ThyssenKrupp in shake-up
By Uta Harnischfeger in Frankfurt
Financial Times
December 12, 2000
Several large shareholders of ThyssenKrupp seem close to achieving a
sweeping management reshuffle, in an attempt to break the impasse created
by the joint management structure of the merged German engineering and
steel group.
They are trying to convince Heinz Kriwet, chairman of the supervisory
board, to resign next year so Gerhard Cromme, co-chief executive along
with Ekkehard Schulz, can replace him on the supervisory board.
Leading shareholders expect that Mr Cromme handing over the chairmanship
to Mr Schulz would lead to other changes among the double positions created
during the merger.
"ThyssenKrupp's owners expect Mr Kriwet to step down for the good
of the company," said a senior manager. "They want the company
to be able to strive ahead without having to consider all these political
sensitivities within."
The merger of two fierce competitors has left many internal rivalries
and as lots of posts are shared between Thyssen and Krupp executives, decision-making
has become bogged down.
So far, the shareholders have not formally put forward their suggestions
to the supervisory board, nor to Mr Kriwet nor Mr Cromme.
The two big shareholders controlling ThyssenKrupp are the Krupp Foundation,
with 16.75 per cent, and Iran, with a 7.51 per cent stake. The two investors
normally vote as a block and with 24.26 per cent in effect have a veto
over key decisions. Allianz and Commerzbank hold 6.99 per cent through
a joint holding company.
Supervisory board members representing the shareholders could bring
up the issue as early as January 10 at ThyssenKrupp's next supervisory
board meeting.
One possible date for a reshuffle could be September 30, which marks
the end of ThyssenKrupp's fiscal year.
ThyssenKrupp has suffered several setbacks this year. It cancelled the
flotation of its steel unit and lost out in its bid for Mannesmann's Atecs
automotive unit. The shares have fallen almost 50 per cent this year.
Last month, the group told investors it would maintain all parts of
the conglomerate for now, and further delay plans to sell several engineering
units, such as shipbuilding. Instead, it would shed about E2bn ($1.8bn)
worth of businesses outside its six core segments of steel, automotive,
elevators, materials services, industrial services and diverse engineering.
ThyssenKrupp was formed from the merger of Thyssen and Krupp in March
1999. The merger was the result of an agonising year-long process marred
by the long-standing hostilities between the two companies, political bickering
and unions' interference.
In the year to September 30, ThyssenKrupp's pre-tax profit rose 60 per
cent to E1.1bn on sales up 15 per cent to E37.2bn.
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