French minister says 'no confidence' in Lakshmi Mittal, expects him to break 'promise'

Dec 03 2012, 11:50 IST
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Lakshmi Mittal has never kept his promises in the past, says French Ecology Minister Delphine Batho. Lakshmi Mittal has never kept his promises in the past, says French Ecology Minister Delphine Batho.
SummaryEcology Minister casts doubt on whether ArcelorMittal would keep its end of the bargain.

A French minister cast doubt 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 nationalise.

The dispute over the closure of blast furnaces at the Florange plant had risked 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 mobilised and the arm-wrestling with Mittal will continue to ensure that the pledges are respected."

Unions also echoed her fears."The government's decision has created a lot of disappointment and left a bitter taste," said Jean-Claude Mailly, secretary general of Force Ouvriere, one of France's top three unions.

Mailly told the weekly Journal du Dimanche that he was "very sceptical" about Mittal's promises. "He had (earlier) promised 320 million for Florange but we never saw the cash," he said.

"We have the feeling we have once again been betrayed," said Edouard Martin, a spokesman for the CFDT union at the Florange plant.

"We don't trust Mittal at all."

The unions are due to meet Prime Minister Jean-Marc Ayrault on Wednesday.

Ayrault announced a deal Friday in which he said ArcelorMittal had committed to invest at least USD 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 nationalise 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 industrial competitiveness in the face of rising unemployment and stagnant growth.

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