Luxembourg steel workers battle against Arcelor bid

March 23 | Updated: Mar 24 2006, 05:30am hrs
Retired Luxembourg steel worker Armando Bausch pounds his kitchen table and says Mittal Steel Cos hostile bid for Arcelor SA, the countrys biggest employer and the largest company, is piracy. Every country has the right to its own company, said Bausch, in an interview at his row house in Esch-sur-Alzette, a town in southern Luxembourg that boasts art deco buildings along with Arcelors electric arc steel furnace.

Mittal will close everything and move the plants to the east.

Bausch, like thousands of Luxembourgers, spent a lifetime making Arcelor the worlds most profitable steelmaker. Indian-born billionaire Lakshmi Mittal on January 27 offered $21.9 billion for Arcelor, which employs 6,000 people in the country of 4,68,000. In a survey by TNS Ilres for RTL Luxembourg between February 3 and February 7, seven out of 10 adults opposed the bid. Luxembourg prime minister Jean-Claude Juncker promised to pull out all the stops to block the takeover. France, where Arcelor employs 26,000, is also opposed to Mittals plan. One ploy used by Arcelors defenders fell through yesterday, when a Luxembourg parliamentary committee voted against a new law that was designed to thwart Mittal.

Its just political grandstanding, said Stephen Pope, head of equity research at Cantor Fitzgerald LP in London. Its crazy if they want to stand in the way of the free market. I think Mittal will get it.

Steel matters to Luxembourg because it helped turn a nation wracked by famines in the early 1800s into a manufacturing hub. The industry employed about a third of the industrial labour force before World War I. While financial services have overtaken steel as the main engine of Luxembourgs economy, the government still owns 5.6% of Arcelor. Amid clothes shops and jewelry stores on Eschs main street, a sculpture on the city hall shows two muscular workers holding hammers with smokestacks in the background.

Bloomberg