French government has 60 days to save ArcelorMittal steel furnaces

Steel giant ArcelorMittal has given the French government 60 days to find a buyer for the last steel furnaces in the former industrial powerhouse region, Lorraine. Unions are pessimistic about the prospects but Industrial Recovery Minister Arnaud Montebourg has ruled out nationalisation.

Reuters

Montebourg on Monday said that he “strongly disagreed” with the Luxembourg-based company owned by Indian billionaire Lakshmi Mittal, to close the furnaces and coke oven at Florange.

The company announced the closure on Monday after the furnaces had been inactive for 14 months. It will mean the loss of 629 jobs, although the company says that it hopes to avoid compulsory redundancies.

The government has given the task of finding a buyer to economy ministry official, Pascal Faure, who has already written a report on the site.

ArcelorMittal said that it intends to keep the site’s downstream activities, which employ 2,000 people.

Unions believe that that decision will make it almost impossible to find a buyer and some have demanded that the site be nationalised. Montebourg has said that a state takeover is “not on the order of the day”.

About 200 million more tons of steel were produced than sold in the world in 2011, according to the World Steel Association, and demand has fluctuated with the effects of the economic crisis in Europe and the US.

More and more production has shifted to countries where labour is cheaper.

ArcelorMittal has 25 furnaces in Europe, but only 16 are operating at the moment. There are only two left in France, at Dunkirk on the channel and is Fos-sur-mer, near Marseille.

Lorraine was for a long time a centre of heavy industry and subject to continuous dispute, including wars, between France and Germany.

The closure of the furnaces is widely seen as a symptom of the decline of traditional heavy industry in France and comes amid a wave of factory closures and job losses that have posed a huge political problem for President François Hollande’s Socialist government since its election earlier this year.

There was more trouble on the labour front in France on Tuesday:

• Several radio and television programmes failed to get on air because of a strike against a 1.6 per cent cut in the public broadcasting budget;
• Newspaper distribution workers blocked the gates of printers of sports daily l'Equipe and tabloid Aujourd'hui en France in protest at a restructuting plan;
• Sanofi employees prepared to demonstrate Wednesday against restructuring that the pharmaceutical company says will mean 900 job losses before 2015 and unions claim will mean more.