In an announcement, thyssenkrupp said that the agreement with the IG Metall union includes promises that most of thyssenkrupp’s German facilities would continue to operate throughout the length of the eight-year deal. However, the ultimate fate of three operating units will hinge on a profitability review to be conducted at the end of 2020. 

thyssenkrupp also said the agreement contains promises that investments would continue in its plants, with the goal being to allocate EUR400 million annually for upgrades.

"The (agreement) represents a key prerequisite for meeting our strategic objectives, and, at the same time, satisfying the interests of our employees. The settlement therefore corresponds with our understanding of corporate responsibility," said thyssenkrupp chief executive Heinrich Hiesinger. 

"It gives us the ability to achieve the economic advantages and synergies forecast for the joint venture and so create value as planned for thyssenkrupp and its shareholders. At the same time we are providing the employees of the joint venture with good prospects for the future and securing jobs."

thyssenkrupp and Tata Steel Europe reached an agreement in September to combine steel operations through a joint venture, creating a company that would be Europe’s second-largest steelmaker behind ArcelorMittal.

The labor agreement is key to allowing the deal to proceed. Union members are to vote on the agreement in January, according to the Reuters news service.