Increasing calls for Montebourg to pipe down, making a win-win situation difficult to obtain

The French Prime Minister Jean-Marc Ayrault late on Friday announced his government had reached an agreement with Lakshmi Mittal, Chairman of steel giant ArcelorMittal under which the government would not nationalise the company’s plant in Florange. In return Mr Mittal agreed to invest 180 million Euros over the next five years to reinforce the “cold steel” part of the plant’s activity.

“There will not be any redundancy in Florange. ArcelorMittal has agreed to invest 180 million euros over the next five years in the plant and agreed to all my proposals,” Mr Ayrault told journalists in an announcement just hours before the midnight deadline on Friday.

The Prime Minister without mentioning Arnaud Montebourg said plans to nationalise the plant has been shelved as of last Wednesday, the day when Mr Montebourg was still talking of a forcible takeover of the plant by the French state. This decision is a complete disavowal of the Minister for Industrial Renewal who has come in for sharp criticism from business and political leaders in france for his boorish and insulting remarks against Mr Mittal.

It was a face-saving win-win outcome for both parties. As The Hindu had indicated earlier, the two parties agreed to opt for cleaner, greener technology for the Florange site which will receive ULCOS (Ultra Low Carbon Dioxide Steelmaking) with help from local authorities and the European Union.

This is a European research programme that aims to perfect Carbon Capture and Sequestration technology. This will help clean up the currently highly polluting “liquid” phase of steel making when iron or is smelted in gigantic blast furnaces to make liquid steel. In addition to the 180 million euros spread over 5 years that Mr Mittal’s company will provide, additional funding will come from local and regional institutions and the European Union. Mr Mittal has scored a major point. The blast furnaces will remain shut until the ULCOS project is ready to go on stream but he has promised to keep them in good order for the date, some 18 months away, when the experimental programme starts functioning.

“The government had 3 principal objectives: No redundancies, the maintance of the blast furnaces in view of clean energy and the adoption of the ULCOS plan which will guarantee respect for the environment and reduced use of energy,” Mr Ayrault said, adding that this project could become a model for industrial revival in France.

Union workers who had believed Mr Montebourg’s promises of a temporary forced nationalisation to be followed by a buy out by another private entrepreneur were furious at the news.

Lionel Burrielo of the CGT trade union described the agreement as “a betrayal” by the government. “We do not want Mr Mittal. We have no faith in his promises and we feel the government has let go. This is a huge disappointment and the unions are going to meet in the next few days to plan out next strategy. Our message is clear : We do not want Mittal. They have made fools of us tonight. The government has clearly let us down, sold us down the drain.”

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