Thyssenkrupp Steel Restructuring Deepens as Losses Hit First-Quarter Results

Thyssenkrupp

Thyssenkrupp steel restructuring has moved into a more expensive and more decisive phase. The German steelmaker reported a €334mn net loss in the first quarter of its 2025-26 financial year. Most of that damage came from €401mn in restructuring expenses tied to Steel Europe. As a result, Thyssenkrupp steel restructuring is now shaping both earnings and the company’s future direction.

The latest loss matters because it reflects more than weak market conditions. Thyssenkrupp linked the restructuring costs to its collective agreement with IG Metall reached in December 2025. That agreement followed a period of lower prices and weaker shipments. Therefore, Thyssenkrupp steel restructuring is now moving from planning into full financial impact.

Steel Europe’s operating backdrop remains difficult. Sales in the division fell 10pc year on year to €1.96bn in the October-December quarter. Shipments also slipped 4pc to 1.73mn t. Consequently, weak pricing and soft demand in key end-use sectors are still weighing on Thyssenkrupp Steel Europe.

Thyssenkrupp Steel Europe Faces Weak Demand but Stable Operating Priorities

Thyssenkrupp Steel Europe continues to face pressure from sluggish European steel demand. The company said softer conditions in its main customer industries hurt both pricing and revenue. That remains a central challenge for the business. As a result, Thyssenkrupp Steel Europe is still operating in a market that offers little margin relief.

There were, however, a few areas of stability. Deliveries to automotive customers and steel service centres improved during the quarter. Hot-rolled coil deliveries also rose to 562,000t from both the previous quarter and the same period a year earlier. Therefore, not every volume indicator moved lower inside Thyssenkrupp Steel Europe.

Lower raw material costs and efficiency measures helped offset part of the damage. But they were not enough to reverse the broader earnings pressure. That means cost control is helping, yet not solving the core problem. Meanwhile, European steel demand remains too weak to deliver a meaningful recovery on its own.

Duisburg Direct Reduction Plant and Potential Sale Show Two Paths at Once

The company is now pursuing two major strategic paths at the same time. Thyssenkrupp confirmed confidential negotiations with India’s Jindal Steel International over a possible sale of Thyssenkrupp Steel Europe. Due diligence is already under way. As a result, Thyssenkrupp steel restructuring is no longer only about cost cutting. It is also about ownership change.

At the same time, the group is continuing construction of its Duisburg direct reduction plant. That project is moving ahead despite regulatory uncertainty. The decision suggests Thyssenkrupp still sees green steel investment as part of its long-term industrial future. Therefore, the Duisburg direct reduction plant remains strategically important even as asset sales are considered.

The company also reiterated plans to sell its stake in HKM to Salzgitter from 1 June 2026. It also reminded the market that blast furnace no 9 at Duisburg was shut permanently last October. These moves show a business actively reshaping its production base. Consequently, Thyssenkrupp steel restructuring is now affecting assets, ownership, and technology all at once.

The Metalnomist Commentary

Thyssenkrupp’s quarter shows how hard it is to restructure steel in Europe while demand stays soft and decarbonisation costs keep rising. The most important signal is not the quarterly loss alone. It is that Thyssenkrupp is now redesigning its steel business through labour agreements, asset sales, and lower-carbon investment at the same time.

Volkswagen's Cost-Cutting Measures Amid Chinese EV Competition

IG Metall

Volkswagen (VW), Germany’s largest carmaker, is negotiating cost-cutting measures with IG Metall, the metalworkers' union, to combat the increasing pressure from Chinese electric vehicle (EV) manufacturers. VW has agreed to reduce workers’ wages by 10%, a step aimed at addressing declining market share in key regions, particularly China.

Rising Challenges in the EV Market

The cost-cutting comes as VW faces declining global sales and capacity utilization. In the third quarter of this year, VW reported global deliveries of 2.17 million vehicles, a 7.1% year-on-year decline. The company’s factory utilization rate also dropped to 69%, compared to 79% in 2019. German car factories overall are performing worse, with utilization rates at just 56%, down from 70% in 2019, partly due to sluggish economic growth.

In Germany, EV sales have plummeted following the removal of a €4,500 government subsidy for EV purchases in December 2022. Despite the challenges, VW’s Emden plant is set to transition exclusively to battery-electric vehicles by next year, with production targets of 190,000 units for the ID.4 and ID.7 models.

