Job cuts in distressed economy pit Hollande against ArcelorMittal

Nov 29 2012, 03:07 IST
Comments 0
SummaryIt has been only a month since the French government, concerned about the country’s declining competitiveness, began its 'Say Oui to France' advertising campaign to attract foreign investment.

the United States, Canada, China, India and Brazil.

A glossy brochure notes proudly that France is already home to 20,000 foreign companies and as recently as last year was the leading destination for corporate foreign investment. “Our objective is to leverage France’s attractiveness to remain a key investment destination in Europe,” the brochure says.

But in fact, France is hemorrhaging industrial jobs to such an extent — 750,000 in the past decade — that in a government-commissioned report made public this month, Louis Gallois, a prominent businessman, called for “a competitiveness shock” to stanch the bleeding.

That is why critics say Montebourg’s hard line against ArcelorMittal is the wrong message at the wrong time.

“The image France is projecting is disastrous,” said Nina Mitz, a public relations consultant in Paris with deep ties to past Socialist governments in France. While she conceded the Florange factory case presented a political thicket for the Hollande government, Mitz said such bold talk of nationalisation — even if served up mainly for domestic consumption — “sends a frightening message, particularly to investors from other countries”.

The government’s stance has invited ridicule from some opportunistic critics. Boris Johnson, the outspoken mayor of London, alluded to the Montebourg threat on Tuesday, telling Indian business leaders they should not “wait to be persecuted by the sans-culottes in Paris”, but should rather bring their business to London.

Montebourg has since moderated his remarks, saying his objection was to “Mittal’s methods”, which he described as “failure to keep promises, blackmail and threats”.

ArcelorMittal has agreed to give the government until Saturday to find a buyer for the furnaces, offering it for a symbolic single euro, despite scepticism that a buyer would be interested in anything less than the entire factory. Indeed, Montebourg now insists that the company agree to sell the entire plant. He says that two companies are interested, but has declined to identify them.

Mittal, who built ArcelorMittal from the 2006 merger of his Mittal Steel with Arcelor, then the largest European steel maker, promised at the time to help modernise the European steel sector, but the company says that the Florange facility was already slated for closure under Arcelor, its previous owner. This week he has countered the Montebourg threat with a warning of his own, saying in a statement that any sale of the entire Florange plant “would jeopardise the viability” of the rest of ArcelorMittal’s operations in France.

Initially dismissed as rhetorical arm-twisting

Single Page Format
Ads by Google

More from Frontpage

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...