Thyssenkrupp Steel is the largest steel producer in Europe. The Duisburg-based group is one of the “energy-intensive” companies in Germany that consume a particularly large amount of gas, coal and electricity. So far, most of this energy has come from Russia.
He has never experienced anything like this in 43 years of service at Thyssenkrupp, says the man from plant security at gate 3 of Europe’s largest steel producer, Thyssenkrupp Steel. Here in Duisburg, in the middle of the pot, nothing can easily faze people.
They are used to rough times, especially at Thyssenkrupp. The steel company, founded in 1891, has repeatedly found itself in difficult waters in recent years. Two years ago, in 2020, there was even a threat of the end after serious management errors.
The debate was whether to sell or break up the entire steel division. Then IG Metall and Thyssenkrupp Steel agreed to cut 3,000 jobs by 2026. Socially acceptable, without redundancies.
“There was always something going on here,” says the security guard. But the current crisis with the pandemic, the Russian war against Ukraine, the highest inflation since 1951 and skyrocketing energy, fuel and food prices is the hardest in his life so far.
Is he worried about his job? “I can not say that. Not at the moment. You don’t know how things will continue. If the weakman in Moscow keeps rattling his saber, anything is possible.”
And then this friendly gentleman with the gray moustache, the rimless glasses, the stubble haircut and the blue and yellow security vest says something that makes the Ruhrpott’s calmness appear almost fatalistic: “Personally, I’m not worried. Let’s put it this way: If World War III comes, then it will come, we can’t do anything anyway.” He is not allowed to give his name, and a photo is out of the question.
Information and figures on the economic situation of the company, which employs more than 100,000 people worldwide and generated sales of 34 billion last year, are currently particularly difficult to obtain. There is a “quit period” until the balance sheet press conference on November 17th.
Next week the public will find out whether and how the Russian war against Ukraine has also affected the economic heart of the Ruhr area, how much energy prices have risen and how Europe’s largest steel producer will react.
13,000 employees at Thyssenkrupp Steel, which produce eleven million tons of steel every year, will find out whether they have to worry about their jobs.
Energy demand is currently the biggest problem in the economy in general. According to a current survey by the Association of German Chambers of Industry and Commerce (DIHK), 82 percent of all companies classify energy and raw material prices as a business risk. German companies are preparing for another economic slump in the next twelve months.
“Companies fear that the worst is yet to come,” said DIHK General Manager Martin Wansleben when the survey was presented in early November.
Only eight percent of the companies expect the situation to improve, 52 percent assumed that their own business would deteriorate. “This is the worst value that we have ever measured since the survey began,” Wansleben is quoted as saying on the DIHK website.
At the beginning of the year, Thyssenkrupp Steel still covered 40 percent of its energy requirements with Russian gas and Russian coal. The company did not want to say how high the current share is, nor did it want to assess its own economic situation.
However, one thing is certain: “Since the beginning of the war in Ukraine, the costs for gas and electricity have risen to an unprecedented extent. They pose an existential threat to society as a whole, to each individual and especially to energy-intensive industries such as the steel industry.”
Words that do not go unnoticed by Martin Schmidt (34). “I’m not worried, I’m worried,” says the electrician, who trained at Thyssen in 2009 and has worked for the company ever since.
We meet him after the morning shift at Gate 3 on Franz-Lenze-Strasse. The beefy man with the bald head, the hipster beard and the Hard Rock Cafe T-shirt doesn’t know exactly how to assess the situation himself. “You don’t talk about it much at work,” he says.
“Colleagues complain that fuel is getting more expensive, everything is getting more expensive, you have less money in your wallet, but that has nothing to do with Thyssen.”
He’s a bit unsure, but at the moment he’s still confident: “Thyssen has been around for over 100 years. The company will manage,” he says, adding a soft “hopefully” before he goes to the car and calls it a day.
When will the situation for Thyssenkrupp Steel become an “existential threat”, how far does this threat then extend? In the six months before the Russians invaded Ukraine on February 24, 2022, spending on gas and electricity had increased by a three-digit million amount, as Thyssenkrupp Steel CEO Bernhard Osburg admitted at a conference in mid-February 2022, a few days before raid.
If costs continue to rise and the economy weakens, Thyssen would “in extreme cases shut down individual plants in order to save more energy,” writes Thyssen in a statement to FOCUS online. That means: less production, less income, short-time work.
That sounds threatening, at least for a worker who is still on probation and therefore does not want to read his name in this article: “I’m afraid of ending up under the bridge.” Last year he moved in with his girlfriend, for the first time For once he has his own apartment, and this as a 42-year-old. The Croatian had previously lived with his parents.
He started his new job in industrial cleaning at Thyssenkrupp Steel at the beginning of October, he earned 1,200 euros net in his old company, he does not yet know what exactly he will get at Thyssen, he has only just started and has not yet received his first salary receive.
The 55 square meter apartment in Marxloh cost 501 euros last year, and now the rent has risen to 514 euros. Actually inexpensive for a big city, but still too expensive for him. In principle, he could not afford everyday life.
The man with the thinning blond hair pulls a pack of Lucky Strikes out of his brown leather jacket. He smokes about ten cigarettes a day, “a little more in company, you sometimes give one away.” A pack of 20 cigarettes costs 7.20 euros.
“And you also want to go on vacation.” Last year he was in Croatia with his girlfriend in the broken Audi. He constantly had to refill oil, he pays 50 euros for a liter.
