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Company News, 2009-05-08, 03:00 PM

ThyssenKrupp Steel initialed social compensation plan

The dramatic slump of the world economy since autumn 2008 has hit the business of ThyssenKrupp Steel AG very hard. The company has reacted to this by taking immediate action. In a first step, a cost cutting scheme has been established involving a one-off saving potential for administrative and material costs of way over 400 million euros. After the employees had been requested to bring their overtime accounts into balance and take remaining vacation days, it was decided last December to introduce short-time work as from January, affecting more than 15,000 employees in the current fiscal year. Moreover, blast furnace 9 was shut down in March on account of a drastic decline in incoming orders.

In a second step, the “Program 20/10” was developed, aimed at improving structures and securing results involving cost cuts of more than 300 million euros at ThyssenKrupp Steel AG and a further 100 million euros at the subsidiaries. The ten “20/10” initiatives, among them two modules to curtail labor costs in administration and production in a range of up to 150 million euros, are supposed to produce full effect on the results as from fiscal year 2010/2011.

Within the framework of “20/10”, ThyssenKrupp Steel AG’s executive board and works council have now initialed a conciliation of interest scheme as well as a social compensation plan providing the reduction of 1,800 to 2,000 regular jobs by September 30, 2010. “We stick to the clearly defined objective to avoid redundancies for operational reasons, and the same goes for plant shutdowns in this period”, underlines Dieter Kroll, HR director on ThyssenKrupp Steel AG’s executive board. A whole bunch of socially balanced measures has been agreed upon, ranging from voluntary departure with severance payments, through the placement of employees in the internal job market, the offer of transfer measures called “work in work”, regulations on socially balanced departure of employees approaching the age of retirement, down to the intensified use of insourcing. Moreover ThyssenKrupp Steel sees another way of facing the crisis in offering more than 80 apprentices to work part-time (28 hours per week) over two years.

Furthermore, it was agreed that the program “ProZukunft“ of 2006 will be continued. This program provides to take 1,000 finished apprentices onto the workforce by the year 2013, 600 of whom have already been retained so far. “We stick to all contracts and shall continue to offer training on the attained high level,” explains Kroll. After this summer, 329 young people will begin apprenticeships at ThyssenKrupp Steel.

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