The executive board of the German-based ThyssenKrupp AG voted Thursday, May 5, to divest more than $14 billion in assets.
Among the 35,000 workers who may be affected by the divestment are the nearly 3,000 employees of ThyssenKrupp Waupaca.
In a May 6 statement, ThyssenKrupp AG said the corporation planned “extensive measures regarding the further strategic development of the group.” The company will focus its efforts on engineering and automotive sectors.
The executive board will present its strategic plan to its supervisory board on Friday, May 13.
Waupaca Foundry was started in 1955. The company built and expanded into three Waupaca facilities prior to 1969.
The Budd Company, headquartered in Troy, Mich., purchased Waupaca Foundry in 1968. In 1978, Thyssen, a German-based company, acquired The Budd Company.
From 1974 to 2001, Waupaca Foundry built three more plants in Marinette, Wis.; Tell City, Ind.; and Etowah, Tenn.
In 1999, Thyssen and Krupp merged to form ThyssenKrupp. The Waupaca Foundry changed its name to ThyssenKrupp Waupaca in 2002.
ThyssenKrupp Waupaca has annual revenues of more than $1.2 billion.
In the fiscal year that ended Sept. 30, 2010, ThyssenKrupp AG reported over $60 billion in revenues and approximately 177,000 employees worldwide.
ThyssenKrupp AG is also planning to sell off much of its steel-making capacity in North and South America. It has recently constructed plants in Brazil and Alabama.
The Wall Street Journal reported May 6 that the German company’s comprehensive reorganization “should help increase the company’s profitability and reduce debt.”
According to financial reports, ThyssenKrupp AG’s debt rose from $5.4 billion at the end of September 2010 to $7.7 billion at the end of December 2010. The increased borrowing is associated with the new steel plants in the U.S. and in Brazil.
The Financial Times reported that the company has not been able “to take full advantage of the rapid increase in German industrial production, 11 percent higher in March this year than last. Years of overinvestment in the steel industry have damped returns.”
ThyssenKrupp AG shares rose 7 percent Friday, May 6, as a result of its announcement to spinoff or sell more than 20 percent of its assets.
Also on Friday, German President Christian Wulff canceled a scheduled visit for Saturday at ThyssenKrupp’s new steel plant in Rio de Janeiro, Brazil. Wulff said the cancellation was due to the “suddenly announced far-reaching restructuring in ThyssenKrupp and its unforeseeable consequences,” according to Deutsche Welle, Germany’s international broadcaster.