The Liège business is heavily dependent on the automotive sector, a severe handicap in the current environment. Auto sales in the European Union fell 8.2 percent in 2012, according to the European Automobile Manufacturers’ Association, and sales are expected to decline again this year.
The company said it would close six production lines at Liège that make finished steel products for the auto industry. It is also closing a coke plant, where fuel for blast furnaces is produced.
ArcelorMittal said there was “insufficient demand to support the running of these flexible facilities and no improvement is seen over the medium term.” European steel demand, it said, is 29 percent below the levels of before the global financial crisis.
“We deeply regret that the economic situation has further deteriorated to the extent that the proposal of further closures at Liège has become necessary,” Bernard Dehut, chief executive of ArcelorMittal Liège, said in a statement.
The announcement marks the latest shrinkage of production capacity at the Liège facility. ArcelorMittal said in October 2011 that it would close a liquid-phase steel production facility at the site.
The company said it would continue operating five other lines, employing about 800 people, because they “are strategic due to their dedicated high-quality products, specialized processes and technological innovation.”
The MWB-SETCa union called for the plant to be nationalized, saying in a statement that the company had broken its agreements with workers and was preparing “even worse announcements.”
ArcelorMittal, based in Luxembourg, was formed through the merger of Mittal Steel with Arcelor in 2006. Lakshmi N. Mittal, the Indian-born billionaire who serves as chairman and chief executive, borrowed heavily to pull off the merger and subsequent deals, but that has worked against him since the financial crisis hit steel demand in key markets.
The company’s debt is rated below investment grade by both Moody’s Investors Service and Standard Poor’s. On Jan. 10, ArcelorMittal announced the sale of stock and convertible subordinated notes — essentially bonds that turn into stock at a later date — to raise about $4 billion as part of its goal of reducing debt to $17 billion by June 30.
Mr. Mittal ran afoul of the French government in the autumn during a dispute over the company’s plans to close to blast furnaces at a plant in Florange, in eastern France.
The French industry minister, Arnaud Montebourg, accused Mr. Mittal of failing to honor his promises and threatened to nationalize the facility. The government retracted the threat after the company agreed to certain concessions.
As for the 1,300 employees whose jobs are being eliminated at Liège, ArcelorMittal said it was “committed to finding a socially acceptable solution for all those affected,” with measures including “the possibility of reallocation to other sites within the group.”
Article source: http://www.nytimes.com/2013/01/25/business/global/arcelormittal-to-close-parts-of-belgium-plant.html?partner=rss&emc=rss
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