January 20, 2022

ArcelorMittal Rejects Europe’s Pressure on Job Cuts

The company, ArcelorMittal, has said no.

“Continuing to operate these plants would threaten the overall viability of our business in Europe,” said Nicola Davidson, a spokeswoman for the steel giant, which is based in Luxembourg.

“We are a public company,” Ms. Davidson said Wednesday. “We are responsible to our shareholders.”

And so go the politics and financial realities of steel in Europe, where, along with ArcelorMittal, the German company ThyssenKrupp and the British operations of Tata Steel have announced cutbacks adding up to thousands of European jobs.

“Without steel, there is no Europe,” the official, Antonio Tajani, a European commissioner for industry, said late Tuesday.

He was speaking in Brussels at a third and ostensibly final meeting of government ministers, company executives and union leaders that was aimed at trying to arrest the decline of the European steel business, which employs about 360,000 people. The group is to produce an action plan by summer aimed at reversing the decline in an industry in which Europe was once the world leader.

Mr. Tajani called for ArcelorMittal to delay plans to close plants in four countries and cut thousands of jobs, until the European Commission could present its action plan.

ArcelorMittal, though, said it would proceed on its own timetable.

That could set up a new battle between ArcelorMittal and European political authorities. Late last year the company had a showdown with the French government over ArcelorMittal’s plan to permanently close two idled blast furnaces at Florange, in eastern France. After the government threatened to nationalize the site, the confrontation ended inconclusively; the company promised to invest €180 million, or $242 million, in continuing businesses at Florange but said the blast furnaces would remain shut down.

Along with Florange, ArcelorMittal also plans to close two blast furnaces and other operations in Liège, Belgium, as well as other units in Spain and Luxembourg. At least 3,500 employees will be affected, according to the company, which says it has about 98,000 employees in Europe. The company says that most of the 900 or so people whose jobs have already vanished in Spain and Luxembourg were reassigned elsewhere and that it will try to follow the same practice in France and Belgium.

In a sense ArcelorMittal is turning into what some European leaders feared when its chairman and chief executive led a hostile takeover of the European champion, Arcelor, in 2006. With net debt of about $22 billion — almost equal to the company’s $28 billion stock-market value — Lakshmi Mittal, the chairman of ArcelorMittal, has little choice but to cut the least efficient units in his global business.

And he has little incentive to protect Europe, where his main steel business of supplying the home-appliance and auto industries lost an average of $143 per ton last year. Undersized plants like those at Liège and Florange, which are also far from seaports, are logical targets, analysts say.

But Mr. Mittal is starting to feel Europe’s political heat.

“Mittal has always used governments and unions against each other,” the French industry minister Arnaud Montebourg said in an interview published Wednesday in the newspaper Le Monde. “Here, he’s facing a unified front of the European Commission, the unions and member states.”

“If we let him shut Liège, he’ll continue elsewhere,” Mr. Arnaud added. ‘We didn’t stop him at Florange, maybe we can succeed at Liège.”

Mr. Montebourg and Jean-Claude Marcourt, industry minister for Wallonia, the largely French-speaking area of southern Belgium, say they have allies in Poland, Spain, Germany, Austria and the Netherlands.

Article source: http://www.nytimes.com/2013/02/14/business/global/arcelormittal-rejects-europes-pressure-on-job-cuts.html?partner=rss&emc=rss