Arcelormittal welcomes ‘good deal’

French unions rage at Hollande

PARIS, Dec 1, (AFP): The world’s top steelmaker ArcelorMittal welcomed Saturday a deal over the future of one of its plants that the French government had threatened to nationalise.

The dispute over closing blast furnaces at the Florange plant had risked damaging France’s image among investors, with a virulent attack by a minister on the company owned by Indian-born steel tycoon Lakshmi Mittal.

“It is positive that we reached an agreement on the future of our activities at Florange,” said ArcelorMittal executive Henri Blaffart.

“In the context of the current economic environment, it’s a good agreement.”

French Prime Minister Jean-Marc Ayrault announced late Friday a deal under which ArcelorMittal had committed to invest at least 180 million euros ($234 million) over the next five years at the Florange site in northeastern France.

The government and the steelmaker had waged high-stake brinkmanship for weeks over the fate of two blast furnaces that ArcelorMittal wanted to shut for good given a slump in demand for low-end steel products.

ArcelorMittal had given the French government until Dec 1 to find a buyer for the blast furnaces or said it would begin laying off around 630 employees.

The French government had threatened to nationalise the entire site, which contains facilities to produce higher-end products that ArcelorMittal wanted to keep, as Paris said it couldn’t find a buyer for just the furnaces.

Ayrault said under the deal the two blast furnaces ArcelorMittal had closed would be left intact until EU financing was confirmed for an existing carboncapture project and that ArcelorMittal agreed not to proceed with forced job cuts.

ArcelorMittal made no comment about the carbon-capture project in its statement on Saturday.

Investment

It confirmed the 180 million euros in investment would be made in higherend steel production, not the blast furnaces.

ArcelorMittal had made it clear that any nationalisation of the plant would cast doubt on the future of all its operations in France, where it employs 20,000 people.

Meanwhile, French trade unions accused President Francois Hollande of betrayal on Saturday after his government backed away from a threat to nationalise ArcelorMittal’s Florange steelworks.

The Socialist government said on Friday it had won promises from ArcelorMittal to avoid forced redundancies and inject 180 million euros to develop the Florange plant, meaning it would no longer have to take over the site.

Hollande came to office promising to create jobs and keep open the two furnaces at the site in northern France which ArcelorMittal says are not viable in a European steel sector suffering over-capacity.

ArcelorMittal confirmed the details of the deal on Saturday, saying it would negotiate a voluntary redundancy deal with unions.

Workers are angry the furnaces will remain idled rather than reopened and expressed doubt over ArcelorMittal’s promise to offer alternative posts or early retirement packages for the 630 workers affected.

“We’re on a war footing,” Edouard Martin, head of union CFDT’s Florange chapter, told the commercial Telenetwork.

“We’ve seen Mr (Lakshmi) Mittal’s pledges in the past and what has become of them — nothing — so we’re not going to let anything pass without a fight.”

Martin said the union had been a “nightmare” for former president Nicolas Sarkozy in the past over his jobs record, which analysts say was a factor in his election defeat in May, and could soon become one for Hollande.

ArcelorMittal rejects accusations it has broken promises in a country where it employs 20,000 over several sites.