France Reaches Deal to Save Jobs at Steel Plant

The deal, announced by Prime Minister Jean-Marc Ayrault, brings to an end a tense two-month standoff that escalated earlier this week into the threat of a possible nationalization of the plant.

In a televised announcement, Mr. Ayrault said that while ArcelorMittal had agreed “unconditionally” to keep all 2,700 employees at its site in Florange, in northeastern France, two idled blast furnaces — at which 600 of those people worked — would remain offline until flagging European steel demand improves. The affected workers will be redeployed at other areas of the plant, he said.

“The government has decided against the idea of a temporary nationalisation,” Mr. Ayrault said. There will be no layoffs, he added.

Nicola Davidson, a spokeswoman for ArcelorMittal, confirmed by e-mail that an agreement had been reached but declined to confirm the details pending a formal announcement on Saturday.

The accord appeared to bring an end to the ugly dispute, which had pitted the French state, in its traditional role as defender of industry, against a company with mounting debts that is trying to reduce capacity in line with the slowdown in the European economy. ArcelorMittal, the world’s largest steelmaker, had sought to permanently close the two blast furnaces at the Florange plant but wanted to continue operating a part of the facility that processes steel for the car industry.

In all, ArcelorMittal employs about 20,000 people in France.

With unemployment hovering above 10 percent, the Socialist government of President François Hollande is desperate to avoid more layoffs by name-brand companies. Several big employers, including PSA Peugeot Citroën, Air France and Sanofi, have announced big job cuts this year. But some analysts said that by taking such a strongly interventionist stand to protect steelworkers, France risked sending the wrong signal to multinational companies, whose investment the economy needs if it is to stave off long-term decline.

ArcelorMittal had agreed to give the government until midnight Friday to find a buyer for the furnaces, offering them for a symbolic single euro, despite skepticism that a buyer would be interested in anything less than the entire factory.

Arnaud Montebourg, France’s industry minister, had previously insisted that the company agree to sell the entire plant and said that two different companies were interested, although he declined to identify them.

It was Mr. Montebourg who first raised the possibility of a “temporary nationalization” of the Florange plant in a newspaper interview published this week. In the interview, the minister accused Lakshmi Mittal, the Indian-born billionaire who serves as the company’s chairman and chief executive, of “failing to respect France” and of a “failure to keep promises, blackmail and threats.”

Mr. Mittal, who built ArcelorMittal from the 2006 merger of his Mittal Steel with Arcelor, then the largest European steelmaker, had promised at the time to help modernize the European steel sector. But the company said that the Florange plant was already scheduled for closing under Arcelor, its previous owner.

Stanley Reed contributed reporting from London.

Article source: http://www.nytimes.com/2012/12/01/business/global/france-reaches-deal-to-save-jobs-at-steel-plant.html?partner=rss&emc=rss