Thyssen chairman admits to mistakes but won't quit

Fri Jan 18, 2013 6:59am EST
 

By Maria Sheahan

BOCHUM, Germany (Reuters) - ThyssenKrupp AG (TKAG.DE: Quote) Chairman Gerhard Cromme admitted on Friday to making mistakes that contributed to massive losses at the German steelmaker, but didn't bow to pressure from some shareholders to step down.

"If you ask me whether we as a supervisory board could have done things better in the past, then my honest answer is 'yes, we trusted too long, we could have acted sooner'," he told the company's annual shareholders' meeting on Friday.

Cromme has come under fire for not stopping a botched multi-billion euro project in the Americas, lavish junkets for journalists and a cartel fixing the price of rail tracks.

His comments were greeted by a mix of cheers and boos from a lively audience of several thousand, aware that problems had mounted under Cromme and former Chief Executive Ekkehard Schulz.

Last month the company posted a 4.7 billion euro ($6.1 billion) net loss for the year after taking a writedown on its Americas project and said it would pay no dividend for the 2011/12 fiscal year.

Thyssen invested billions of euros in Steel Americas - comprising two steel mills in Brazil and Alabama - which cost more than expected to set up and has generated losses since.

The euro zone debt crisis has meanwhile hurt demand for cars and weighed on steel prices, causing a slump in profits at Thyssen's European steel business too. The company has 5.8 billion euros of net debt, almost 1.3 times its equity.

Current CEO Heinrich Hiesinger, who in 2011 became the first Thyssen boss to be hired from outside the steel industry, is leading an overhaul to cut the company's exposure to the volatile steel sector and shift investment into higher-margin products and services.   Continued...

 
Gerhard Cromme, chairman of the supervisory board of German steelmaker ThyssenKrupp AG, addresses the company's annual shareholders meeting in Bochum January 18, 2013. REUTERS/Ina Fassbender