Paris: Steel giant ArcelorMittal and the French
government have reached an agreement on the persisting deadlock over the
company's plans to shut down two furnaces in Florange and the government's nationalization
plan of the site.
French Prime Minister Bernard Ayrault announced on Friday
night that the government had shelved its nationalization plan. In return,
ArcelorMittal chief Lakshmi Mittal has promised to invest 180 million euros at
the Florange site over the then five years and agreed to retain the 629
workers.
"Since its installation, this government has worked
without respite so that the industrial site in Florange continues to survive
and extend and to make sure that the workers are protected. The government had
three aims - no layoffs, significant investment in the site and the preservation
of the furnace of Florange to prepare for a future industrial project,
ULCOS," Mr Ayrault said in Paris.
"ArcelorMittal have accepted the stated conditions.
Tonight I can announce there will be no layoffs at Florange. The Mittal group
has committed to investing at least 180 million euros in Florange over the next
five years," he said.
ArcelorMittal wanted to shut down two furnaces of the
site that were not profitable, triggering a huge controversy in France.
France's Industrial revival Minister Arnaud Montebourg had threatened to
nationalise the site until a new buyer was found. He also accused Mr Mittal of
lying, saying he does not respect France and should therefore leave the
country.
Mr Mittal gave in to the strain that was building up
before the Friday night deadline for closure. The French government wanted to
find a buyer for the Florange site but said ArcelorMittal would have to give up
the entire site, including the profitable part and not just the two furnaces
they wanted to shut down.
Finally, a compromise was reached between ArcelorMittal
and the French governement. This will be seen as a political triumph for
President Francois Hollande, who had promised to save the workers' jobs. This
is perhaps not a big loss for Mr Mittal, given that two thirds of his European
business is based in France. Much of it is also profitable due to its proximity
to the German auto industry.
"In France people tend to believe that the point of
view of the state has to prevail against private interest. We are in a country
where we have a statist culture. The other problem is that Mr Mittal made a lot
of promises when he bought Arcelor. One of them was that he would make European
management in charge of European interests and he didn't stick to his
promise," said French economist Elie Cohen.
The workers at Florange, however, are not celebrating.
They say they do not trust Mr Mittal's plan and are disappointed that there
will be no nationalization of the site. This despite assurances from Mr Mittal
that 180 million euros will be invested and no jobs will be lost.
The sites ArcelorMittal have shutdown in Belgium and
France so far were part of the group's strategy to tackle losses from
over-capacity and low demand in the European steel industry. However,
ArcelorMittal are likely to see this as an investment to boost its image in
France.
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