Thyssen shake-up prompts German leader to change plans

May 7, 2011, 3:45 GMT

Sao Paulo - German President Christian Wulff cancelled a planned visit on Saturday to the steelworks of German conglomerate ThyssenKrupp AG in Rio de Janeiro after the company announced a major cost-cutting shake-up.

Wulff was to have ended his Latin American tour Saturday with a visit to the new ThyssenKrupp steel plant in Rio de Janeiro, where he was to have been joined by ThyssenKrupp's new head Heinrich Hiesinger.

But Wulff late Friday cancelled the plans, referring to the 'far- reaching restructuring in ThyssenKrupp and its unforeseeable consequences.'

It was also learned that Wulff had not been informed ahead of time about the announcement of the huge cutbacks, prompting worry that the shake-up would have become a vocal and diplomatic issue during his visit to the plant.

Germany's largest steelworks announced late Thursday in Essen, Germany, that its cost-saving programme would include divestments of branches that produce one-quarter of its income and employ 35,000 of its global 177,000 workers.

ThyssenKrupp's 8.3-billion-dollar investment in the new Rio steel plant represents the largest German outlay in Latin America in the past decade.

Since its opening in the summer of 2010, the factory has twice hit the headlines over alleged environmental violations. Wulff's visit had been intended to give support to the success of the venture.

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