The head of France's largest employers' union today slammed as "blackmail" a threat by the state to take over a plant owned by steel tycoon Lakshmi Mittal, amid outrage in Mittal's native India that he was a victim of racism.
President Francois Hollande has himself dangled the threat in talks with the billionaire, ranked 21st in the Forbes list of the world's wealthiest people, over the row on the Florange plant in the eastern Lorraine region.
France has threatened to take over the plant if ArcelorMittal goes ahead with plans to permanently close two blast furnaces on the site that the company regards as uneconomic.
ArcelorMittal, which wants to continue to operate the rest of the site, has given the government until Saturday to find a new investor willing to take over the furnaces.
Laurence Parisot, the head of the influential Medef employers' union, said the proposed move, first unveiled by Industrial Renewal Minister Arnaud Montebourg, was "simply scandalous."
"If the aim through these statements is simply to exercise pressure, to engage in blackmail in the course of negotiations, it is unacceptable," she said on RTL radio.
Parisot said it was not up to the state "to start telling each company in France 'this is our strategy'" adding that only "an entrepreneur can know if something is profitable or not."
Former premier Alain Juppe, a heavyweight figure in the right-wing opposition, called for Montebourg to be sacked over remarks he deemed "calamitous" for the image of France.
"It is time to replace someone who is on his way to becoming the minister for industrial collapse," Juppe wrote in his blog.
The case, a litmus test of Hollande's commitment to spur growth, create jobs and boost the low competitiveness of French industry, has created outrage in India with messages on social media networks saying Mittal would have been treated differently if he was a white man.
Some of them also recalled the opposition he faced from Arcelor executives and French interests during his contested takeover of the company in 2006.
"This is not socialism, this is racism," the Indian site Firstpost said in an article.
"ArcelorMittal is not the first to cut jobs in France. Peugeot has announced 8,000 job cuts in France, Sanofi 900 and Carrefour 500-600," it said referring to blue-chip French companies.
Hollande had dangled the threat of nationalisation just minutes before his one-to-one talks Tuesday with the India-born Mittal, which the government spokeswoman said had been "frank and firm."