Voestalpine is to merge its automotive division with its tubes and steel sections arm to make its corporate structure more efficient and help growth, the Austrian steel producer announced on December 15.
"Merging the two divisions will generate a number of synergy effects," it said, adding it would "provide significant momentum for further growth in these particular sectors that have excellent future prospects."
The merger will reduce Voestalpine's divisions from five to four, but company spokesman Gerhard Kuerner said there was "no discussion or plan about reduction of people."
Mr. Kuerner said it made sense to merge the divisions as they had the same kind of research and development as well as customers - in the automobile and energy sectors - while they made different products and were strong in different markets.
In November, Voestalpine said its full-year operating profit could fall 10 percent year on year as the debt crisis and troubles in the financial sector hit demand.
Voestalpine has cut steel capacity by 10 percent and said in November it would decide in early January whether other output adjustments might be needed for the coming quarters.