• Germany's news in English

ThyssenKrupp halves pay after losses

The Local · 18 Jan 2013, 15:41

Published: 18 Jan 2013 12:44 GMT+01:00
Updated: 18 Jan 2013 15:41 GMT+01:00

Facebook Twitter Google+ reddit

The supervisory board's 20 members would "forego half their pay for 2012," board chief Gerhard Cromme told ThyssenKrupp shareholders at their annual general meeting in Bochum, northwest Germany.

"This gesture is intended as a sign of our dismay and our solidarity with you, our shareholders," he said.

The move is related to huge losses the company incurred at new steel mills in Brazil and the United States.

ThyssenKrupp has been forced to write down the value of those plants, running up an overall year-end loss of €4.7 billion ($6.3 billion) for the business year ended September 30.

Given the magnitude of that loss, the group announced it would not pay a dividend for the first time since the merger of Thyssen and Krupp nearly 14 years ago.

The steel mills have since been put up for sale, but negotiations are still ongoing.

The annual meeting was an uncharacteristically stormy one, with not only shareholders calling for Cromme to step down in the wake of the debacle concerning the steel mills, but also anger at a recent string of scandals at the company.

The scandals include a price-fixing cartel, luxury trips laid on for journalists and alleged bribery in contracts in eastern Europe and China.

Chief executive Heinrich Hiesinger told shareholders that ThyssenKrupp's "old leadership culture was characterised by 'old boys' networks' and blind loyalty in many areas."

Such networks were not only "outdated, inflexible, slow, [but] as we are currently seeing, also destructive," Hiesinger said.

"We openly admit that a lot of things went wrong, a lot of things were inappropriate or behind the times. Where rules and laws have been broken, we will rigorously investigate and take action," he vowed.

"The cultural change now under way is desired and there is no alternative."

Hiesinger also said ThyssenKrupp was sticking to its earnings targets for both the current quarter and the full year.

"A full-scale recovery of the global economy is... not in sight for our fiscal year 2013," he said.

The global business environment remains clouded, because the sovereign debt crisis in the euro zone is still unresolved, while growth momentum in emerging markets is slowing.

He also said that ThyssenKrupp expected "declining momentum" in the automotive industry, a key industry for the group.

Additionally, the steel industry faces a challenging environment due to falling volumes and increased price pressure.

ThyssenKrupp continued to project underlying profit of around €200 million for the current quarter and €1 billion for the whole year, down from around €1.4 billion last year.

Story continues below…

Sales were expected to remain stable at around €40 billion.

Hiesinger said the planned sale of the group's steel business in the US was on track and was expected to be concluded before the end of September.

By contrast, ThyssenKrupp had no plans to sell its steel business in Europe, he insisted.

ThyssenKrupp shares were among the biggest losers on the Frankfurt stock exchange on Friday, shedding 1.14 percent in an only slightly softer market.


The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
These are Germany's top ten universities
The new library of Freiburg University. Photo: Jörgens.mi / Wikimedia Commons

These are the best universities in all of Germany - at least according to one ranking.

Introducing Swabians - 'the Scots of Germany'
Photo: DPA

These Southern Germans have quite a reputation in the rest of the country.

Woman sues dentist over job rejection for headscarf
Photo: DPA

A dentist in Stuttgart is being taken to court by a woman whom he rejected for a job as his assistant on the basis that she wears a Muslim headscarf.

Isis suspect charged with scouting Berlin attack sites
Photo: DPA

German federal prosecutors said Thursday they had brought charges against a 19-year-old Syrian man accused of having scouted targets in Berlin for a potential attack by the Isis terror group.

Berlin Holocaust memorial could not be built now: creator
The Memorial to the Murdered Jews of Europe, in Berlin. Photo: DPA.

The architect of the Berlin Holocaust memorial has said that, if he tried to build the monument again today, it would not be possible due to rising xenophobia and anti-Semitism in Germany and the United States.

'Liberal' Germany stopping Europe's 'slide into barbarism'
Ian Kershaw. Photo: DPA

Europe is not slipping into the same dark tunnel of hate and nationalism that it did in the 1930s - mainly thanks to Germany - one of the continent's leading historians has said.

Eurowings strike to hit 40,000 passengers
Travelers impacted by the strike on Thursday wait at Cologne Bonn airport. Photo: DPA.

The day-long strike by a Eurowings cabin crew union is expected to impact some 40,000 passengers on Thursday as hundreds of flights have been cancelled.

Deutsche Bank reports surprise quarter billion profit
Photo: DPA

Troubled German lender Deutsche Bank reported Thursday a surprise €256-million profit in the third quarter, compared with a loss of more than six billion in the same period last year.

US 'warned Merkel' against Chinese takeover of tech firm
Aixtron HQ. Photo: DPA

The German government withdrew its approval for a Chinese firm to purchase Aixtron, which makes semiconductor equipment, after the US secret services raised security concerns, a German media report said Wednesday.

Long-vanished German car brand joins electric race
Photo: DPA

Cars bearing the stamp of once-defunct manufacturer Borgward will once again roll off an assembly line in north Germany from 2018, the firm said Wednesday.

10 German clichés that foreigners get very wrong
Sponsored Article
Last chance to vote absentee in the US elections
10 ways German completely messes up your English
Germany's 10 most weird and wonderful landmarks
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
jobs available
Toytown Germany
Germany's English-speaking crowd