26 May 2023 – An open letter from German steel giant thyssenkrupp steel europe to the German Federal Ministry for Economic Affairs and Climate Protection is now apparently intended, with the help of the works council, to force the disbursement of subsidies amounting to around 2 billion euros for a less than transparent and alleged green steel project. Otherwise, the project would be stopped. Now they are playing hardball? What’s going on?
- Threats for subsidies: Does thyssenkrupp want a quick spruce-up of the steel shop before possible sale?
- Merger with Tata Steel to fail in 2019
- More and more employees lose jobs
- Steel division is a slow seller
- No transparency, no concept for the future
- No more sustainable management possible?
- German steel giant: "No industry has ever survived on subsidies"
- Better threats to Berlin than charm offensives and declarations of love
- 2 billion euros for a project that will probably never become green?
- Will Germany stop paying for greenwashing?
- Germany Federal Ministry of Economics not in the mood?
Threats for subsidies: Does thyssenkrupp want a quick spruce-up of the steel shop before possible sale?
“I’d rather see future concepts and more transparency in their own financing instead of being publicly smothered with a charm offensive and declarations of love,” thyssenkrupp steel Europe works council head Tekin Nasikkol told Handelsblatt in a November 2020 interview.
Nasikkol was referring to the collapsed merger between British steelmaker Liberty Steel and ailing German steel giant thyssenkrupp, where turbulence, mismanagement, job cuts and calls for subsidies and state support are more or less the order of the day. After all, the tradition-rich Ruhr-based group has been lurching from crisis to crisis for years.
Merger with Tata Steel to fail in 2019
This is not the first botched attempt to sell the tottering German steel giant. Already in 2019, ostensibly due to competition concerns about a possible dominant position in the market, a merger between Tata Steel and thyssenkrupp was rejected by the EU. thyssenkrupp’s lawsuit against the EU merger ban ultimately failed before the European Court of Justice (ECJ) in mid-2022.
More and more employees lose jobs
Result of the burst deals, year after year more and more employees had to leave. In total, job losses added up to 13,000, of which just under 10,000 had already been cut within 3 fiscal years according to thyssenkrupp’s annual report from November 2022.
But presumably thyssenkrupp had concentrated primarily on releasing around 9,500 employees from the cash cow Elevator Technology before the sale of the division for 17 billion euros in order to make it more attractive for the buyer, while at the steel division as a dead loss hardly anything has moved in terms of employees for years. In any case, the power of the steel works councils is not being challenged. Other colleagues would rather fear for their jobs.
Steel division is a slow seller
The thyssenkrupp Group still wants to spin off the steel division from the overall group. It is more than doubtful whether this will succeed given Germany’s restrictive labor laws, billions in pension provisions (of more than 5.7 billion euros) in combination with works councils and unions which, with the support of the Executive Board and Supervisory Board, are holding a gun to the head of Germany’s Economics Minister Robert Habeck, the Greens, and thus also to the German taxpayer (whether citizen or company) with demands almost reminiscent of blackmail.
No transparency, no concept for the future
Because at thyssenkrupp nothing works without subsidies and state aid. And unfortunately, there is no sign of “transparency in its own financing” and economic “concepts for the future” as demanded by Nasikkol in the Handelsblatt interview at the rusty steel company from Duisburg.
No more sustainable management possible?
After all, what can still be sustainable at thyssenkrupp that is not even rudimentarily generated out of the company’s own pocket but has to be paid for at the expense of billions in tax revenues? After all, the company has been living on credit and at the expense of others for years. And now the profits from the sale of surplus CO2 certificates, of which the steelmakers have been getting more than they need for years, and which have demonstrably contributed to the fact that no CO2 reduction has taken place, are now quite publicly and with a big plus in the profit and loss account.
German steel giant: “No industry has ever survived on subsidies”
The fact that the demands for government subsidies at thyssenkrupp were or are not really transparent was pointed out recently in our article >>> German steel giant: “No industry has ever survived on subsidies” <<<.
A short excerpt from the article: And thyssenkrupp’s planned direct reduction plant for green steel in Duisburg is also “to a large extent a state-owned one“, Green Party politician Felix Banaszak said recently in an interview with IKZ from April 2023. At least a “state-financed one – with a small contribution from the company itself”, the politician continued in the interview. Important details on the financing of thyssenkrupp’s historic large-scale project have not yet been made public.
Better threats to Berlin than charm offensives and declarations of love
That Mr. Nasikkol of charm offensives and love proclamations nothing holds, was already mentioned at the beginning. Now the chairman of the works council is calling on the German government to loosen up the purse strings once again in order to give the bride a fat dowry in the form of a direct reduction plant that may one day be green in the far distant future. And which has actually not been welcome at the parent company for a long time. So why not polish it off with taxpayers’ money before thyssenkrupp tries to sell it off again?
2 billion euros for a project that will probably never become green?
Because as long as there is neither green hydrogen nor sufficient renewable energies to operate the plant, it will remain an extreme CO2 guzzler, just like its smoking blast furnace sisters. According to the company’s own statements, climate-neutral production can only be achieved if 4.5 terawatt hours of renewable energy are available. This would correspond to 4.5 times the electricity requirements of the city of Hamburg.
Green hydrogen that is not available, but necessary for the production of climate-neutral Direct Reduced Iron, is also to be substituted by natural gas and hydrogen produced from natural gas – until there could possibly be a green hydrogen industry at some point in the future.
That the production of blue or grey hydrogen produces significantly more CO2 probably does not need to be mentioned again, does it? And also that we are only writing about ONE steel manufacturer here!
Will Germany stop paying for greenwashing?
The state of North Rhine-Westphalia, the federal government in Berlin, the European Union and, in the end, the taxpayer, which, by the way, also includes competitors who generate profits on their own, are supposed to pay for it and are showered with threats in return.
Germany Federal Ministry of Economics not in the mood?
The German Federal Ministry of Economics and Climate Protection and Minister Habeck don’t really seem to be in the mood to give the project the green light at the moment. According to the media, it is allegedly pending a decision from Brussels. It is possible, however, that people in Berlin are no longer convinced that the DRI project is about more than just greenwashing.
“How much more subsidized protectionism Mr. Habeck, it is time to end this game. You can now really show how much guts you have in your bones in the face of this already open blackmail,” Thorsten Gerber, CEO of Gerber Group said today.
- Scrap supply becomes increasingly important for China
- BF/BOF vs. EAF: The Green Steel Clash
- EU Safeguard: What is actually going on?
We at the Gerber Group have been trading in stainless steel worldwide for over 20 years. We are your experts when it comes to purchasing, import, logistics and services. Information is a vital part of this. Because only then can you and we make the right decisions. Do you have any questions? Contact us now.
Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.