ThyssenKrupp Leader Declares Reformation
ThyssenKrupp CEO Heinrich Hiesinger considers his company’s foray into the Americas its “most costly” mistake.
Photo by Roberto Pfeil/dapd
Watching his company’s proud industrial history become “a case of a managerial culture gone wrong,” ThyssenKrupp chief executive Heinrich Hiesinger says it’s time to redirect the German powerhouse, according to a feature in the Wall Street Journal in December.
Among Hiesinger’s plans is a change of focus from heavy industry to high-tech engineering — and selling off the new twin steel mills in Alabama, which contributed heavily to the company’s $6 billion loss last year.
In assessing the financial status of the company, the WSJ wrote: “Most costly, though, has been ThyssenKrupp’s steelmaking foray in the Americas. It bet billions of dollars that it could manufacture steel slabs in Brazil, then process them into high-grade sheets in Alabama. But delays and mismanagement plagued the project from the start. By the time the Brazil plant began running in 2010, a rising Brazilian currency and climbing wage costs had dashed the economics of ThyssenKrupp’s plan, while steel demand in the U.S. slowed. The plants now have a book value of €3.9 billion, just a quarter of the €12 billion ThyssenKrupp ended up spending on the project.”
Meanwhile, ArcelorMittal, the world’s biggest steel company, has reportedly raised $4 billion in efforts to make an offer for ThyssenKrupp’s Americas plants, according to the Economic Times of India and Reuters.