Salzgitter AG 2015 Reorganization Program

Negotiations on "Pact for the Future" (Zukunftsvertrag) concluded and viable business concept agreed for the Peine location

The business environment of the Salzgitter Group has been burdened by the structural crisis in the European steel industry for a considerable period of time. Increasingly fierce competition, emanating above all from the protracted capacity underutilization of numerous producers in southern Europe, has exerted a great deal of pressure on the businesses of steel producing companies. Peiner Träger GmbH has been the hardest hit, as its sectional steel products are processed by the construction industry that is in deep recession in many southern European countries.

The "Salzgitter AG 2015" reorganization project, launched in October 2012, is aimed at stabilizing the Salzgitter Group's competitiveness. Its goal is to adjust the structures and workflows of the Group as a whole to the challenging conditions in the sales markets. Part of the program also entails the intention of reducing the 25,000 jobs in the Group by more than 1,500.

With a view to implementing personnel-related measures, the Executive Board and employee representatives of Salzgitter AG, accompanied by IG Metall, conducted negotiations on a "Pact for the Future" that have now been concluded. The Pact places special emphasis on defining the available personnel management instruments with the aim of achieving personnel adjustments that are as socially compatible as possible.

A viable business concept, taking account of the specific market conditions that pose a threat to the company's survival, was agreed for the Peine location. Peine's production capacity was scaled back to one million tons a year, and more than 800 jobs will be safeguarded.

The conclusion of the negotiations marks the fulfillment of the prerequisites for introducing the operational measures in the Group companies. These measures have already been defined at the level of the individual companies, and implementation is to take place swiftly.

"While the negotiations on the Pact for the Future and the business concept for the Peine site were extremely challenging, they are decidedly constructive and were conducted with a successful outcome in mind", said CEO Prof. Dr.-Ing. Heinz Jörg Fuhrmann. The agreements reached reflect the basic consensus between the Executive Board and the employee representatives that the swift implementation of the " Salzgitter AG 2015" project is an absolute necessity for stabilizing the Salzgitter Group's competitiveness while safeguarding the company’s independence and as many jobs as possible at the same time.