Thyssenkrupp Activist Investor, Labor Union Call for Peace Talks

(Bloomberg) -- Thyssenkrupp AG’s labor unions and activist investor Cevian Capital said they should sit down to hash out plans for the company’s future after the shock resignation of chairman Ulrich Lehner.

Talks could potentially bridge a contentious divide between investors, who believe Thyssenkrupp needs to streamline its businesses, and unions that want to safeguard jobs. The German industrial giant is facing a leadership vacuum after its chief executive officer and chairman resigned this month under shareholder pressure.

"We won’t agree to a fast carve-up of assets, but are instead interested in developing Thyssenkrupp further,” said Markus Grolms, the deputy chairman and member of the IG Metall labor union.

Thyssenkrupp shares rallied 9.1 percent on Tuesday, fueled by speculation that the company is heading for a breakup.

Cevian, the second-biggest shareholder, said on Tuesday that it welcomed Grolms’s suggestion for talks. The investment firm also reiterated its goal for simplifying Thyssenkrupp, saying it must be “nimble” and “free from excessive costs and bureaucracy” to succeed.

The relationship between Thyssenkrupp and its major shareholders has been fraught. On Monday, Lehner acknowledged that he lost the confidence of major shareholders and the board, and before quitting he blasted investor attempts to "destabilize" the company with methods that resembled "psychological terror."

Chairman Lehner and CEO Heinrich Hiesinger resisted calls for a breakup before they decided to leave the company, saying collaboration across the company helped foster innovation. The appointment of the next CEO or chairman could signal in which direction the company is headed.

“Lehner had been one of the most vocal naysayers around a potential breakup, thus, if anything, this is likely to reinvigorate, rather than dampen, hopes that this will now be the course for Thyssenkrupp,” wrote Bruna Haq, an analyst at JPMorgan Chase & Co.

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