Thyssenkrupp CEO gets new contract to speed up turnaround

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By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) -Thyssenkrupp gave CEO Miguel Lopez a new five-year contract on Friday to continue an overhaul of the struggling conglomerate, averting a leadership crisis after powerful union representatives had opposed his re-election earlier this week.

Lopez took over two years ago and has overseen significant steps in Thyssenkrupp’s turnaround, including the listing of its hydrogen division as well as the sale of a 20% stake in its flagship steel unit.

His approach has drawn fierce opposition from IG Metall, Germany’s biggest trade union, which has accused Lopez of keeping it out of the loop on key decisions and ignoring its concerns about restructuring moves.

Juergen Kerner, IG Metall’s vice chief and Thyssenkrupp’s deputy chairman, earlier this week announced opposition to Lopez’s re-election, citing “fundamental distrust” and failure to deliver a promised overhaul of Thyssenkrupp’s steel unit.

Lopez’s contract extension until May 2031 went through without a casting vote by the group’s Chairman Siegfried Russwurm, which counts twice when the 20-member supervisory board arrives at a stalemate, two sources familiar with the matter said.

“The group is undergoing a challenging and urgently needed transformation process, in which reliability, leadership and clear priorities are of the essence,” Russwurm said following a meeting of the board on Friday.

“The extension of Miguel Lopez’s contract is an expression of our confidence in his leadership and our conviction that clear orientation and continuity along the chosen path are crucial to the further progress and future of Thyssenkrupp.”

The Alfried Krupp von Bohlen und Halbach Foundation, Thyssenkrupp’s biggest shareholder with a 21% stake, welcomed the contract extension, saying stability was decisive in the current environment.

Thyssenkrupp shares closed 4.2% higher.

Kerner on Friday confirmed he had voted against the re-election, reiterating his criticism of Lopez who, he said, had to earn an extension by delivering on his promises.

Lopez, in an internal message seen by Reuters, said it was understandable that Thyssenkrupp’s transformation process was triggering fears and different views, still saying the overhaul required speed and determination.

Thyssenkrupp also said shareholders would be voting on the planned spin-off of a 49% stake in its warship unit Thyssenkrupp Marine Systems (TKMS) at an extraordinary general meeting on August 8, confirming that a separate listing was planned to take place by the end of the year.

TKMS, which makes submarines, frigates as well as sensor and mine-hunting technology, has been benefiting from a broader surge in defence stocks, boosted by higher military spending in Europe amid fears of dwindling U.S. support.

(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Friederike Heine, Rachel More and David Evans)