The owner of Germany’s largest steelmaker, Thyssenkrupp, said on Monday it aims to turn into a holding company after two centuries as a manufacturer.
The company, once a symbol of German manufacturing might, has struggled in recent years with high costs, tariffs, cheaper Asian competitors, and difficulties around the steel industry’s green transition.
Thyssenkrupp is the result of a 1999 merger between Germany’s oldest industrial giants Krupp, which was founded in 1811, and Thyssen, which was founded in 1891.
The company now says the aim is to become a holding company, a setup that does not produce goods or services itself but instead owns shares in other companies, with shareholdings in independent business areas.
“Such a step will enable us to leverage the full value creation potential of the businesses and use their independence in a targeted way for investments, market opportunities, and further growth,” Thyssenkrupp CEO Miguel Lopez said.
Earlier in the month, Thyssenkrupp said that it planned to cut 11,000 of its 27,000 jobs—or around 40 percent of its steel workforce—over the coming years.
By 2045 at the latest, steel production in Germany must produce “almost zero” emissions due to German laws aimed at making the entire economy greenhouse-gas neutral.
However, earlier in the month, Thyssenkrupp said that it can’t guarantee that its 3-billion-euro ($3.3 billion) “green steel site,” the company’s single biggest investment, will be economical.
Lopez said that his expectation was that sufficient amounts of affordable green hydrogen would be available at the time of completion. However, now he says those assumptions were too ambitious.
“Under the current conditions, there is no guarantee that we will be able to operate the plant economically in the foreseeable future,” Lopez said.
“If this does not change, there is a risk that Duisburg will be home to one of the world’s most modern steel production plants, without an adequate supply of the desired green hydrogen.”
The co-leader of the populist Alternative for Germany (AfD) party, which came a close second in recent federal elections, said the breakup of Thyssenkrupp “symbolizes the decline of our economy.”
The United States maintains a 25 percent tariff on EU steel and aluminum imports as well as reciprocal tariffs of 10 percent on almost all other goods.
Germany, Europe’s largest economy, is known for its skilled labor force and high-end exports.
The country has been struggling with the loss of affordable Russian gas, historic Volkswagen plant closures, and fierce competition from cheaper Chinese electric vehicles.
The German government’s deficit is set to remain elevated, and the government debt ratio is expected to increase to 64.7 percent of gross domestic product in 2026.
