ThyssenKrupp says it wants to divest stainless unit, effects on Calvert, Ala., plant unclear

MOBILE, Ala. -- ThyssenKrupp AG said Thursday that it's going to look again at divesting its stainless steel unit, a move that could leave two owners sharing the $5 billion facility that Germany's largest steelmaker has built in Calvert.
"The separation from ThyssenKrupp will result in an independent European market and quality leader within the stainless steel industry, giving stainless the opportunity to develop its competitive position with greater flexibility -- also with regard to potential strategic partnerships," the company said in a statement.
Ulrich Albrecht-Frueh, chief executive officer of Calvert-based ThyssenKrupp Stainless USA, said he wasn't authorized to comment Thursday.
The company's statement was released near midnight in Germany, and officials there could not be reached.
The announcement, which also included plans to sell or reorganize some auto-parts units, is the first big move under Heinrich Hiesinger's leadership of ThyssenKrupp.
Overall, the units involved had 10 million euros ($14.6 billion) in sales last year and 35,000 workers worldwide.
It wasn't clear if the announcement would have any effect on the completion of the stainless part of the Calvert complex.
The centerpiece of the stainless section is a melt shop, which would turn scrap into new stainless steel. ThyssenKrupp delayed construction of the melt shop because of the recession and a company cash crunch, but decided last fall to go ahead, and is now sprinting toward a late 2012 opening date.
Within ThyssenKrupp, the stainless business unit is already separately managed from carbon steel.
At the Calvert complex, stainless and carbon steel operations share the hot strip mill, the first step in processing steel, along with support units such as a barge dock and water treatment.
The stainless unit has almost 400 employees now, with a target of 900. The larger carbon unit has 1,350 people, headed toward a target of 1,800 employees.
Sales and profit can fluctuate widely for stainless operations, in part because stainless steel includes high-value ingredients such as nickel.
The European stainless steel business is burdened with overcapacity and ThyssenKrupp had previously investigated mergers with other stainless producers, though as Europe's largest stainless manufacturer, antitrust issues could have arisen.
ThyssenKrupp gave up on merger talks and said it would work on its own to improve profits. In December, the firm said it would close a stainless cold rolling mill in Benrath, Germany, and invest more than 100 million euros to move it to a larger complex in Krefeld, Germany.
The business in North America is healthier, although ThyssenKrupp's competitors have voiced fear that its big melt shop in Calvert could trigger overcapacity.
The world's largest steelmaker, ArcelorMittal, spun off its stainless business this year into a new firm called Aperam, saying it believed investors would put more value on the stainless unit when alone.
ThyssenKrupp's stainless unit, with 11,000 employees worldwide, had 5.9 billion euros ($8.6 billion) in sales in the 2009-2010 year. It lost 121 million euros ($176 million) last year, but that was a big improvement from the 926 million euros it lost in 2008-2009.