The brown four-year-old Audi that he likes so much is now for sale, he bought a used silver Opel Corsa for 5000 euros so that he could safely travel the 10 kilometers from his apartment to gate 3 of Thyssenkrupp Steel on Franz-Lenze – Street is coming. “It’s all too much,” says the unskilled worker. “I’m scared of existence, of course.”
Other workers who come from the early shift this Sunday cannot understand these fears: “We’re fine, we don’t talk about the crisis, that’s not an issue,” says a young man who has his cell phone to his ear and after eight hours of work this Sunday just wants to go home. The bandwidth in the workforce apparently ranges from carelessness to severe insecurity. How does the company deal with this?
The employee representatives perceive “only limited uncertainty”, according to circles of the works council. The 13,000 Thyssenkrupp Steel employees will receive 90 percent of their wages in the event of short-time work.
“People see that, people feel that, we have a strong say through IG Metall, the employees feel safe with us,” says a member of the works council who does not want to be named.
The company announced that there is currently no short-time work at Thyssenkrupp Steel, except in isolated cases. Apparently there is no reason. Thyssenkrupp Steel has apparently done good business so far this year. “Despite sharply rising raw material and energy costs”, the “adjusted EBIT” (earnings before taxes) rose to 376 million euros by August after 19 million euros in the previous year.
How does this work? “It’s probably down to the quality of our steel,” says Klaus Nöhte (56). The steel from Duisburg is better than that from other companies. The architect has been working for Thyssenkrupp Steel for eight months, designing industrial buildings.
Many new buildings are planned, “an awful lot is happening here,” says Nöhte. For him this is a sign that Thyssen will continue to do so for a long time to come.
The father of two comes out of the office late on this Tuesday evening, it is almost dark. He lives in Rheydt, 60 kilometers away, but he takes the time to talk, the high energy prices and the future of Thyssen are important topics for him.
“Personally, I’m not worried about my job,” he says, but he also knows: “There are enough people here in wages and bread whose existence is at stake.”
“This is a big issue in the group.” As far as he knows, Thyssenkrupp Steel is investing a billion in alternative energy in order to be independent of external energy. “That’s the only way,” says Nöhte, “we have to become more innovative,” he says. He believes that the next few years will be difficult, but Thyssen will emerge from the crisis “with a black eye”. “I am confident.”
The worst-case scenario is not off the table in Duisburg. The President of the Steel Industry Association, Hans Jürgen Kerkhoff, warned as early as March of a gas stop that could mean a “forced shutdown” for energy-intensive companies like Thyssen, with all the catastrophic consequences for the company and the workforce.
But even without this worst case scenario, Thyssenkrupp Steel is aware of this: “Persistently high energy prices endanger our competitiveness,” says a company spokesman.
So things can’t go on as before. The war shock is apparently accelerating a rethink at Thyssenkrupp Steel: “We need the fastest possible expansion of renewable energies in order to become more independent in the energy supply,” says the spokesman in an interview with FOCUS online.
The green electricity is the flagship project. The electricity producer Steag will supply green hydrogen and oxygen to Thyssenkrupp Steel Europe from 2025, and Thyssenkrupp Steel has also concluded agreements with a number of other energy suppliers and producers on the supply of hydrogen and green energy,” confirms the spokesman.
A new walking beam furnace in Duisburg will also use hydrogen to be heated. The goal: avoiding CO2, conserving resources and the environment, being independent of people like Putin.
In addition, Thyssen not only consumes energy, the steel company also produces it. When pig iron is burned, waste gases are produced that are converted into electricity.
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ThyssenKrupp Steel will comment next week on the extent to which independence is possible, the magnitude by which energy prices have risen since February and how this is affecting the company’s profits and losses.
Despite all the innovative ideas, even the largest German steel manufacturer will not be able to master the crisis without state support.
Last weekend, the government’s Gas and Heat Expert Commission presented its proposals on how Germany should get through the energy crisis: Industrial companies should only pay seven cents per kilowatt hour for 70 percent of their electricity requirements.
For comparison: A kilowatt hour currently costs an average of 43 cents for new customers, according to data from the comparison portal Verivox (as of November 8, 2022).
On October 14, this price was still 56 cents. According to the Gas Commission, private individuals should only pay 12 cents for 80 percent of their previous gas consumption. “We welcome the Gas Commission’s proposals.
Rapid implementation is now important, ”said the Thyssenkrupp Steel spokesman. “The government is currently finding the right answers,” says a member of the works council to FOCUS online. He is not worried about the loss of natural gas.
Some of the workers at Thyssenkrupp Steel are more skeptical here and more concerned with their everyday lives, which have become more complicated. You have less money in your wallet due to high energy prices and food costs.
“I now have to pay 2.50 for breakfast meat that I used to buy for 99 cents,” says the Croatian industrial cleaner, who fears the man from the Kremlin and his unpredictable decisions.
The company spokesman only indicated to FOCUS online which aces Thyssenkrupp Steel still has up its sleeve in the event of a worst-case scenario, including stopping gas deliveries: optimized energy management, “adapted preheating processes” and “even more extensive use of our energy network”. are abstract, technical vocabulary behind which one thing appears.
The Duisburg group is forced to change its energy supply. Whether he succeeds may decide the future of Thyssenkrupp Steel and that of 13,000 steelworkers.
