Hollande to Meet Mittal after Minister Says Steelmaker Not Welcome in France

on Nov 27, 2012

**ArcelorMittal “No Longer Welcome in France”**

French Minister for Industrial Renewal, Arnaud Montebourg, has accused the world’s largest steelmaker ArcelorMittal (AMS:MT) and its chief executive Lakshmi Mittal of resorting to lies, blackmail and threats. The senior minister told French newspaper Les Echos yesterday: “We no longer want Mittal in France because they haven’t respected France.” Mr Montebourg added that the Indian steel magnate’s group “has never honoured its commitments” to the country and “Mittal’s lies since 2006 are damning.”

The minister’s explosive attack came after ArcelorMittal, which employs 20,000 people in France, announced that it wants to close the two furnaces at its Florange site in the industrial Lorraine region in eastern France’s rust belt. Paris argues that the Florange closure breaks promises made by Mr Mittal during his hostile takeover of Luxemburg-based Arcelor in 2006, which was strongly opposed by ministers. The government also says Mr Mittal offered explicit guarantees about Florange’s future in 2009. ArcelorMittal, however, denies it made any binding commitments and says the closure of the two furnaces is necessary because of plunging demand for European steel.

Mr Montebourg’s accusations were also accompanied by a threat to temporarily renationalise Florange, unless the Indian-owned group sold all of its steel interests in the Lorraine region to one of two potential, unnamed buyers offered by the government. Mr Mittal responded to the warnings that it is willing to sell the two furnaces, but a potential sale of the whole site would “endanger the viability” of its other activities in France and would endanger the jobs of all of his 20,000 French employees. According to The Times, citing a source close to ArcelorMittal’s CEO, Mr Mittal was “very shocked” by the minister’s attack. “These are violent declarations against a company which employs 20,000 people in France,” the source said.

**Montebourg Backpedals**
While Mr Mittal denied the minister’s accusations, other French official insisted that Mr Montebourg was correct in claiming that the steelmaker had failed to meet commitments over the furnaces made in 2006 and 2009. Yet Mr Montebourg’s Cabinet colleagues remarked that there were no plans for the government to take over the 100 ArcelorMittal sites in northern and north-eastern France, and that they do not support Mr Montebourg’s inflammatory language. As a result, the minister had to soften his comments yesterday. Later during the day, he tried to clarify: “When I said, ‘We don’t want Mittal in France any more’, I wanted to say that we do not want its methods any more — methods which involve the non-respect of engagements, blackmail and threats. I am not questioning the industrial presence of ArcelorMittal in France. I am questioning Florange.”

**Mittal to Meet Hollande Today**
!m[Montebourg Accuses Firm of “Lies and Threats,” while London’s Mayor Woos the Indian Steel Magnate](/uploads/story/905/thumbs/pic1_inline.png)Mittal’s Florange plant has become a symbol of French President François Hollande’s commitment to restoring the country’s declining industrial strength. Failure at Florange would add to a list of industrial shutdowns, which the president had also promised to rescue. Yet analysts and industry representatives warned of the dangers of potential nationalisation of the plant for France’s already tarnished image as a business-bashing state. To discuss Mittal’s plans to close the company’s troubled French unit, today President Hollande is scheduled to meet with Mr Mittal for emergency talks over the extraordinary industrial row.
**“Venez a Londres, Mes Amis”, Says Boris**
In the wake of today’s meeting of Hollande and Mittal at the Elysée palace, London mayor Boris Johnson waded in to the row between the steel tycoon and the French government as he urged Indian businessmen to set up in the United Kingdom instead of France.
The *Telegraph* reported today that Mr Johnson, who is on the third day of his six-day tour of India, told a meeting of businessmen in Delhi: “On a day when the sans-culottes appear to have captured the government in Paris and a French minister has been so eccentric as to call for a massive Indian investor to depart from France, I have no hesitation or embarrassment in saying to everyone here ‘venez a Londres, mes amis’ (come to London, my friends).”


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