Lakshmi Mittal, the Chairman of steel giant ArcelorMittal met French President Francois Hollande in Paris late Tuesday to discuss the fate of the company’s steel plant in Florange, north-eastern France. Although no details of the meeting have yet been released Mr Hollande indicated earlier, during a joint press conference with the visiting Prime Minister of Belgium, that he would bring up the possible “temporary public takeover” of the plant. Mr Mittal has shut down the plant’s blast furnaces, affecting 630 of the 2800 jobs.
There has been a furore in France ever since the Minister for Industrial Renewal Arnaud Montebourg said on Monday that the country could do without Mr Mittal. “When I say we do not want the Mittals in France I mean we no longer want Mittal’s methods here. Methods that fail to respect commitments made, methods of blackmail and threats. The problem in Florange is not blast furnaces; it is Mittal”.
Mr Montebourg said the French state could “temporarily nationalise” the steel plant in Florange, because Mr Mittal had failed to honour his promise not to cut jobs, shift investment away from France or close down plants in the country. Mr Mittal has closed one plant and shut down blast furnaces in two other plants in France. He says that side of the business is not profitable. In the past Mr Mittal has indicated that any attempts to force him to sell the entire plant at Florange, not just the loss-making blast furnaces “could affect” his entire operation in France. Nationalisation could prompt him to withdraw from France altogether. Mr Mittal employs 20,000 persons in France.
Earlier on Tuesday, a group of 50 Socialist MPs decided to form a group in support of Montebourg’s idea of a “temporary nationalisation” of the Florange plant. “It is the future of the entire steel industry we are talking about. Mr Mittal must agree to re-start the blast furnaces or agree to sell off the entire plant. He cannot continue to hold on to the profit making part of the business because who would want to buy just the loss making bits?” MP Philippe Doucet told The Hindu.
Walter Brocoli of the FO (Workers’ Force) trade union echoed his words: “We fully back Mr Montebourg’s plan. We have to save jobs, not allow irresponsible bosses like Mr Mittal who are interested only in financial gains ruin the livelihood of the workers,” he told this correspondent. “Mr Mittal keeps blackmailing us, threatening to leave France altogether if he is forced to sell the Florange plant. But he makes a packet of money in France and money is never far from his concerns. He will certainly not leave. He makes too much money in France and his threats are empty.
Sources close to the negotiations indicated that Mr Hollande read chapter and verse to Mr Mittal during their half hour meeting. However, the President has little margin for manoeuvre. If France decides to nationalise, Mr Mittal could well pull up stumps and quit France, leaving hundreds of job losses in his wake.
Last October Mr Mittal had promised Mr Hollande that he would find a buyer for the site. But he does not wish to sell the entire plant, just the blast furnaces, which he has shut down for good because demand for steel has slumped worldwide. The deadline set to find a new buyer for the blast furnaces expires on Saturday. Mr Mittal has refused to sell the rest of the plant and the French government is making an all out effort to convince him to change his mind.
Mr Montebourg’s attack on Mittal has set alarm bells ringing amid free market circles. Olivier Chevalier, a steel industry executive in France told The Hindu: The steel industry in France is bound to die out, just the way the coal and the mining industry did. There is not a single mine left in France today. Arcelor was in a pretty sorry state when Mr Mittal launched his takeover bid in 2006. The minister’s declarations are bound to give investors all the wrong signals – that France is not a place where a businessman can function without fear of government intervention.”
His views were echoed by Laurence Parisot, the president of MEDEF, the French businessmen’s organisation. She called Arnaud Montebourg from China where she is travelling and told him to stop making irresponsible and provocative statements, the newspaper Le Monde reported.
Prime Minister Jean-Marc Ayrault also tried to calm troubled waters. “Mittal is a very important group for France. At the same time, the French government pays particular attention to our country’s industrial sites. It’s important that we can have frank discussions with the company, and it’s important that companies keep their promises. We need to come up with a solution, not just throw ideas around,” he said.