Thyssenkrupp steel, workers agree deep cuts in major overhaul

By Christoph Steitz

FRANKFURT (Reuters) -Thyssenkrupp and trade union IG Metall on Saturday said they had agreed on reduced working hours, lower bonus payments and site closures as part of a push to revamp Germany's largest steelmaker and prepare it for a standalone future.

The accord with steel workers marks a major step in Thyssenkrupp's restructuring, under which the former German industrial icon is planning to turn into a holding company, and comes after renewed tension between management and labour representatives.

Implementation of the new collective bargaining agreement, which runs until September 30, 2030, must be approved by IG Metall members at Thyssenkrupp's steel unit TKSE and is pending an agreement on the division's future financing, they said.

The package, agreed after several days of non-stop negotiations, will result in annual savings of more than 100 million euros ($117 million), a person familiar with the matter said.

Dirk Schulte, TKSE's board member in charge of human resources, told journalists on Saturday that the comprehensive deal was "the biggest ever" in the group's history.

The agreement follows Thyssenkrupp's announcement that up to 11,000 jobs at TKSE, or around 40%, had to be cut or outsourced and that annual production capacity would be lowered to 8.7-9.0 million tons from 11.5 million tons.

"We went to the pain threshold and only made concessions where it was really necessary in order to secure jobs and locations," said Tekin Nasikkol, head of Thyssenkrupp's works council and member of the group's supervisory board.

"We have now created the conditions for the company to emerge from the difficult situation out of its own strength," Nasikkol said in a statement.

Thyssenkrupp had wanted to reach a deal regarding the restructuring by summer and both sides aim to finalise the current agreement by the end of September.

Reaching a wage deal has been seen as a key hurdle to be cleared before Thyssenkrupp can sell an additional 30% stake in TKSE to Czech billionaire Daniel Kretinsky, as planned. The investor already owns a 20% stake via a holding company.

($1 = 0.8555 euros)

(Reporting by Christoph Steitz; Editing by Sharon Singleton and Tomasz Janowski)