Thyssen AGs steel production and shares trading came to a grinding halt on Tuesday, even as the German media expressed fears that a takeover bid by rival Krupp AG would create further job losses in a country already suffering record post-war unemployment.
Thyssen workers had staged vigils outside factory gates at seven locations throughout the night, a spokesman for Thyssens works council said yesterday.
Even the blast furnace in Duisburg Beekerwerth, which was earlier working at normal, was run down to emergency operations yesterday morning as furious workers downed tools throughout the Ruhr valley, Germanys industrial heartland. Krupp on Tuesday launched a rare 13.6 billion-mark ($8.1 billion) hostile takeover bid, offering 435 marks per Thyssen share.
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The offer sparked an angry response from Thyssen, which recommended that shareholders do nothing while it prepared its response to the unwelcome bid. Shares in Thyssen AG and Fried Krupp AG Hoesch-Krupp were suspended on Tuesday and will remain suspended till further announcements relating to Krupps takeover bid for Thyssen, a spokesman for the Frankfurt stock exchange said. Thyssen shares closed floor trade at 346.80 marks on Monday. Krupp closed at 272 marks. Meanwhile, Germanys newspapers expressed wide concern over the possible lay-offs resulting from the hostile takeover bid.
The mass circulation Bild asked Krupp chief executive Gerhard Cromme: Herr Cromme do you want to set our country on fire? Think about people more than balance sheets. Referring to the so-called economic miracle of Germanys post-war recovery, it added: It took half a century to build up our country...This was the work of humans made of flesh and blood, not accountancy and balance sheets.
The Frankfurter Allgemeine Zeitung said it was precisely in the threat to jobs that the greatest risk to the deal, which is based on a generous cash offer to Thyssen shareholders, lay. Such a merger threatens jobs in (Krupps) own yard and would demotivate many of the 120,000-plus Thyssen workers. Even if the goal may ultimately appear secure, the route towards it is full of dangers.
But the Handelsblatt business daily noted that Cromme had already met similar worker resistance in past efforts to reduce manufacturing capacity and the 1991 takeover of the Hoesch group.
In both cases he won through. Now the man of action Cromme wants to crack the toughest nut of all, it said.
The main question now, it added, was whether the politicians would lend their support to the deal a year before a general election and with unemployment the hottest political issue.
Whether the politicians this time back the side of the workers remains to be seen. In the Krupp-Hoesch takeover, they bowed to the arguments of capital.
The left-leaning Frankfurter Rundschau said the plan was a game of Monopoly of a size and consequence that has never before been played out in German industrial history.
It speculated on how intrinsic to the deal the banks that were now pledging finance to Krupp had been.
Without the agreement or what would be even worse the active involvement (of the banks) in the breaking up of the Thyssen group, Krupps offer would not be on the table, the Rundschau said.