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France

Hollande warns ArcelorMittal of nationalisation

Text by FRANCE 24

Latest update : 2012-11-27

France’s Socialist President Francois Hollande warned Lakshmi Mittal, the head of steel giant ArcelorMittal, that his French operations in Florange face the prospect of nationalisation in an increasingly bitter dispute with the conglomerate.

French President Francois Hollande said that “nationalisation is part of the subjects of the discussion", moments before talks with ArcelorMittal steel tycoon Lakshmi Mittal Tuesday.

The talks are the latest development in an increasingly heated dispute between France and the steel giant in which a French minister stated that the multinational is no longer welcome in the country.

Hollande's nationalisation warning came as forty lawmakers from his Socialist party said they favoured a temporary takeover by the French state of ArcelorMittal's plant in Florange.

The talks lasted an hour, a French official said, with Mittal - who ranks 21st on the Forbes list of the world's richest people - entering and leaving Hollande's Elysee Palace discreetly.

A presidential statement said Hollande "asked that discussions between the state and the company continue" until a Saturday deadline to find a new investor for the site. The nationalisation talks centre on the group’s perceived unwillingness to sell up under a government plan to save jobs.

A company spokesman said that "talks were ongoing."

It was the second time the two men met since the crisis erupted two months ago.

French ‘revolutionaries’

The increasingly acrimonious debate prompted London Mayor Boris Johnson on Tuesday to wade into the dispute with a distinctly mocking tone.

Johnson, whose popularity has soared in the wake of the London Olympics, joked that France had been taken over by left-wing revolutionaries hell-bent on driving investors out of the country.

"I see the sans-culottes [a nickname for the most radical supporters of France’s 1789 revolution] appear to have captured the government in Paris,” Johnson told businessmen on a trip to India to drum up trade and investment for the UK.

“I have no hesitation in saying here, 'Venez à Londres, mes amis!' [Come to London, my friends]. Come to the business capital of the world.”

The gaff-prone politician urged an audience of businessmen in Delhi to avoid "persecution" in Paris and base their European operations in London.

Johnson’s comments were pounced on by the international press, making headlines in American tabloid the New York Daily News and the UK’s Financial Times.

Losing money

ArcelorMittal has argued that two blast furnaces at Florange, which were shut down for 14 months prior to their full closure, were uncompetitive in a tough trading climate and too far away from ports to be viable. Their closure affects some 625 jobs out of a total 2,500 at the site.

Mittal’s Florange site is in the traditional, but declining, heartland of the French steel industry in the eastern Lorraine region.

France has until Saturday to find a buyer for the furnaces – but says the two potential purchasers will only invest in the entire site.

But ArcelorMittal refuses to sell and wants to retain the rest of the site because of its continued profitability. It doesn’t want to see the site nationalised – as the French authorities are now threatening – then sold off in its entirety to one of its competitors.

This refusal to budge has infuriated the French authorities, especially because Mittal has benefitted over the years from large subsidy payments designed to keep the French steel industry alive.

 

Date created : 2012-11-27

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