Mittal: Digging a grave for one of the flagships of the European steel sector?

07/03/2012

This is what the workforce and the trade unions within the ArcelorMittal Group fear, and it is also what Mr. Mittal’s balance sheet leaves us to suppose. Since 2006, the Group has decided to temporarily idle 10 out of the 25 blast furnaces it owns in Europe and to close down several production units. It has axed 33,000 jobs in Europe, i.e. 25% of the workforce. Expenditure on R&D, which was already extremely low and well below that of its competitors, has been cut by a further 15%. The promised investments have not been made and have been restricted to plant maintenance.

ArcelorMittal justifies its strategy by the sluggish European economic climate and the drop in demand for steel. But, in any event, what lies behind the industrial decisions that have been taken is the increasing greediness of the majority shareholder, Mr. Mittal. His decision to make an extra one billion in EBIDTA available in 2012 – despite a flourishing financial situation – has led to a concentration of production on the most competitive sites whilst letting the others idle. Furthermore, ArcelorMittal has no compunction in making its European facilities pay high prices for iron ore in order to increase its mining revenue, thus crippling the competitiveness of its European sites by the same stroke. What we are seeing is quite simply organised plundering of its European sites in order to finance Mittal’s acquisitions in mines and facilities outside Europe.

This strategy has disastrous consequences for the thousands of employees and sub-contractors who are left flat, for the regional labour market, but also for the customers who are victims of the reorganisation of production and complain of an unprecedented fall in quality. Finally, the Group has reduced capacity to such an extent that it can barely meet its customers’ needs. In order to avoid supply shortages, it has in fact been forced to order supplies from its competitors or import half-finished products from Mexico.

For the EMF it is high time that the ArcelorMittal Group reverse a policy which is becoming increasingly more unacceptable and irresponsible.

At Florange today, EMF’s Deputy General Secretary Bart Samyn said «The EMF supports the Florange workforce and trade unions in their fight to maintain the site and their jobs. The legitimate fight of Florange is the fight of all those employed in the ArcelorMittal Group whose future, and whose families’ future, is at risk because of Mr. Mittal’s unquenchable thirst for profit. This is intolerable and we will do all in our power to persuade the Group to return to a development strategy for its European facilities. We cannot allow the fate of one of the pillars of European industry to be decided by Mr. Mittal alone».

The EMF calls on ArcelorMittal management to:

  • Pursue a more balanced policy based on the one hand on the fair distribution of the production load between the various European sites and on the other hand on a better reinvestment of profits between steel and mining activities
  • Develop an industrial project geared to the future, based on innovation, the development of know-how and R&D to develop the steels of tomorrow
  • Draw up an ambitious policy aimed at maintaining and further developing competence and know-how
  • Full comply with the commitments and agreements made since the merger in 2006
  • Fully respect information and consultation rights at national and European level, especially in terms of genuinely taking into account the alternative solutions proposed by the employee representatives with a view to maintaining sites
  • Utilising slack production periods to invest in training for employees, plant equipment renovation and modernization of plant equipment

The EMF will quickly launch an initiative towards the European Parliament and contact the European Commission for talks on the very worrying situation regarding the ArcelorMittal Group.

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PRESS 3/2012

The EMF is the representative body defending the interests of workers in the European metal industry. The EMF has a mandate for the external representation and coordination of the metalworkers' unions and a mandate to engage in bargaining at European level.

For further information please contact:

Ulrich Eckelmann, EMF General Secretary

Bart Samyn, EMF Deputy General Secretary+32 2 227 1019 (Mobile: +32 475 430743)

Isabelle Barthès, Senior Policy Adviser + 32 2 227 1012 (Mobile: +32 473 302627)

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