German elevator business Thyssenkrupp has announced plans to split up its steel and industrial units.
The new structure will include Thyssenkrupp Industrials, which will manage its elevator business, and Thyssenkrupp Steel. There will be no job cuts as a result of the split, but the decision will make both companies “leaner, faster, and better”, Thyssenkrupp chief executive officer, Guido Kerkhof, said.
The board of directors at each company will be reduced to three people. The make-up of both teams will be decided in spring 2019, with a financial structure, brand identity, and strategy to be agreed in May. Both companies will begin operations in October 2019.
Kerkhoff said the decision to split the German giant into two “will create strategic clarity and enable the businesses to develop more dynamically”.
He added: “The new set-up is tailored to business requirements and reflects the different market logics. Both Thyssenkrupps will become leaner, faster, and better.”
The future leadership structure of Thyssenkrupp Industrials will have what the company described as a “differentiated model”, with operations relating to recruitment, talent management, and innovation all being centralised. This unit will manage the company's elevator, automotive, and plant engineering businesses.
Thyssenkrupp Materials, meanwhile, have a leaner hierarchy due to the diverse nature of the businesses within the division.
News of the restructure comes after the company’s profit increased to $164m in the first quarter of its 2018/19 fiscal year. The cost of simplifying its corporate structure will be “significantly outweighed” by its forecast for income growth in 2019, largely driven by Europe and the US markets.