German industrial conglomerate Thyssenkrupp lost its blue-chip status recently and suffered merger setbacks in recent months, and now it may let go its CEO Guido Kerkhoff. 

In May, Thyssenkrupp had shared its plan to scrap merger plans with Tata and said it would slash 6,000 jobs worldwide in a structural shakeup. Since then the company has been trying to restructure itself by selling or listing all or parts of its elevators unit, its most profitable business. The firm is trying to rake in cash to fund pension liabilities and a turnaround of its other units. However, Thyssenkrupp has not made much progress till now and the implementation of the strategy has also failed to create momentum.

As the company fails to make much progress, the board doubts Kerkhoff’s leadership. They are not able to believe in Kerkhoff’s ability to turn around the group, as the company's shares fell 40 percent since he took over as CEO in July 2018, hitting their lowest levels since 2003 last month.

As per a company statement, supervisory board executive and personnel committees have recommended "to start negotiations to end the board mandate of Guido Kerkhoff shortly". While the board is still searching for a new leader to help the firm get back on track, Kerkhoff is set to be replaced on an interim basis by Supervisory Board Chairwoman Martina Merz. 

“We expect that the new leadership will speed up the transformation process that Thyssenkrupp so urgently needs, and improve the quality of implementation. We are confident that Thyssenkrupp will now finally get a crystal clear strategy and a well-defined plan of action,” said Lars Foerberg, founding partner of Thyssenkrupp’s second-largest shareholder, Cevian. 

The discussions, however, still continue and there will be more clarity once the Supervisory Board reviews and decides on the recommendations of the executive committee and the personnel committee in an extraordinary meeting shortly.

Kerkhoff had joined Thyssenkrupp as finance chief in 2011, and he took over as CEO last year after the conglomerate’s former CEO and chairman resigned due to mounting investor pressure over strategic issues. It seems like the history is to repeat, as Kerkhoff resigns owing to the continued struggles of the german firm. The board should also look into other factors that might be leading to troubles for Thyssenkrupp, or is leadership alone to be blamed?

Image Credits: Thyssenkrupp