Salzgitter Trims Management Board in Revamp Amid Crisis
Stock Chart for Salzgitter AG (SZG)
Salzgitter AG (SZG), the German steelmaker forecasting a 2013 loss, plans to trim its executive board to regain competitiveness after a slump in demand in Europe drove prices for some of its products below cost.
Salzgitter will reduce the number of board members to three from five when Wolfgang Eging and Heinz Groschke, responsible for energy and trading, retire in January, it said today in a statement. The company will reorganize into five divisions -- flat steel, heavy plate and section steel, energy, trading and technology -- overseen by a new management committee, it said.
The steelmaker, 26.5 percent-owned by the state of Lower Saxony, announced plans in August to cut more than 1,500 jobs as it seeks to save more than 200 million euros ($270 million) a year. It lowered its profit forecast for the third time in nine months on Aug. 5, citing impairments at the Peiner Traeger unit and a “dramatic lack of orders” at its tubes division.
Today’s decision will deliver a “clear and lean management structure,” Salzgitter said in the statement. Together with the staff-reduction program, it will “secure the company’s independence while safeguarding as many jobs as possible.”
Salzgitter has fallen 21 percent this year in Frankfurt trading, while the MDAX Index for medium-sized companies has climbed 26 percent.
To contact the reporter on this story: Angela Cullen in Frankfurt at firstname.lastname@example.org