand. Among the steps, blast furnace 9 will be shut down at the start of the next financial year, and blast furnace 8 will be decommissioned when the new direct reduction plant becomes operational. The Bochum site will see the closure of hot strip mill 3 at the beginning of 2026, and the electrical steel production site on Castroper Strasse will close ahead of schedule by the end of the 2027/28 financial year. Efforts continue to avoid closing the Eichen site, with optimisation concepts for the Siegerland region under review. Dirk Schulte, Chief Human Resources Officer, acknowledged, “The negotiations demanded significant concessions from both sides, as compromises typically do. Yet, with this framework, we can give clarity and security for employees.”

Investment Infusion & Infrastructure Initiatives: Modernising for the Future

In parallel, thyssenkrupp Steel commits to substantial investments to preserve operational strength and competitiveness. This includes upgrading a continuous casting line to ensure narrow slab supply at the Hohenlimburg location, modernisation plans for Electrical Steel plants and funds to complete the direct reduction plant. These projects reflect the company’s intent to lower CO₂ emissions and respond to rising customer demand for low-carbon steel. Marie Jaroni added, “We are scaling back excess capacities, improving efficiency, and thus achieving a competitive cost level. This is another urgently needed step into the future of thyssenkrupp Steel.” The modernisation aligns the firm with European climate targets and signals its ambition to maintain technological leadership in specialty steels.

Efficiency Edicts & Employee Exits: Reducing Headcount Responsibly

Beyond closures, the accord foresees efficiency measures to trim costs and simplify operations, targeting around 3,700 positions by the end of the 2027/28 financial year. Measures include streamlining administrative functions and adopting leaner management structures. Notably, the agreement aims to manage reductions responsibly, with both parties stressing the goal of avoiding compulsory redundancies. thyssenkrupp Steel and IG Metall also agreed on social plans and reconciliation of interests to support affected employees, providing clarity and stability during the transition.

Spin-offs & Strategic Segmentation: Focusing on Core Business

The agreement also includes plans for ‘make-or-buy’ reviews and outsourcing strategies, potentially affecting up to 4,000 employees by the end of the 2029/30 financial year. These measures aim to let thyssenkrupp Steel concentrate on its core activities while external partners manage certain services or units more cost-effectively. The company already sold its Spanish subsidiary thyssenkrupp Galmed and the Indian unit of thyssenkrupp Electrical Steel, together accounting for about 500 employees. Added to this, around 1,500 positions relate to thyssenkrupp Steel’s exit from Hüttenwerke Krupp Mannesmann HKM. The spin-offs, while challenging, form part of a broader realignment strategy to ensure financial resilience and operational focus.

Cost Curtailment & Concessions: Bold Financial Measures

To restore cost competitiveness, several significant measures were agreed. These include cancelling holiday pay and special payments, halving on-call allowances and reducing weekly working hours in unionised sectors from 34 to 32.5 hours, while non-pay scale employees' weekly hours drop from 41 to 39. Other measures include cutting anniversary bonuses and cancelling six free days for non-pay scale employees, albeit with a buy-back option. The leadership acknowledged the scale of these cuts, underlining that they are necessary to align costs with European rivals and keep thyssenkrupp Steel sustainable.

Milestone Moments & Mutual Mandate: Leadership Voices

Marie Jaroni framed the deal as a necessary evolution: “It is an urgently needed step into the future of thyssenkrupp Steel.” Dirk Schulte stressed the significance of balancing economic needs and social responsibility: “With this agreement, we are giving employees clarity and transparency at a time of change.” Both leaders highlighted that final agreements, including social compensation plans, must be completed by the end of September. The framework still awaits approval from IG Metall members and is contingent on securing the necessary financing. Yet, the accord stands as a shared commitment to safeguard the company’s legacy and adapt to a transforming global steel market.

Key Takeaways:

• thyssenkrupp Steel & IG Metall agreed on ‘Steel Realignment’ to cut capacity & staff, boosting efficiency until 2030.

• Production to drop to about 9 million metric tons, with closures of blast furnaces, mills & outsourcing up to 4,000 jobs.

• Investments aim to modernise plants & reduce CO₂ emissions, while both sides pledge to avoid compulsory redundancies.