German Union Blindsided by Kone's Mega-Deal

The German trade union IG Metall has expressed shock and anger following the announcement of Kone Corporation's massive acquisition of TK Elevator. Knut Giesler, the regional director of IG Metall, stated that the union was completely blindsided by the deal, which significantly impacts German workers. Giesler, who also serves as the deputy chairman of TK Elevator's supervisory board, views this lack of communication as a severe breach of trust between employers and employees.

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This announcement greatly astonishes me.

"This announcement greatly astonishes me," Giesler told Reuters, emphasizing the union's demand for an extraordinary supervisory board meeting within seven days to receive detailed information about the next steps. The acquisition, valued at 29.4 billion euros, is set to make Kone the global leader in the elevator market. However, IG Metall fears that TK Elevator's workforce of over 50,000 employees worldwide, including around half who are maintenance technicians, could be left vulnerable, potentially leading to layoffs.

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From this reason, we demand the supervisory board to an extraordinary meeting without delay within seven days, so that we get detailed information about the next steps.

Historically, German trade unions have played a crucial role in shaping corporate decisions through their representation on supervisory boards. This lack of consultation in such a significant deal undermines that established practice. While TK Elevator issued a diplomatic statement acknowledging employee concerns, Giesler's strong reaction reflects a deep-seated anxiety within the German labor movement about the potential consequences of such large-scale mergers. The union's swift and forceful response underscores their commitment to protecting workers' rights and ensuring transparency in corporate transactions, especially when they involve substantial restructuring and potential job losses.

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When a strategic investor buys its competitor, it is always a great risk for the employees. Synergy benefits are usually taken from the employees' backs.