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ThyssenKrupp: Nerves of steel

January 31, 2013

THE biggest steelmaker in Germany, ThyssenKrupp, has come to epitomise the good, the bad and?in particular?the ugly of Deutschland AG. In July last year the firm was fined ?103m ($140m) by the German competition authority for complicity in a cartel that conspired to keep the price of railway tracks high. Another scandal involved lavish (but legal) spending on five-star foreign jaunts for journalists and workers? representatives. More damagingly, the company wasted billions building steel mills in Brazil and Alabama by completely misjudging the market.Heinrich Hiesinger, ThyssenKrupp?s chief executive for the past two years, is determined to prove that things are improving. He is shedding some of its core steel businesses, the hallmarks of Thyssen and Krupp, two giants which merged in 1999. He has also sold 70% of its stainless-steel subsidiary Inoxum, and seven other subsidiaries since May 2011.Mr Hiesinger?s goal is to turn ThyssenKrupp into an integrated technology provider, something more like Siemens, the engineering conglomerate where Mr Hiesinger worked until 2010. ThyssenKrupp is now concentrating on making components for cars and heavy vehicles, building naval ships and submarines, and its elevator business. Steel is planned to account for only 30% of sales.Many shareholders praise Mr Hiesinger for his efforts, but they are still seething at the poor management and...

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