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Updated: November 28, 2012 01:57 IST

In French steel town, anger against Mittal, hope for bailout

Vaiju Naravane
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CHEWING OVER THEIR FUTURE: The picture is of workers from an ArcelorMittal plant in Florange at a demonstration in Paris. Photo: AP
CHEWING OVER THEIR FUTURE: The picture is of workers from an ArcelorMittal plant in Florange at a demonstration in Paris. Photo: AP

As the November 30 deadline approaches, workers are expecting that the Indian steel tycoon and the French government can resolve the standoff through negotiations

There is a sea of red and blue trade union jackets on the picket lines outside the gates of the ArcelorMittal plant in Florange, the only business that allows this steel town, some 280 kilometres northeast of Paris to live and survive. The plant employs 2,800 workers, 630 of whom are off work since the plants blast furnaces were closed in October 2011 because of a worldwide slump in demand. Workers are worried that Lakshmi Mittal, Chairman of ArcelorMittal, might just decide to close down the plant altogether. Today the Florange plant and its possible nationalisation by the French state, is all the news and workers at the plant are both angry and hopeful. Angry because unemployment looms large on the horizon. Hopeful because the French state has waded into the dispute with threats of nationalisation, apparently with a view to selling the plant to someone who will commit to restarting the furnaces.

“For over a year now I have been eating Merguez sausages cooked on a spit out here on the picket lines in the cold and rain and I’ve begun to s*** pebbles,” laughs Edouard Martin of the CFDT trade union repeating his favourite joke. Warming his hands around a fire lit inside a large tin drum, he applauds Arnaud Montebourg, French Minister for Industrial Renewal, “with both hands and both feet.”

Frontal attack

Earlier this week the Minister on Monday launched a frontal attack against the Mittal family, which holds a majority shareholding in the company. “We do not want the Mittals here because they have not respected France,” he said. He later clarified that the Mittals’ methods were unacceptable in France — the methods “that fail to respect commitments made, methods of blackmail and threats.” Workers at the factory are watching every tiny development in the conflict like hawks. “Mittal,” said Edouard Martin, the worker outside the factory, “will stop at nothing. He will not restart the blast furnaces at the Dunkerque plant in northern France which were temporarily closed for maintenance and repairs, and there is no question of restarting them here at Florange.”

The results of Mr. Mittal’s meeting with President François Hollande late Tuesday are also eagerly awaited. Last October Mr. Mittal promised Mr. Hollande he would try to find a buyer for the blast furnaces. The deadline runs out on November 30. The State says it has two buyers in line. But they would like to buy the whole plant, not just the blast furnaces. There is a stalemate.

“We produce a good product. Some of the most sophisticated steel comes from this very steel plant where I have worked for the best part of my life. We cannot and will not be put to pasture this way,” Pascal, a 45-year-old steel worker told this correspondent on a grey morning drenched with drizzling, powdery rain.

Despite the weather, the workers have been out demonstrating, calling on the government to accept the recommendations of a report on the plant that advises temporary nationalisation.

“I belong to the FO (Workers’ Force) trade union and we have implored President Hollande to proceed with the nationalisation of the entire Florange plant, the blast furnaces as well as the cold steel activity. This is a strategic activity for France. We cannot allow the steel industry to just die out this way just because an entrepreneur places his own very fat profits before the welfare of the region and the lives of the workers. This industrial basin must not be allowed to perish the way the North was allowed to go when the coal industry died,” said Pascal bitterly.

Some disagreement

His words echo those of Minister Montebourg who once again said that a takeover by the State was a “perfectly acceptable solution.”

The state would of course have to pay the Mittals compensation for the takeover, but it would be a totally legal move given that the factory is registered at the commercial court in Nancy and is, as such, a French company. “We have already found an industrialist prepared to take over the plant and who is willing to enter into an agreement with the State. Which means that the blast furnaces, which Mr. Mittal says he shut down because they were not profitable, are in fact workable and viable,” Mr. Montebourg said.

However, not everyone trade unionist in Florange agrees with Mr. Montebourg’s loudmouth tactics. “I am not sure that Mr. Montebourg’s remarks are helpful or that they go towards resolving the problems at Florange. His remarks threaten the employment of the other 18,000 employees of ArcelorMittal,” said Xavier Le Coq who represents the CGT trade union. Mr. Mittal has threatened to withdraw from France altogether if the French State makes a move to nationalise the Florange plant.

Ever since Mr. Mittal acquired Arcelor, wresting control of the company after a bitter takeover battle, he has had several run-ins with the French government. This is the second time Mr. Mittal has been called in by President Hollande in the space of a few months. Mr. Mittal has stubbornly refused to sell the plant and has equally stubbornly refused to restart its blast furnaces.

The furnaces were shut down in June and October 2011. Of the 2,800 workers in the Florange plant, some 630 work on them. Mr. Mittal says he wishes to reduce overcapacity. On October 1, 2012, he announced the complete and definitive shutdown of the blast furnaces in Florange and assured Mr. Hollande he would find another buyer for them. That promise has not materialised. Prospective buyers wish to acquire the entire plant or not at all and Mittal refuses to sell all of it. The deadline expires on Saturday and ArcelorMittal workers as well as a majority of the French left, which sees the Florange plant as an example and symbol of “predatory” tactics by Mr. Mittal, have made this a rallying cause. In retaliation Mr. Mittal has threatened to shut down all ArcelorMittal plants in France.

Is this a game of high stakes poker or can both parties take steps that are likely to salvage the livelihood of thousands of workers whose major worry is the prospect of unemployment and redundancy?

Mr. Mittal prefers to believe that the ebullient Montebourg is engaged in empty sabre rattling and that better sense will be forthcoming from President Hollande when the two meet on Tuesday. Mr. Mittal, his entourage said, expects to engage in a serious dialogue with the President on the delicate question of the northeastern industrial basin and the future of the steel industry in France. Having gone so far in his calls for the reindustrialisation of France, Mr. Hollande is likely to further damage his popularity if he allows Mr. Mittal to allow the deadline to expire before the deadline for a buyout expires.

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