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French govt in ‘tug-of-war’ with steel giant

Latest update : 2012-09-27

The French government on Thursday demanded that steel giant ArcelorMitttal restart or sell idled steel furnaces at a plant in France’s blighted industrial north-eastern region, openly declaring itself in “conflict” with the steel maker.

The French government urged ArcelorMittal on Thursday to restart idled blast furnaces at a plant in northeastern France or put them up for sale, declaring itself in a “tug-of-war” with the steel giant over their fate.

President François Hollande held talks with ArcelorMittal’s chief executive after a media report that the firm will shut the furnaces at a plant which became symbolic of France’s industrial decline.

Speaking to angry workers at the plant in the town of Florange, Industry Minister Arnaud Montebourg said Hollande had called on Lakshmi Mittal to invest 150 million euros in the site or sell the furnaces.

“We are now in a conflict with ArcelorMittal,” Montebourg said in a speech frequently interrupted by jeers. “It’s a difficult tug-of-war.”

“The French government has at the highest level insisted ... that we want the restart of these two furnaces at Florange that have been idled for 14 months,” he added.

The furnaces - where iron is extracted from ore for use in steel production - employ about 550 of the 2,800 workers at the Florange plant, the rest of which is operational.

Earlier, Liberation daily said the government was offering to buy the two furnaces - idled since last year due to weak international demand - for a single euro so that it could then seek a company willing to operate them.

Montebourg did not make reference to any such offer in his speech. Earlier his spokeswoman confirmed talks were taking place with the company but declined to comment on their content.

An ArcelorMittal spokesman said it would not comment on Florange until after a meeting with unions on Monday to discuss its sites in northern and eastern France.

Industrial decline

In a blow to Hollande, unemployment passed the psychological 3 million mark in August, its highest level since June 1999, figures showed on Wednesday.

The Florange plant is the last survivor in the once-bustling northeastern steel region after the neighbouring ArcelorMittal mill of Gandrange was wound down, despite former president Nicolas Sarkozy’s promise to protect it.

Lorraine’s days as an industrial heartland based on its rich coal and iron ore deposits are long over, but lightweight steelmaking has continued at Florange to supply car factories in France and nearby Germany. This demand has fallen as struggling French carmakers such as Peugeot cut production and jobs.

Hollande, who has vowed to revive an industrial sector which lost 750,000 jobs in the past decade, visited Florange during his successful campaign and promised to keep it open.

The president, whose popularity has dived since the May election, has staked his reputation on reversing the upward trend in unemployment by the end of 2013 using state-sponsored job plans, industrial investment and labour market reforms.

A government report in July concluded that Florange remained economically viable as a steel-producing site, provided it received appropriate modernisation and investment.

ArcelorMittal is the leading supplier of steel products in all major markets including automotive, construction, household appliances and packaging. It operates in 60 countries and employs about 260,000 people worldwide.

It has temporarily closed several sites in Europe, including France, Belgium and Spain.

(France24 with wires)

Date created : 2012-09-27


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