ThyssenKrupp will close the railway block

German steelmaker and industrial conglomerate ThyssenKrupp AG halted the sale of its railroad and construction businesses, failing to attract acceptable buyers. The company that initiated the process of selling its units to GfT Gleistechnik and GfT Bautechnik said that after reviewing bids and negotiating with potential buyers over the past weeks, it has concluded that none of the bids are financially viable.

Instead, ThyssenKrupp will close the railroad production unit and lay off hundreds of employees, but the construction machinery manufacturing facilities will remain. The company's construction equipment business will continue to operate. His block of electric steels will undergo an examination before being sold, while negotiations are ongoing with potential buyer Berco, which makes earthmoving equipment.

The company will close its railway equipment business because there are no growth prospects in the German market and production is under a huge cost burden. This will lead to the closure of workshops and the loss of 260 jobs.

In 2012 and 2013, ThyssenKrupp, together with the Austrian Voestalpine AG (VOE), suffered fines from the German Federal Cartel Office for violating competition rules on the railroad product market. Both are already suffering losses from low steel prices due to slowing demand from the construction and automotive industries.

The company had to pay 191 million euros in fines. In November 2013, it received compensation from the state railway operator Deutsche Bahn AG, and Voestalpine closed the railway equipment business in Germany last year.