Thyssenkrupp: More Layoffs Ahead

FRANKFURT (AP) -- German steelmaker ThyssenKrupp AG said Friday it expects to lay off more workers after shedding 11,000 jobs in the first nine months of its fiscal year as it pursues cost-saving plans.

The company, however, stressed that it was pressing ahead with new plants in the U.S. and Brazil.

ThyssenKrupp, which had 199,000 employees worldwide at the end of the last fiscal year on Sept. 30, 2008, has moved to reduce costs as the global downturn cut sharply into demand for steel.

The Duesseldorf-based company, Germany's biggest steelmaker, said it still expects further job losses but declined to say how many. Most of the cuts so far came outside Germany.

In addition, some 46,000 people have been affected by shorter working hours as a result of the economic crisis, 30,000 of them in Germany.

Employers' use of shorter work hours has been credited with saving thousands of jobs in Germany over recent months.

CEO Ekkehard Schulz said ThyssenKrupp's supervisory board decided Friday to implement a new restructuring program on Oct. 1 that should save about euro500 million ($710 million) annually in administrative costs.

Schulz said there would be savings in both fixed and personnel costs, but did not elaborate.

That comes on top of the company's existing cost-saving plan, which aims for savings of more than euro1 billion in the current fiscal year.

Lower demand for machinery and cars in particular during the downturn forced ThyssenKrupp to cut its steel production.

The company reiterated it expects a pretax loss for the full fiscal year "in the upper three-digit million euro range."

Schulz told a news conference that ThyssenKrupp's new steel facility near Mobile, Alabama, would start producing in the spring of next year at a reduced capacity and initially would be supplied with raw material from Germany.

ThyssenKrupp has not specified when the stainless steel segment of the plant will start production, and Schulz said managers recommended that it stick to a flexible startup schedule.

Still, Schulz said that the company sees a good chance of being the market leader for stainless steel products in the North American NAFTA region once the economic downturn passes.

ThyssenKrupp also plans to start production in mid-2010 at a new facility in Sepetiba, Brazil, with a second furnace and converter being added in 2011. Schulz said the company could adapt its plans to future market developments quickly.

He added ThyssenKrupp's board had approved an increased investment by Brazilian ore producer Companhia Vale do Rio Doce's in the joint-venture company with Thyssen that will operate the Brazilian plant, Companhia Siderurgica do Atlantico.

Vale will raise its stake in the operating company to 26.8 percent from 10 percent, an investment of euro965 million.

The step "reinforces the value of our investment and strengthens our industrial concept," Schulz said.

ThyssenKrupp's shares closed down about half a percent at euro22.85 ($32.59).

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