FRANKFURT/DUESSELDORF German industrial group Thyssenkrupp (TKAG.DE) said on Friday it planned to cut costs by 500 million euros (428 million pounds) over three years at its steel unit, which it is seeking to merge with Tata Steel's (TISC.NS) European operations.
The European unit, facing pressure from cheap imports and industry overcapacity, has already reduced costs by more than 600 million euros in a restructuring programme that ended about a year ago.
Regarding the latest round of cost-cutting, the group said in a statement: "This will include improving cost efficiency in areas such as personnel, maintenance and repair, logistics, sales and administration."
Chief Executive Heinrich Hiesinger has said restructuring is the only way to keep the firm competitive without consolidation to remove excess capacity in the industry.
On Friday, Thyssenkrupp said it planned to close parts of some production facilities at its heavy plate business unit but said it was not yet clear how many jobs would be affected.
Guenter Back, head of the works council at Thyssenkrupp's steel business, told Reuters the immediate closure of two facilities in the German industrial cities of Bochum and Duisburg would result in up to 350 job cuts.
He said management planned further cuts, for example in logistics and among white-collar staff. "We will fight for every job," he said.
Labour representatives said this week they would oppose further restructuring until there was clarity over a possible merger with Tata Steel Europe. Talks about a merger have been going on since July.
Hiesinger has repeatedly said it remains unclear whether, when or with whom a consolidation may take place.
Thyssenkrupp said on Friday its European steel business had earmarked more than 8 billion euros for facility upgrades and research and development over five years. It said the group would discuss measures in detail with employee representatives.
Thyssenkrupp Steel Europe accounts for about a fifth of group sales, and had an operating profit margin of 4.1 percent last fiscal year.
The group agreed to sell its remaining American steel business, a loss-making steel mill in Brazil, in February.
(Reporting by Georgina Prodhan and Tom Kaeckenhoff; Writing by Georgina Prodhan and Maria Sheahan; Editing by Edmund Blair)