Thyssenkrupp seeks to ease dispute with steel workers

By Tom Käckenhoff

DUESSELDORF, Germany (Reuters) - Thyssenkrupp agreed to intensify talks with its European steel workers in an effort to resolve a dispute over plans to merge the division with Tata Steel and possibly close plants.

Several thousand workers marched in protest at management's plans on Wednesday and labour representatives refused to approve a new management structure, part of a five-year programme to improve the performance of Thyssenkrupp's steel business amid worsening markets.

In an attempt to ease the tension, the two sides have agreed to set up a task force that will discuss the new organisational structure and present a progress report by the end of September, Thyssenkrupp Steel Europe said in a statement on Thursday.

Wilhelm Segerath, who represents the works council on Thyssenkrupp's supervisory board, told Reuters that the group would discuss whether consolidation and restructuring were necessary at all, as well as Thyssenkrupp's compliance with existing labour agreements.

"But we have to keep the antennas tuned. If there is no agreement then there will be further protests," Segerath said.

Thyssenkrupp has its 19th century roots in steelmaking but the sector is now being hit by lacklustre demand and cheap imports from China. Labour representatives fear the group wants to exit the sector at any cost, under pressure from activist investor Cevian, which owns a 15 percent stake in it.

Thyssenkrupp labour leaders have said that any plan to close some plants could go ahead, irrespective of whether there is a merger deal with Tata Steel.

(Writing by Maria Sheahan; Editing by Susan Thomas and Alexander Smith)