French minister says ArcelorMittal is not welcome

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French minister says ArcelorMittal is not welcome

French minister says ArcelorMittal is not welcome
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A true declaration of war or an attempt to apply pressure while awaiting the mediation of the President?

France’s Minister for Industrial Renewal, Arnaud Montebourg has said: “We do not want Mittal in France because they don’t respect France.” Later clarifying: “We do not want Mittal’s methods in France, methods of non-compliance, blackmail and threats.”

On October 1 ArcelorMittal announced its intention to close part of the site of blast furnaces in Florenge en Moselle, the workplace of 650 people.

If a solution is not found by Saturday, December 1, the closure will begin. The state has found two buyers, but they want the entire site and the Mittal family does not seem to agree.

ArcelorMittal has been the world’s largest producer of steel since 2005.

It employs 260,000 people in 60 countries and produces 86 million tons of steel per year.

But in late September the group’s debt reached 17.9 billion euros for a turnover of 73 billion.

In the third quarter the company recorded a net loss of 547 million euros. 303 million of which was from the carbon flat steel division based in France.

Lakshmi Mittal, the richest man in Britain, took over French company, Arcelor in 2006, to create ArcelorMittal.

The French government accuses the group of “mismanagement” of going back on its promise to invest in blast furnaces in Florange from 2013 to 2015 and of owing 1.3 billion euros to the French state.

In its defence the group highlights the economic downturn: since 2007 demand in Europe has fallen by 25 percent in key markets such as the automotive industry and construction.

Some experts believe temporary nationalisation may be a solution.

This is not just a preserve of the left: Though it was Socialist President, François Mitterrand, who nationalised major companies in 1982, such as Thomson, Saint-Gobain and Rhône-Poulenc, It was France’s centre-right government that saved Alstom in 2004.

France is also no exception: in 2009 the Obama administration saved General Motors from bankruptcy, and four years later the company has recovered.

But will the state take the leap with ArcelorMittal? And if so at what price? Could this case result in a change of attitude from elected officials towards large multi-national companies?