Mittal told: sell French plant or see it nationalised

Left-wing fury at British billionaire's plan to break up €400m site

Paris

Final efforts will be made today to avoid a potentially destructive clash of steel between the Socialist-led government in France and Britain’s richest man.

Paris is threatening to nationalise, a €400m (£323m) steel plant in eastern France unless the Indian-born billionaire Lakshmi Mittal agrees to sell it to a private buyer before midnight tonight. Mr Mittal’s company, ArcelorMittal, the world’s biggest steel-maker, wants to close or sell two blast-furnaces at Florange in Lorraine but to hold on to other profitable activities at the site. France insists that the whole complex must remain open under a single owner. In France, the dispute has come to symbolise the determination of President François Hollande to resist, or even reverse, the erosion of France’s industrial base.

Abroad, the word “nationalisation” has set alarm bells ringing. There have been mocking accusations from, amongst others Boris Johnson, the Mayor of London, that France has reverted to the statist 1970s, or even the revolutionary 1790s. French officials say that “temporary” nationalisation – compulsory purchase to allow the site to be re-sold to a private buyer –would be justified to save jobs and protect France’s remaining capacity to produce raw or “hot” steel.

The government’s tough tactics have won praise not only on the Left but from senior politicians of the French Centre and Right. Almost the only dissenting voice in France has been Laurence Parisot, the leader of the French employers’ organisation, Medef. She said yesterday that the “expropriation” of ArcelorMittal would be “an attack on private property” and a disastrous signal to international markets and potential investors.

The rhetorical temperature in the dispute was raised earlier this week when the left-wing French Industry minister, Arnaud Montebourg, said Mr Mittal was “no longer welcome” in France. Since ArcelorMillal owns more than 100 sites in France employing 20,000 people, this seemed a counter-productive approach to protecting the country’s productive base. Mr Montebourg later backtracked somewhat, saying he had only meant to show the red card to “Mittal’s methods” which he listed as “broken promises, blackmail and threats”.

In 2006, after a hotly disputed hostile takeover, the Mittal organisation merged with Arcelor, which had inherited much of the old French, Luxembourgish and Spanish steel industries. Paris says that Mittal promised at the time, and again in 2009, to maintain full steel production, including the blast furnaces, at the Florange site. The French government also accuses ArcelorMittal of failing to pay some of its French taxes.

ArcelorMittal officials deny both claims. They say the blast furnaces at Florange, which make raw or liquid steel, are no longer viable because of a fall in European demand. The rest of the site makes high-quality, laminated or sheet steel for the German car industry, using raw steel from other parts of the ArcelorMittal empire. If forced to cede these activities, the company says, the whole of its French operations would be destabilised.

Paris replies that the blast furnaces are unsellable if separated from the rest of the site. If they closed, 600 jobs would be lost and France’s strategically important capacity to produce raw steel would be irreparably damaged.

Oddly, nationalisation would reduce, rather than increase, France’s public debt burden. Paris plans to raise the money by selling part of the state’s residual stake in other large businesses, such as Air France or Renault – a partial de-nationalisation to fund a temporary nationalisation.

Mr Montebourg says that he already has at least one potential, private buyer for Florange who is willing to pay €400m. Once the site goes back to the private sector, the proceeds could be used to reduce the French state debt.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Life and Style
food + drink
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas