DUESSELDORF/FRANKFURT - The German government must swiftly decide on whether it is prepared to take a stake in Thyssenkrupp's ailing steel business, one of the firm's labour leader said, adding steel remained a vital product for the country's car sector.

"Steel is anything but dead," Tekin Nasikkol, who chairs the works council of Thyssenkrupp's steel unit and is on the conglomerate's supervisory board, told Reuters. "I believe a government stake is the right response to the crisis."

Nasikkol echoed a demand by IG Metall, Germany's most powerful union, for the state to take a stake in the business, which is under pressure from cheap Chinese imports, a weak car market and the coronavirus pandemic.

His comments also come amid fears over whether efforts by Germany to contain the economic impact of the coronavirus crisis preserve jobs by creating a generation of debt-laden "zombie" firms with no real future. 

"We're not a zombie company. Despite bad management we have been able to pass on billions to the group over the past 10 years," Nasikkol said.

He said a quick commitment by the government was needed, adding it would have to be decided in a next step whether Berlin or the state of North Rhine-Westphalia, where Thyssenkrupp is based, would provide the bailout.

"We need a decision on what happens next before Christmas," Nasikkol said, adding a national steel summit scheduled for Dec. 11 would provide a good opportunity.

The government has said that taking a stake was not the right response.

Thyssenkrupp Steel, which posted a nine-month operating loss of about 700 million euros ($820 million), might also seek tie-ups with rivals such as Tata Steel Salzgitter and SSAB, sources said.

But barriers for such a move are high as most peers are barely turning a profit themselves, they said.

"I have no knowledge of a fully developed concept for a partnership with another company," Nasikkol said.

($1 = 0.8540 euros)

(Editing by Maria Sheahan) ((christoph.steitz@thomsonreuters.com; +49 30 220 133 647; https://twitter.com/reuters_csteitz))