ThyssenKrupp AG Chairman Gerhard Cromme admitted on Friday to making mistakes that contributed to massive losses at the German steelmaker, but didn't bow to pressure from some shareholders to step down.
"If you ask me whether we as a supervisory board could have done things better in the past, then my honest answer is 'yes, we trusted too long, we could have acted sooner'," he told the company's annual shareholders' meeting.
Cromme has come under fire for not stopping a botched multi-billion euro project in the Americas that caused Thyssen to post an annual loss of 4.7 billion euros ($6.3 billion) and pay no dividend for the 2011/12 fiscal year.
The euro zone debt crisis has meanwhile hurt demand for cars and weighed on steel prices, causing a slump in profits at Thyssen's European steel business. The company has 5.8 billion euros of net debt, almost 1.3 times its equity.
Cromme, also chairman of Siemens AG , continued to put most of the blame for the Americas disaster on former executives and said at the meeting that the supervisory board provided Thyssen with stability.
His comments were greeted by a mix of cheers and boos from a lively audience of several thousand, aware that problems had mounted under Cromme and former Chief Executive Ekkehard Schulz.
Shareholders taking to the podium at the AGM called Thyssen's ill-advised investment in the Americas a "disaster" and a sign of a "lack of healthy scepticism" by the board.
"Shareholders are shocked about the development of your firm," Thomas Hechtfischer of shareholder rights group DSW said.
LOOK TO THE FUTURE
Despite shareholder criticism, silver-haired Cromme still looked unlikely to be forced out after 11 years at the helm of Thyssen's supervisory board, because he is backed by Berthold Beitz, the 99-year-old patriarch at its biggest shareholder.
The Alfried Krupp von Bohlen und Halbach Foundation headed by Beitz has 25.3 percent of the voting rights and has the right to name three members to the 20-member supervisory board, one of them being 69-year-old Cromme.
Current CEO Heinrich Hiesinger, brought in from Siemens by Cromme two years ago, axed half of his management board last month and vowed to do away with self-interested "old boy networks" in the company. He pleaded for shareholders to focus on the company's future rather than on past failings.
"If we continue to focus exclusively on the past we will find countless things that were not appropriate by today's standards," he told the meeting.
Hiesinger became the first Thyssen boss to be hired from outside the steel industry when Cromme brought him over from Siemens two years ago.
He has already launched an overhaul to cut the company's exposure to the volatile steel sector and shift investment into higher-margin products and services such as elevators, submarines or automotive components.
Following the sale of assets with annual sales of 10 billion euros, only about 30 percent of Thyssen's business will come from the steel sector.
But the quagmire in the Americas, a fine for fixing the price of rail tracks and a scandal over luxury press trips have countered Hiesinger's attempt to focus on his renewal efforts.
Thyssen invested billions of euros in Steel Americas - comprising two steel mills in Brazil and Alabama - which cost more than expected to set up and have generated losses since.
"You can do everything right and it will still go wrong," Cromme said. "It is what it is."
($1 = 0.7486 euros)
(Editing by Victoria Bryan and David Holmes)