Chinese Competition and Global Impact

The biggest threat to VW's market position is the rise of Chinese carmakers. Chinese manufacturers have aggressively gained market share in the EV sector, climbing from 36% in 2020 to 63% in the first half of 2023, according to Automobility Media. This competition has led to a steady decline in VW’s sales in China, dropping from 3 million units in 2018 to 2.1 million units in the first nine months of 2023.

VW’s post-pandemic struggles are reflected in its September announcement to close two underperforming plants, which contributed to a forecasted sales shortfall of 500,000 units annually. The ongoing negotiations with IG Metall focus not just on pay cuts but also on issues such as temporary work and worker training, with a meeting scheduled for November 21.

Strategic Adjustments for the Future

While cost-cutting measures are a short-term strategy, VW is also making long-term adjustments to stay competitive. The company plans to ramp up its EV production, betting on models like the ID.4 and ID.7 to strengthen its presence in the global EV market. However, with Chinese carmakers continuing to dominate both domestically and internationally, VW’s ability to innovate and streamline operations will be crucial to maintaining its position as a global automotive leader.

Volkswagen to Close Plants and Cut Jobs Amid Falling Sales

Volkswagen

Volkswagen, one of the world’s leading car manufacturers, has announced plans to close at least three of its production plants in Germany and lay off thousands of employees. The decision comes as the company faces pressure to reduce costs while labor unions demand higher wages.

According to the company’s works council, the closures could affect any of Volkswagen’s 10 production sites across Germany, although the specific plants to be closed remain unclear. In addition to the closures, other plants are expected to undergo downsizing. Volkswagen currently employs approximately 120,000 people in Germany, with nearly half based at the company’s headquarters in Wolfsburg, Lower Saxony.

Financial Struggles and Falling Sales

Volkswagen is taking drastic measures to save money as it grapples with declining sales and an increased financial strain. According to its financial report, the company’s operating margin dropped from 7.3% to 6.3% in the first half of 2024. The Volkswagen Group, which owns several major brands such as Audi, Bentley, Porsche, Lamborghini, Skoda, and commercial vehicle makers Scania and MAN, sold about 6.5 million vehicles between January and September 2024, a 2.8% decline compared to the same period in 2023.

The decline in sales is primarily attributed to a decrease in overall car demand in Europe, with sales in Asia, Volkswagen's second-largest market, falling by 11%. Despite maintaining strong marketing strategies and product quality, the drop in demand has significantly impacted the company’s financial performance.

Labor Unrest and Political Backlash

Volkswagen’s decision to cut jobs and close plants follows the end of its no lay-off guarantee, which had been in place since 1994. The company also rejected the unions' demand for a 7% salary increase, sparking protests led by the IG Metall union and political leaders. Olaf Lies, the Economy Minister of Lower Saxony, expressed concerns that closing plants could result in permanent losses of production capacity and expertise.

The state of Lower Saxony holds a significant stake in Volkswagen, owning 11.8% of the company and holding 20% of the voting rights. The regional government has urged Volkswagen to keep all of its German plants operational and to avoid large-scale layoffs. This highlights the delicate balance the company faces between its financial health and its obligations to workers and local governments.

Germany Launches Green Aluminum Alliance to Drive Decarbonization

Germany Al

Germany has unveiled the German Aluminium Alliance, a coalition formed to spearhead the transition toward a competitive, climate-neutral aluminum industry. Spearheaded by the Aluminium Deutschland association, the alliance unites key players, including major trades unions IG Metall and IG BCE, and economic authorities from the federal states of North Rhine-Westphalia, Rhineland-Palatinate, Saxony-Anhalt, Saarland, and Hamburg.

Building a Sustainable, Competitive Aluminum Sector

The alliance’s primary objectives include developing low-emission technologies for aluminum production, creating a climate-neutral value chain, and boosting sustainability through a circular economy. With Germany’s aluminum industry playing a critical role in decarbonization, the alliance plans to advance research funding, secure stable energy supplies, and advocate for fair global competition to prevent carbon leakage. These goals align with enhancing Germany’s industrial competitiveness while contributing to EU-wide climate targets.

Aluminium Deutschland president Rob van Gils emphasized the need for aluminum in meeting climate goals, noting that cooperation with political and social partners is essential to ensure sustainability and industry resilience.