The “Red Square” in the town of Kreuztal in Siegerland is actually called that because its floor is paved red. This week the name could hardly be more appropriate: North Rhine-Westphalia’s IG Metall is preparing to hold a major rally on Wednesday evening on the same “Red Square”. The reason for the anger of the trade unionists is the restructuring plan of the steel division of the industrial group Thyssenkrupp. Around two weeks ago, Germany’s largest steel manufacturer announced that it wanted to cut a total of 11,000 jobs by 2030, 6,000 of them through outsourcing. At least one location, the one in Kreuztal-Eichen, is to be completely closed. The background is the low demand, caused by overcapacity on the global market and the weakness of the auto industry, as well as the pressure to produce climate-friendly production in the future. Angry steel workers who fear for their jobs – that is particularly inconvenient: Federal Chancellor and SPD candidate for chancellor Olaf Scholz. In the spring of last year, he promised Germany a green economic miracle through the transformation to climate neutrality. Now bad news comes from the industry almost every day. Not only the steel industry is in crisis, but also the auto industry, which is so important for German prosperity. Be it Volkswagen, ZF or Bosch: large numbers of jobs are being cut everywhere. Added to this is the insolvency of the battery start-up Northvolt, which was funded by German politicians with 600 million euros: This is particularly dangerous for the SPD in view of the early federal elections on February 23rd. In addition to stable pensions, secure industrial jobs are their most important issue.Many “summits” in the past few weeksIn the past few weeks, Olaf Scholz has invited industry representatives to Berlin for crisis talks several times. Another round with managers and works councils from the steel industry took place on Monday. In order to avoid job cuts, Scholz wants to expand the scope for claiming short-time work benefits. Instead of the usual twelve, it should be able to be used for 24 months. “The Chancellor will ask the Federal Minister of Labor and Social Affairs to initiate this accordingly,” said a statement from the Chancellery after the steel meeting. However, the Federal Employment Agency, which finances the short-time working allowance, recently warned that its reserves have almost been used up. Scholz also said that he wanted to “legally cap the costs of electricity transport in transmission networks at three cents”. He also spoke out in favor of “pragmatism when switching from natural gas to hydrogen”, “so that economical operation can always be possible”. This is likely a reaction to a new analysis by the Fraunhofer Institute, according to which hydrogen is likely to be so expensive in Germany will be like nowhere else in the world. The reason is the combination of high demand and limited options for generating electricity from renewable energies. Scholz also wants to campaign in Brussels for more protective measures against cheap foreign steel. Julia Klöckner speaks of “show”. It is unlikely that companies will be relieved of energy costs before the new elections. The CDU and CSU have announced a fundamental change in economic policy if they win the election. The economic policy spokeswoman for the Union faction, Julia Klöckner, described the meeting in the Chancellery on Monday as a “show summit”. Competitive steel needs “competitive energy prices and taxes as well as less bureaucracy instead of more and more requirements.” After the meeting, Gunnar Groebler, President of the Steel Industry Association, emphasized that the steel industry was “acutely threatened” by unfair competition on world markets. It is therefore “a positive signal” that the Chancellor will campaign for effective foreign trade protection in Brussels. At the national level, high energy costs remained the biggest problem. “The currently politically proposed relief volume of 1.3 billion euros for network usage fees is not enough,” said Groebler and called for “planning security regardless of legislative periods and election dates.” Employee representatives, on the other hand, were generally satisfied with Scholz’s promises. “The Chancellor’s three-point plan identifies the crucial issues and is therefore a good addition,” said Jürgen Kerner, who is the second chairman of IG Metall and at the same time the deputy chairman of the supervisory board of Thyssenkrupp. However, the details need to be improved: “Capping electricity network fees at three cents is a real first step, but it should not only be implemented with the next government.” The head of the Thyssenkrupp works council, Tekin Nasikkol, also made positive comments. “At the steel summit, our Chancellor recognized the signs of the times and promised concrete measures to strengthen the system- and safety-relevant steel industry,” he said. The commitment to promote further transformation steps is also pleasing. Billions for the large steel companies A lot of state money is already flowing into the plan to make the steel industry climate-friendly. Federal Economics Minister Robert Habeck (Greens) and several federal state leaders have provided 7 billion euros in funding for the four largest steel manufacturers. Around 2 billion of these are earmarked for Thyssenkrupp – more precisely: for the promotion of a green steel production plant. It is intended to replace two of the four Duisburg blast furnaces, as was recently stated in a key points paper on the restructuring of the ailing steel division. In this way, the company wants to kill two birds with one stone: the climate-friendly DRI system will only have a significantly smaller production capacity than the two blast furnaces. However, it became clear in the early construction phase that the system would probably be more expensive than expected. Scholz does not rule out government involvement. Recently, calls for more help have been made again and again. Scholz himself no longer rules out a state entry into Thyssenkrupp. In an interview with the newspapers of the Funke media group, he said: “I’m not taking any option off the table now.” He referred to the state investments in the Meyer shipyard, the gas importer Uniper or Lufthansa during the pandemic. Such a commitment is limited in time and “is intended to help companies overcome dry spells so that possible investments do not fail due to a lack of equity capital”. When asked by the F.A.Z., IG-Metall said: “A state entry into Thyssenkrupp may make sense under certain circumstances.” However, it is more important that the state sets the right political framework. More on the subject Thyssenkrupp itself, however, does not necessarily want state involvement, as it does the company announced upon request, but continues to rely on the holding company of the Czech billionaire Daniel Kretinsky to continue to maintain its 20 percent stake in the steel subsidiary increased. “Our goal is a concept that leads to economic independence and entrepreneurial success for Thyssenkrupp Steel.”
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