Employees

Our employees are critical to the success and development of Salzgitter AG. They shape the future of the Group. We have therefore made it our goal to ensure that our employees have a working environment which is motivating, healthy and conducive to performance, a task gaining importance against the background of demographic change because well-qualified staff and managers, particularly with scientific and/or technical backgrounds, are becoming increasingly rare. Moreover, a globalized labor market has exacerbated competition. The personnel policy of the Salzgitter Group is based on sustainability and therefore not only takes account of changes at the operational level but also in society.

Workforce Development: Number of Employees on the Decline

As per December 31, 2009, the Group’s core workforce numbered 23,378 employees, which is a decline of 2.2 % as against the previous year. The following companies with an overall workforce of 215 people were consolidated for the first time: Salzgitter Mannesmann Stahlhandel s.r.o., Prague (SMCZ), Berg Spiral Pipe Corporation Wilmington, USA (BSPM) and Salzgitter Hydroforming GmbH & Co. KG, Crimmitschau (SZHF). The number of trainees came to 1,484 (+18).

Core workforce

Core workforce¹⁾	31/12/2009	31/12/2008	Change
Group	23,378	23,915	– 537
of which Steel Division	6,816	6,949	– 133
of which Trading Division	1,931	1,983	– 52
of which Tubes Division	5,791	5,929	– 138
of which Services Division	4,181	4,003	178
of which Technology Division	4,513	4,907	– 394
of which Holding	146	144	2

1) Core workforce excluding executive body members, non-active age-related part-time employees, non-active workforce members and trainees

The number of people employed by the Group fell by 1,233 (of which core workforce: – 678, staff outsourced [temps]: – 555).

Core Workforce and Outsourced Staff (temps)

Personnel Policy and the Global Economic Crisis

In the period under review our personnel policy stood under the influence of the global economic crisis. Swiftly effective measures were needed to contain the negative consequences for the Salzgitter Group to the greatest extent possible. We nonetheless continued to pursue our overriding ”GO – Generation Campaign 2025 of Salzgitter AG” personnel strategy, which is geared to the long term. This strategy has made a decisive contribution to securing our competitive edge and will continue to do so in the future.

As a response to developments in the economy in the financial year 2009 we fully exploited all available means of adapting under the personnel policy. Extra hours paid were reduced to an absolute minimum, and working time and overtime accounts were instrumental in responding appropriately to fluctuations in capacity utilization. The agreements made on working time accounts as part of the collective bargaining process proved their effectiveness in practice.

Time Accounts and Overtime Accounts (adjusted for first-time consolidation/deconsolidation)

Short-time work contributed significantly to securing jobs in many Group companies. At the peak, nearly 9,000 employees were affected to varying degrees in 2009. This measure ranged from 5 to 15 days of short-time work a month. Changes in the legal framework governing short-time work proved expedient.

Employees in Short-time Work

As in the past, all adjustments made to personnel were carried out in a socially responsible manner; mainly through deploying the tool of ”age-related part-time work”. The Executive Board and the Group’s Works Council laid down the general conditions for the financing of age-related part-time work from the Demography Fund set up in 2007. Against the backdrop of the current situation and in view of the expiry of measures by the German Federal Employment Agency designed to promote semi-retirement, this form of financing was first used as part of the ”2009 Special Program”. In the fall of 2009, 401 employees began their age-related part-time phase, which was partly financed from the Demography Fund.

Collective Wage Agreements

In conjunction with the collective wage agreement signed on April 1, 2009, which covers the steel industry and which is applicable to around half the entire workforce of the Group, an agreement was made to retain age-related part-time work. The costs will now be borne by the individual companies.

In 2009, there was no collectively agreed wage increase apart from a non-recurrent payment of € 350.00. The collectively agreed wage levels are nonetheless set to rise by 2 % from January 1, 2010 onwards. Given the term of the collective agreement (which runs from April 2009 to August 2010), this will entail an additional burden for the Group of € 10.1 million. In addition, trained persons in a minimum 28-hour week employment will be hired for 24 months instead of formerly 12 months.

An increase in real wages and salaries (collectively agreed rates and supplements above the union rates) was agreed in the Trading Division as follows: 1.75 % from October 1, 2009, and 1.25 % from June 1, 2010, with a term through to July 31, 2011.

Sustainable Personnel Policy

The ”GO – Generation Campaign 2025 of Salzgitter AG”, a project initiated in 2005, is currently in the implementation phase. The 60 individual measures developed under this project enable the Group to respond appropriately to the challenges of demographic change, thereby making a contribution to the future viability of the Group.

Personnel development conferences take place regularly where the introduction and implementation of the measures are discussed, agreed and followed up by the Executive board members responsible for personnel and the managing directors, together with the personnel managers appointed by the Group companies.

Occupational Safety

Occupational safety is a high-priority goal of Salzgitter AG. We are committed to our obligation and feel responsible for the welfare and health of all our employees. We are pleased to state that the number of reportable accidents (without the Technology Division) has fallen by around 33.5 % in comparison to 2008. Regrettably, though, there were still a number of accidents recorded. In response to three tragic events which took place in our rail operations at the start of the year at the Salzgitter location, we have carefully checked all safety measures set in place at Verkehrsbetriebe Peine-Salzgitter GmbH (VPS). The outcome showed that our employees were insufficiently aware of the extensive safety measures. To eliminate information deficits and for the purpose of making express reference to the special hazards of rail operations, employees in this area now undergo further qualification through the ”Security Offensive 2009”.

Communication

The Group Forum of Salzgitter AG took place on May 11 and 12 in the Hanover Congress Center under the motto of ”STARK BLEIBEN” (staying strong). On the first day, a total of 307 board members, managing directors and senior executives from all Group companies in Germany and abroad listened attentively to the explanations of the Executive Board on the general situation of the Group and the Group’s financial and personnel policies. On the second day there were presentations on topics from the Steel, Tubes, Trading and Technology divisions. A highlight of the event eagerly awaited was the guest speech by the former Federal Chancellor Gerhard Schröder on ”Germany’s Future in International Business”.

For more detailed information on the topic of ”Employees” we make reference to Section 8 of our Corporate Responsibility Report published in February 2010.

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