Thyssenkrupp shareholder criticises CEO, demands restructuring

Updated: Sat, Jan 13, 2018
10:20 pm
Reuters
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A major shareholder in Thyssenkrupp has criticised Chief Executive Heinrich Hiesinger for failing to achieve his own profit targets, raising tensions before the German industry group`s annual meeting next Friday.

Swedish investor Cevian reiterated its call to restructure Thyssenkrupp, in which it controls an 18 percent stake, effectively challenging Hiesinger`s plan to merge its steel business with that of India`s Tata Steel.

"Thyssenkrupp is not developing in the way we expected. Something has to change in the structure of the business," Lars Foerberg, co-founder of Cevian, told the Frankfurter Allgemeine Sonntagszeitung.

In extracts of the interview released ahead of publication on Sunday, Foerberg took Hiesinger to task over his long-term plans to achieve operating margins of between 6 and 7 percent at Thyssenkrupp`s non-steel operations.

"Even today, the company is still achieving just half of its margin target. That is simply too little," Foerberg told the newspaper.

He did not give a direct answer to a question on whether Hiesinger should resign, but said: "If a strategy doesn`t achieve the desired goal, you have to change it. We expect that both from the Thyssenkrupp management and supervisory boards."

Cevian last clashed with Thyssenkrupp after third-quarter results were published in November that showed the company achieving its highest order intake in five years as it develops its `smart` elevator and automotive businesses.

While facing investor criticism that Thyssenkrupp`s conglomerate structure is outdated, Hiesinger has also sought to placate a unionised workforce fearful of job losses that might arise as a result of the steel merger.

Thyssenkrupp management and workers finally struck a deal in December to secure steel plants and jobs, in a major step towards completing a merger that would create Europe`s second-largest steel group after Arcelormittal.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)