Corporate restructuring

ThyssenKrupp CEO Guido Kerkhoff may get a splitting headache

Guido Kerkhoff
Judge not, lest ye be judged by new ThyssenKrupp CEO Guido Kerkhoff. Source: DPA

Guido Kerkhoff is racking up air miles these days. Since becoming ThyssenKrupp CEO four weeks ago, he has visited company sites on three continents, explaining to staff why the company will soon split into two entirely separate firms.

Unlike his charismatic predecessors, Kerkhoff is unaccustomed to the spotlight. He projects the image of a modest figure, who enjoys a beer after work and collects Volkswagen camper vans.

Investors and employees are asking whether the new boss has what it takes to lead ThyssenKrupp. “Hard work is not enough,” one senior manager told Handelsblatt: “Kerkhoff has to show real leadership qualities.”

Kerkhoff was previously ThyssenKrupp’s CFO and was not the board’s first choice as CEO. After the resignation of predecessor Heinrich Hiesinger in early July — quickly followed by that of the supervisory board chair — an embarrassingly large number of potential successors turned the job down. So the board eventually decided to make  Kerkhoff’s interim appointment a permanent one.

Born in a small town in Lower Saxony, as a boy Kerkhoff helped out at his parents’ gardening business. But he had bigger ambitions, going on to become the first in his family to graduate from university, where he studied business.

Always adept at reading a balance sheet, his first appointment was as a controller at a regional utility. A year later, he moved to publisher Bertelsmann, a much larger company with a global reach.

Excel as a dating site

Kerkhoff traveled the world for the publishing conglomerate, poring over the accounts of magazine publishers and record companies. Not quite a glamorous position: His closest encounter with fame was sharing an elevator with a well-known hip-hop star. He met his wife, also an accountant, while both were doing due diligence on a Bertelsmann takeover target.

After six years at Bertelsmann, Kerkhoff moved to Deutsche Telekom where he became the right-hand man of CFO Karl-Gerhard Eick. Kerkhoff played the modest foil to his urbane boss, and became known for his remarkable command of financial minutiae.

Even then, associates recognized there was more to Kerkhoff than just a head for figures. Colleagues at Telekom praised his gregarious manner and his deep understanding of company business. He impressed union representatives with his capacity for solving problems.

In 2009, Kerkhoff joined Telekom’s senior management team, given charge of running the company’s Eastern European business. But he was unhappy working with Telekom’s leadership. Luckily, he was rapidly headhunted by ThyssenKrupp, where he became CFO in April 2011.

At the time, the famous but aging company was close to bankruptcy. It had wasted billions on new American steelworks, while a series of cartel and bribery scandals had battered its corporate reputation. But for Kerkhoff, this was precisely the attraction: Where others saw scandal, he saw the possibility to organize change.

Much troubled

But the troubles also attracted an activist investor smelling blood. Cevian Capital is still a key minority shareholder, with an 18 percent stake.

This year was meant to see ThyssenKrupp turn a corner, thanks to the merger of its European steel business with that of Indian competitor Tata. But the resignations of its CEO and chair have left the company in a familiar position — looking to convince investors, and itself, of its stability and future growth prospects.

This is now Kerkhoff’s job. He shrewdly used his interlude as interim CEO to design a new strategy, and convinced investors and trade unions that he was the man to see it through. The board gave its unanimous approval, rewarding him with a five-year contract.

He is aware that the CEO job is quite a different proposition than his previous roles, not least the responsibility to lead from the front. It will not be easy: He must oversee a split into two completely separate entities, ThyssenKrupp Industrial and ThyssenKrupp Materials, while also improving returns for long-suffering investors.

The transformation will take two years to complete, and there is no guarantee of success. “Kerkhoff will need to fight his corner, in order to be taken seriously by staff and shareholders,” one high-ranking manager told Handelsblatt. Above all, he cannot shirk a fight: Costs will have to be cut ruthlessly, and many heads will have to roll.

Martin Murphy covers the steel, car and defense industries for Handelsblatt. Kevin Knitterscheidt covers steel, machinery, and construction. To contact the authors:,

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