French minister says ‘no confidence’ in steel tycoon Mittal
PARIS—A French minister cast doubt Sunday on whether the world’s top steelmaker ArcelorMittal would keep its end of the bargain after a compromise deal on a key plant that Paris had threatened to nationalize.
The dispute over the closure of blast furnaces at the Florange plant had risked damaging France’s image among investors, after a virulent attack by a minister on the company owned by Indian-born steel tycoon Lakshmi Mittal.
“There has been an agreement but there is no confidence,” French Ecology Minister Delphine Batho told the iTele network.
“Mittal has never kept his promises in the past,” she said. “We are absolutely mobilized and the arm-wrestling with Mittal will continue to ensure that the pledges are respected.”
French Prime Minister Jean-Marc Ayrault announced a deal Friday in which he said ArcelorMittal had committed to invest at least 180 million euros ($234 million) over five years at the Florange site in northeastern France.
The government and the steelmaker had been waging high-stakes brinkmanship for weeks over the fate of two blast furnaces at the plant.
ArcelorMittal wanted to shut them for good because of a slump in demand for low-end steel products.
It had given the government until December 1 to find a buyer for the blast furnaces after which it would begin laying off around 630 employees.
The government responded by threatening to nationalize the entire site, which contains facilities to produce higher-end products that ArcelorMittal wanted to keep. Paris said it could not find a buyer for just the furnaces.
Under Friday’s deal, the two blast furnaces ArcelorMittal had closed would be left intact until EU financing was confirmed for an existing carbon-capture project, while ArcelorMittal agreed not to proceed with forced job cuts.
The dispute had left President Francois Hollande’s government caught between a pledge to protect jobs and the need to improve the competitiveness of French industry as the country faces rising unemployment and stagnant growth.
It also came at a difficult time for ArcelorMittal. The company is saddled with a debt mountain that is expected to rise to $22 billion by the end of the year, with Moody’s recently downgrading its credit rating to junk status.