Agreement Reached with ArcelorMittal, Montebourg Nearly Resigns

Arnaud Montebourg, Productive Recovery Minister. Photo: Flickr.com/jyc1

Arnaud Montebourg, Productive Recovery Minister.
Photo: Flickr.com/jyc1

The defused conflict between the government and the company ArcelorMittal almost cost France its Minister of Productive Recovery, Arnaud Montebourg. Montebourg almost resigned from this position on Saturday, December 1.

The Minister had fought for months to avoid the lay-off plan that threatened the workers of Mittal and advocated the pure nationalization of several parts of the company a few days ago. His consideration of resignation was provoked by the announcement of an official deal between the government and ArcelorMittal on November 30.

Montebourg felt that the government and Prime Minister Jean-Marc Ayrault had bypassed him on this issue and had rejected his proposal. He also felt responsible for the workers he had tried to defend. His resignation was avoided with difficulty, until Montebourg announced his intention to remain in his position on December 1 on the national television channel TF1.

The project of partial nationalization, implying a temporary control of several plants before a viable takeover from another company, was widely criticized as illegitimate and unproductive. Economists and other commentators believed that, beyond the fact that the project in itself was not economically sustainable, it would severely damage the reputation of the government among investors.

The government also considered that the new buyer Montebourg proposed was not a good option. ArcelorMittal employs 20,000 workers across the country, which puts the story under a new perspective. Things go beyond the Florange plant, one of the main targets of the lay-off plan.

This might have been the reason Jean-Marc Ayrault preferred to reach his own agreement with the company. The most symbolic measure is part of the deal: the lay-off plan is cancelled and there will be further negotiation with the unions to arrange volunteer departures. Moreover, the firm will invest 180 million euros over the five next years to “strengthen” the site of Florange as “a provider of high additional value.” The plan only concerns the production and refining of steel and not the two blast furnaces that were supposed to close.

No clear decision has been reached concerning the blast furnaces. They will not be dismantled, but their future is suspended to a decision of the European Union about the creation of a process to create steel with low energy consumption and with less emission of CO2 (UCLOS). However, the project will need at least two years of study and, in addition to the inevitable investments, the furnaces will naturally degrade as they will remain inactive.

This is not the end of troubles for the government regarding this issue. Jean-Marc Ayrault is meeting the unions on Wednesday November 5. The meeting is likely to be tense, after Le Monde published an unofficial copy of the agreement, whose details had remained secret up until that point. It says that out of the 180 million euros of investment, only 53 million would be actual investments to develop the company in the long-term. The rest would be devoted to the maintenance of the plants. This confirms the fears of the unions, who are likely to settle accounts with Ayrault.

However, the agreement seems to show that Ayrault obtained many guarantees. Through restructuration and strengthening of different parts of the firm, most of the job issues should find a solution. The unions want the agreement to be partly changed though, especially so that it specifies that the furnaces of Florange will remain active.

Ayrault and others members of the majority tried to calm the controversy around Montebourg, giving him their full support. According to Ayrault, Montebourg has done what needed to be done because “someone needed to raise his voice.” The Prime Minister praised his work and declared that the current agreement was made possible by the impact of his proposals, even though they were not adopted.

In addition, the government expressed its clear will to make ArcelorMittal respect its commitments, and that the threat of a temporary nationalization was still an option. Some sources surrounding François Hollande even said that the “revolver” of nationalization was still “on the table.”

Trackbacks

  1. […] weeks now, while François Hollande and his government have been attacked on several issues, the Florange case and the controversy around Notre-Dame-des-Landes and its airport among the most […]

  2. […] one anomaly that this controversy reveals: Montebourg seems to spend most of his time trying to stop the bleeding in French industry, proving the “Productive Recovery” is closer to a dream than to reality, especially given the […]

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