ThyssenKrupp reports loss, to slash 5,000 jobs

• By GEORGE FREY
• Associated Press writer
• Published: Nov 27, 2009 - Page: 6B

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FRANKFURT — German steel maker ThyssenKrupp AG — the company that chose Mobile, Ala., over Louisiana for a new steel mill in 2007 — reported a loss of $2.8 billion for the 2008-2009 fiscal year and announced plans Friday to cut 5,000 jobs and sell divisions employing another 15,000 people.

The company said the loss was due to a number of restructuring charges and the impact of the global economic downturn on the steel industry.

At the same time, the company faced construction costs for building up its businesses in Alabama and Brazil.

The loss, equal to 1.87 billion euros for the fiscal year that ended Sept. 30, compared with a net profit of 2.3 billion euros the previous year for Thyssen-Krupp, based in Düsseldorf.

Revenue fell 24 percent to 40.5 billion euros ($60 billion) from 53.4 billion euros in the previous fiscal year.

Orders declined to 36 billion euros ($54 billion) from 55 billion euros in the 2007-2008 fiscal year — a 35 percent decline.

The company did not immediately release fourth-quarter figures.

Chief Executive Ekkehard Schulz said the company expected to cut about 5,000 jobs, and the rest of the payroll reductions would be made through divestment of units. He didn’t specify what the company planned on selling.

ThyssenKrupp said it expected sales to stabilize in the current fiscal year, and said pretax earnings should be in the high three-digit million euro range.

However, it said it would be significantly affected by project costs and startup losses in the Steel Americas business.

ThyssenKrupp reiterated that construction work on a new steel mill and processing plant near Mobile is being adapted to reflect the decline in steel demand.

The company selected Mobile over St. James Parish in 2007. Much of that same site has since been acquired by Charlotte, N.C., Nucor Corp., which itself has delayed a decision into 2010 on building a pig iron mill in Louisiana or in Brazil.

ThyssenKrupp, meanwhile,  said the construction of a carbon steel-processing line in Mobile is continuing as planned, and it will start operating in the second quarter of 2010. A stainless steel mill at the site is set to begin production in October.