Tata Steel Europe Thyssenkrupp Proposed Merger Raising Concerns Among Workers

- Jun 19, 2018-

Moneycontrol reported that labour unions of Thyssenkrupp, Tata Steel's Dutch and UK operations have voiced their individual concerns about the merger conditions. The labour representatives at the German company aired concerns after earnings of Tata Steel Europe dropped even as Thyssenkrupp's numbers grew. At Tata Steel, the workers in the UK facilities are concerned if the merger will lead to shut down of any facilities, eventually leading to job losses. The Dutch facilities have managed to ensure an exclusive provision within the merger.

Tata Steel has guaranteed that the Dutch operations would have control over their profits and effectively continue as an independent company. This hasn't gone well with the counterparts at Thyssenkrupp. German labour union representatives have indicated that they could demand the same. “But then a joint venture no longer makes sense because every unit would only act on its own. The British, the Dutch and the Germans have their self interests that are larger than the collective benefits. This (the merger) is like a steep hill.”

Tata Steel Europe and Thyssenkrupp had signed the merger agreement in September, agreeing to create an operation that will be second only to ArcelorMittal in Europe. The formalities were expected to be completed by June, but have been delayed by six months. The two companies had agreed to an equal joint venture, which will also hold debts of Tata Steel and Thyssenkrupp. The two sides have emphasised the benefits of the merger, which would lead to 400 million euros of synergy gains. But the sticky point would be the reduction of 4,000 jobs.

Source : Moneycontrol


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