December 2, 2019 / 4:05 PM / 6 days ago

Thyssenkrupp works council demands $1.7 bln investment in steel unit

FRANKFURT, Dec 2 (Reuters) - Thyssenkrupp needs to pour 1.5 billion euros ($1.7 billion) into its core steel business after years of underinvestment has left at a competitive disadvantage, the head of its works council.

The labour chief’s comments come days after Union Investment, a top-10 investor in the ailing German conglomerate, raised pressure on management to present a turnaround plan for the steel unit or drop the business.

“It is about the existence of steel (at ThyssenKrupp),” Tekin Nasikkol said ahead of a rally planned for Tuesday at the steel unit’s Duisburg headquarters.

The core business has been badly affected by overambitious cost-saving programmes after failed investments in the Americas and three years of fruitless talks about a steel joint venture with Tata Steel, he added.

The company’s problems have been compounded by global overcapacity, cheap imports from Asia and increasingly strict environmental regulation.

Thyssenkrupp this month scrapped the industrial group’s dividend, warned of deepening losses and asked investors for yet more patience over its turnaround.

After four profit warnings and two failed attempts to restructure since July 2018, Thyssenkrupp is also aiming to axe 6,000 jobs including 2,000 at the steelmaking business.

Thyssenkrupp is also looking for new owners of operations where it is clear it cannot catch up with rivals and has started a sales process for its elevators business, which could be valued at between 15 billion and 17 billion euros. ($1 = 0.9073 euros)

Reporting by Tom Kaeckenhoff Writing by Arno Schuetze Editing by David Goodman

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