Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

France reaches deal to save 600 jobs at ArcelorMittal steel plant

Dec 02 2012, 10:06 IST
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The French government reached an agreement late Friday with the steel giant ArcelorMittal that commits the company to investing 180 million euros The French government reached an agreement late Friday with the steel giant ArcelorMittal that commits the company to investing 180 million euros
SummaryThe French government reached an agreement late Friday with the steel giant ArcelorMittal that commits the company to investing 180 million euros

NICOLA CLARK

The French government reached an agreement late Friday with the steel giant ArcelorMittal that commits the company to investing 180 million euros ($233 million) over five years in one of its three largest French factories and avoids the elimination of about 600 jobs.

The deal, announced by Prime Minister Jean-Marc Ayrault, ends a tense, two-month standoff that escalated this week with the threat of a possible nationalisation of the plant.

In a televised announcement, 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 improved. Workers will be redeployed to other areas of the plant, he said, and there will be no layoffs.

“The government has decided against the idea of a temporary nationalisation,” Ayrault said.

Nicola Davidson, a spokeswoman for ArcelorMittal, confirmed that an agreement had been reached but declined to discuss the details before a formal announcement on Saturday.

The accord appeared to end the ugly dispute, which had pitted the French state, in its traditional role as defender of industry, against a company with mounting debts that was trying to reduce capacity in response to the economic slowdown in Europe.

ArcelorMittal, the world’s largest steel maker, had sought to close the two blast furnaces at the Florange plant permanently 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 per cent, 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 significant job cuts this year.

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 scepticism 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 whole plant and said that two companies were interested, although he declined to identify them. It was Montebourg who first raised the possibility of a “temporary nationalisation” of the Florange plant in a newspaper interview published this week.

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