German steel giant Thyssenkrupp's board recommends sacking CEO

Struggling German industrial conglomerate Thyssenkrupp, which has in recent months suffered merger setbacks and lost its blue-chip status, late Tuesday signalled plans to replace its CEO Guido Kerkhoff.

The news came in a year when the Essen-based historic corporate titan, which makes products ranging from car parts and trains to elevators and submarines, failed in its bid to merge with Indian steel maker Tata and announced major job cut-backs.

The company said in a statement that its supervisory board executive and personnel committees had recommended "to start negotiations to end the board mandate of Guido Kerkhoff shortly".

Amid other suggested changes at the top, he would be replaced by Martina Merz as chairwoman on the executive board for no more than 12 months.

 

"The Supervisory Board will review and decide on the recommendations of the executive committee and the personnel committee in an extraordinary meeting shortly," said the Thyssenkrupp statement.

Thyssenkrupp announced in May it was scrapping merger plans with Tata and would slash 6,000 jobs worldwide in a structural shakeup.

The German group said concerns from the European Commission had sunk its bid to create the second-largest European steel company, behind multinational giant ArcelorMittal, and to join forces in the face of the surge of Chinese steel.

Thyssenkrupp said at the time it was aiming for a stock market listing of its elevators business, its most profitable unit, which employs around 50,000 people worldwide, as part of the restructuring.

But according to recent German media reports, the supervisory board was not satisfied by the way Kerkhoff handled the operation.

Thyssenkrupp had launched a formal auction process for sale of the unit, in addition to plans for an initial public offering.

Earlier this month, Deutsche Boerse said it would eject the company from the DAX index of 30 leading shares on the Frankfurt stock exchange.

The steel giant had been a DAX member from the index's creation in 1987, becoming even weightier after its merger with rival Krupp in 1999.

The company's shares have plummeted more than 60 percent since 2018, with the European Commission's decision to block its merger with India's Tata worsening the slide.