Three Thyssen board members to stand down

Half of ThyssenKrupp’s six-member executive board is set to step down as the German steel and technology conglomerate seeks a fresh start following disastrous investments in the US and Brazil and corruption scandals.

Board members Olaf Berlien, Juergen Claassen and Edwin Eichler agreed to give up their posts at the end of this month “to support the necessary changes in the leadership and leadership culture of Thyssen-Krupp”, the company said late Wednesday. This followed a recommendation of the supervisory board’s personnel committee, which was made in “close co-operation” with Heinrich Hiesinger, who took over last year as chief executive.

“The personnel committee recognises the comprehensive responsibility of the executive board for the management as well as for the leadership culture of the group,” it said. The supervisory board will make a final decision on the matter on December 10.

Since his appointment Mr Hiesinger, a former Siemens executive, has tried to repair the culture and finances of ThyssenKrupp, which has been undermined by several scandals and mishaps that predate his arrival.

Chief among these is the estimated €12bn that ThyssenKrupp spent over the past five years on a network of steel plants in Brazil and US that turned out to be underpinned by an untenable business model.

The Essen-based company is set to report full-year results next week and analysts expect further writedowns and losses related to the Steel Americas unit. Mr Hiesinger hopes to raise up to €7bn by selling the two plants, but some analysts fear the assets may fetch only about half that much. Last year the company made a €1.8bn net full-year loss arising chiefly from the problems in Brazil and ThyssenKrupp lost a further €1bn in the first nine months of this year.

With the departure of the Mr Berlien and Mr Eichler, all executive board members who held office during the era of the Steel Americas investments will have left the company. Ekkehard Schulz, who as chief executive steered the Brazilian expansion, stood down from the company’s supervisory board in 2010. Gerhard Cromme, chairman of ThyssenKrupp’s supervisory board since 2001, remains in his post. ThyssenKrupp said the former executive board had “based their decisions on a series of assumptions and key data that were either clearly too optimistic or later proved to be incorrect”.

“Further to the issues with Steel Americas, ThyssenKrupp is currently confronted with the disclosure of corruption and cartel cases. This also raises the question of the current leadership culture within the group,” it said.

Mr Claassen recently asked the board to suspend him from his duties, pending an investigation, after German media reported the executive had taken journalists on company-financed trips. The supervisory board pledged full support for Mr Hiesinger and Guido Kerkhoff, chief financial officer who also took up his post last year.