Thyssenkrupp, once a symbol of Germany’s industrial strength, is entering uncharted territory. The conglomerate announced a sweeping overhaul this week that would dismantle its centuries-old centralized structure, splitting the company into standalone businesses amid mounting financial losses, competitive pressure from Asia, and intense geopolitical maneuvering.
The reorganization, unveiled on Monday by CEO Miguel López, marks the most radical transformation in the company’s modern history. Thyssenkrupp, which traces its roots back to the early 1800s and helped forge Germany’s industrial identity, will become a holding company. Each of its segments—from steel to submarines, green tech to automotive components—will operate as independent entities, with plans to attract outside investors and possibly sell off major stakes.
This dramatic shift has sparked both optimism among investors and anxiety among employees and policymakers. While the company’s stock jumped over 8% following the announcement, trade unions, politicians, and industry insiders warned of the severe implications for jobs, regional economies, and Germany’s broader manufacturing sector.
Thyssenkrupp’s troubles have been brewing for years. Once the backbone of Germany’s steel industry and a key supplier to the automotive and defense sectors, the company has suffered from bloated costs, outdated infrastructure, and fierce competition—particularly from China and other Asian nations.
Falling steel prices, rising energy costs, and the high price of decarbonization have battered profits. The company posted back-to-back annual losses and was forced to shed 11,000 jobs in its steel division in 2023. Its global workforce now stands at around 100,000, down from nearly 160,000 a decade ago.
“Thyssenkrupp is no longer the company it once was. We are witnessing the dismantling of a German industrial icon,” wrote Bild, Germany’s largest tabloid, in a stark front-page editorial.
The most emotional reactions have come from North Rhine-Westphalia, Germany’s industrial heartland and home to Thyssenkrupp’s headquarters in Essen. Reports suggest that the Essen HQ workforce could be slashed from 500 to just 100 people—a symbolic and practical blow to a region that has long been tied to the company’s fortunes.
Local and national politicians have sounded the alarm. Dennis Radtke, a European Parliament member from the CDU, warned that the shakeup could destabilize Germany’s steel industry and leave the country more vulnerable to Chinese dominance.
“We are looking at a dramatic situation for the entire steel value chain,” Radtke told Stern. “This is not just about one company. It’s about Germany’s industrial sovereignty.”
CEO Miguel López defended the move, saying the restructuring would breathe new life into the conglomerate by giving each segment the autonomy to make faster decisions, raise capital, and pursue tailored strategies.
“The future independence of our current segments… will increase their entrepreneurial flexibility, strengthen their investment plans and earnings responsibility, and improve transparency for investors,” López said in a statement.
The core of the plan involves three major units:
- Automotive Technology: This division supplies components to European car manufacturers, a sector itself undergoing radical transformation amid the shift to electric vehicles.
- Green Transformation Technologies: This includes hydrogen projects, carbon reduction tools, and renewables infrastructure—areas that Thyssenkrupp sees as vital to long-term sustainability.
- Supply Chain Management and Materials Trading: This unit will be spun off to improve agility and competitiveness.
Additionally, plans to spin off the high-margin submarine-building unit—which supplies advanced naval vessels to militaries worldwide—are already underway.
These changes are expected to be finalized in stages over the next several years, with Thyssenkrupp maintaining a controlling interest in each new company.
Thyssenkrupp’s submarine division is currently at the center of a major international bidding war. The company is competing for a combined $16 billion in defense contracts from India and Australia.
-
India is seeking new diesel-electric submarines to upgrade its naval fleet amid escalating tensions in the Indian Ocean.
-
Australia, under Project Sea-3000, is looking to acquire 11 multipurpose frigates as part of a larger effort to strengthen maritime defenses against potential threats from China and to supplement its AUKUS submarine pact with the UK and the US.
A win on either front could provide a significant revenue stream for Thyssenkrupp’s marine unit and boost Germany’s defense industry. However, the restructuring throws added uncertainty into the mix—both in terms of execution and continuity of operations.
Defense experts worry that dividing the group could disrupt procurement schedules or weaken confidence among foreign partners relying on long-term industrial relationships.
One of the more controversial elements of the restructuring is the increasing influence of Czech billionaire Daniel Křetínský. Known for his aggressive acquisitions in European energy and media sectors, Křetínský has acquired a 20% stake in Thyssenkrupp’s steel business. Sources indicate he plans to raise this to 50%, giving him control over Germany’s largest steelmaker.
Unions fear Křetínský will push for even more job cuts and cost reductions, or worse, shift production outside Germany to lower-cost countries.
IG Metall, Germany’s powerful metalworkers’ union, issued a terse statement: “This is not modernization. This is dismemberment. Thyssenkrupp’s leadership has a responsibility not just to shareholders, but to its workers, its communities, and the country.”
Founded in 1811 and expanded by the Krupp family into a global powerhouse during the 19th and 20th centuries, Thyssenkrupp helped arm the German Empire and later supplied essential steel and technology during the post-war economic miracle.
But the company has also struggled to adapt to the modern economy. Its long-standing focus on heavy industry, complex corporate structure, and resistance to change have left it vulnerable in the 21st century.
The company’s failure to spin off or sell unprofitable divisions earlier has haunted management for years. A failed merger with India’s Tata Steel in 2019, blocked by EU regulators, and a misfired IPO of its elevator division in 2020 are just a few of the setbacks that have shaken investor confidence.
López’s plan appears to be a final effort to salvage what’s left of Thyssenkrupp’s relevance in global industry.
Beyond Thyssenkrupp, the overhaul sends a message across Germany’s broader industrial landscape. Long dependent on legacy manufacturing and fossil fuels, German heavy industry is being forced into painful transitions—toward digitization, decarbonization, and decentralization.
Economists say the Thyssenkrupp breakup may be a harbinger of similar moves in other major companies facing the same pressures.
Yet critics argue the state has been too passive. While France has aggressively supported industrial champions like Alstom and Airbus, Berlin has been more hands-off—a policy now under scrutiny.
Radtke and others are calling on Chancellor Friedrich Merz’s administration to intervene, not just rhetorically but with clear industrial policy that prioritizes local employment and strategic resilience.
“Without proactive support, Germany risks losing more than just one company. We risk ceding entire sectors to foreign competitors,” Radtke warned.
Thyssenkrupp’s fate now hangs in the balance. The supervisory board will review the restructuring plan by September, and shareholders are expected to vote later this year.
If successful, the transformation could make Thyssenkrupp leaner, more focused, and better positioned to compete globally. If it fails—or sparks further layoffs and instability—it could mark the end of one of Germany’s last industrial titans.
