ThyssenKrupp to close German rail subsidiary, cut 260 jobs

German steel group ThyssenKrupp is to close down its rail subsidiary GfT Gleistechnik, resulting in the loss of around 260 jobs, the company said on Tuesday March 11.

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The Essen-based company had intended to sell the unit, but has now decided to discontinue the operations after disappointing purchasing bids.

“After an intensive exploratory phase, purchase bids have been reviewed and talks held with potential buyers over the past few weeks,” ThyssenKrupp said.

“None of the bids met the financial expectations of ThyssenKrupp,” the group added.

GfT Gleistechnik’s performance has been badly affected by the cartel case involving Germany’s Deutsche Bahn, high costs and no growth prospects, according to ThyssenKrupp. 

Management is aiming to close down operations by the end of the group’s 2014/2015 fiscal year, which ends on September 30, and has started negotiations with workers representatives.

“Unfortunately, we see no realistic chance of the railway equipment business making a value-adding contribution to the group’s earnings in the long term,” ThyssenKrupp’s materials services division board member Klaus Keysberg said.

The German steel group has also decided to end the sale process for its profit-making construction equipment subsidiary Bautechnik, which it will continue to operate within the materials services division.