The Militant(logo) 
    Vol.61/No.17           April 28, 1997 
 
 
Steelworkers Resist Job Cuts In Germany  

BY CARL-ERIK ISACCSSON
When Krupp-Hoesch, the German steel company, announced March 18 that it intended to take over its larger competitor, Thyssen, Chief Executive Officer Gerhard Cromme of Krupp was met by thousands of protesting steelworkers at the company headquarters, who shouted "Job killer!" The next day the company said it was putting the takeover bid on ice and forming a joint steel venture.

Cromme was hiding behind a riot-shielded police force who sheltered him from flying eggs as he tried to present his plans to the crowd. He was dubbed "Job killer" in 1991, when he organized the merger of Krupp and Hoesch and eliminated several thousand jobs. According to union officials, the merger would threaten tens of thousands of the remaining 110,000 jobs at Thyssen.

Officials at Thyssen, who have trimmed their workforce 9.3 percent over the last five months, vowed to fight Krupp's "wild west" tactics and the hostile takeover attempt. London's Financial Times, however, denounced Krupp's withdrawal as a "cop-out.... They should have expected the political reaction and having launched the bid, should have been prepared see it through."

The unfriendly bid by Krupp-Hoesch on Thyssen was welcomed by business analysts in Germany who praised the effect combined operations of steel production would have on German auto industry, and hoped that it would put pressure on the whole steel industry in Europe to sharpen its competitiveness. Shareholders were happy with the bid, which would grant them 435 D-Marks per share - 25 percent above the value on the Frankfurt stock market. The bid was backed by Deutsche Morgan Grenfell (the Deutsche Bank's investment bank in London), Dresdner Bank, and Goldman Sachs.

An estimated 9 billion D-marks was Krupp-Hoesch's bid to obtain control of Thyssen. The merged company would have become Europe's third largest steelmaker after British Steel and the French Ucinor Sacilor, and the worlds' fifth after the Japanese and South Korean giants Nippon and Posco.

Company mergers through unfriendly takeovers peaked in the United States in the end of the 1980s when according to the German weekly Der Spiegel, 2,730 companies were taken over between 1987 and 1989. Der Spiegel ran a substantial piece in its March 17 issue describing a new trend in German business circles -higher profits at the expense of jobs. The article reflected the divisions within the Germany ruling class over the Krupp-Hoesch bid and other moves toward downsizing by the capitalists, which are sparking fears of growing labor unrest over the high unemployment.

Der Spiegel reports that since 1991, some 2-3 million jobs have been lost in Germany. In February 1997, unemployment was slightly higher than January's figure of 4.658 million reaching 4.672 million people. Germany's jobless rate of 12.2 percent, reportedly a record level since World War II, was remarked in several big business dailies to be the highest since Adolf Hitler came to power in 1933.

A number of jobs were eliminated in the eastern parts of Germany after reunification, but 1.2 million jobs have also been chopped in west Germany since 1991, as high labor costs and a high D-mark has reduced the competitiveness of west German industry. Automakers like Daimler Benz and steelmakers like Krupp-Hoesch and Thyssen are now on a downsizing drive to increase their competitiveness, while unemployment rates are at record levels. Unfriendly takeovers have been rare in Germany and Chancellor Helmut Kohl criticized Krupp-Hoesch's methods.

Steelworkers were not calmed by Krupp-Hoesch's retreat on the hostile bid. On March 25, some 20,000 steelworkers surrounded the Deutsche Bank in Frankfurt - Germany's financial center - protesting the bank's involvement in the takeover. In Dortmund, where the steel mill that is most likely to be closed is located, 6,000 steelworkers marched in the streets. In both Thyssen's and Krupp-Hoesch's steel mills, production was down, reported the German daily Die Welt.

After Krupp-Hoesch had publicly to declared that they had withdrawn their bid on Thyssen, negotiations over cooperation between the two steel companies continued. On March 26, chief executives announced that they would form a joint steel company and assured workers this would not mean layoffs. Krupp-Hoesch promised investments to create new jobs in Dortmund, where more cuts are expected. The union estimated that 8,000 steel jobs will be eliminated by this fusion.

The day before the announcement, some 5,700 steelworkers at Thyssen in Dortmund went on strike indefinitely, followed the next day by 3,000 steelworkers at Krupp-Hoesch steel mills in Bochum, and 2,500 workers in Siegen and Kreutzal.

On March 28, the strikes ended after the union received an agreement from the new company that no layoffs will be made because of the merger, although the new company will be able to cut 6,600 jobs until year 2002.

The Swedish daily Svenska Dagbladet commented March 27 that for the German banks and shareholders, Krupp-Hoesch's bid was a fiasco. It shows that Germany's leading bank, Deutsche Bank is not able to accomplish the same bold takeovers as the banks in London and New York.

Carl-Erik Isacsson is a member of the metalworkers union at Scania truck factory in Sodertalje outside Stockholm, Sweden.  
 
 
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