L'Humanité in English
Translation of selective papers from the french daily newspaper l'Humanité
decorHome > Economy > Lorraine Steelmakers cornered between a shark and a crocodile

EditorialWorldPoliticsEconomySocietyCultureScience & TechnologySportInternational Communist and Labor Press"Tribune libre"Comment and OpinionBlogsLinks
About Europe, read also
decorEconomists Call for Concrete Solidarity decor“Now, the refugees live like us, with us” decorNationalism: Deadly Poison for Democracy decorDaniel Mermet: “The working classes are now almost entirely formed by the young and people from immigrant families.” decorPeople of the left decorDenis Durand: Break the hold money exerts on the economy to put it to use in social schemes decorGreat Britain: “I can help you build a progressive majority" decorThe future of Greece (and Europe) is not written in stone! decorThe Greek Spectre decor“Jaurès is enthralling, meditative. Jaurès teaches” decorAlbert Camus on Hiroshima. War journal of 8 August 1945 decorNATO The North Atlantic alliance wants to double the size of its rapid reaction force
About India, read also
decorIn India, Democracy is a Pressure-Cooker Ready to Explode decorIndian police kill 11 eco-activists decorMoving forward to a red sky -my friend Bulu Roy Chowdhury decorChina has triggered a salutary change in Africa decorGeneral strike in India decorHollande in New Delhi: when Paris rediscovers the road to India decorCameron and the "shameful" massacre in British India decorIndia: Justice at a crossroads decorThe State of Manipur (India) and the Golden Triangle decorIndia: the Salt of the Earth Converges on the Indian Social Forum decorAlang, India: Globalization and the Wages of Fear decorIn the shipyards of Alang, they destroy men as well as ships
About Economy, read also
decorIMF admits that austerity was a miscalculation decorThe middle classes are not immune to the crisis decorFrançois Hollande “Anticipated” Poor Growth Forecast decorThe Year of the Dragon or China In Search of a New Impetus decorIreland in the Clutches of the IMF and Financial Markets decorIreland: A Mere Pasteboard Décor decorLiberal Schizophrenia decorBelgium : A New Social Disaster Ahead decorSpeculators Playing with Debt decorDr Jekyll decorRecession Takes Hold in France decorHypermarkets and Prices: What they said…

ORIGINAL FRENCH ARTICLE: Les sidérurgistes lorrains coincés entre un requin et un crocodile

by By Thomas Lemahieu

Lorraine Steelmakers cornered between a shark and a crocodile

translated by Henry Crapo

Translated Monday 6 February 2006, by Henry Crapo

Metz (Moselle), by special correspondent

Fusion, effusion, confusion: ever since the announcement by Mittal Steel, Friday 27 January, of the launch of a public offer of a hostile takeover of Arcelor, heads began to spin pretty much everywhere. Controlling, with his family, what has become, with lightning speed, a steel-making group based primarily in Eastern Europe and the United States, but with its headquarters in the Netherlands, the Indian Lakshmi Mittal courts the European capitals to show off his good profile, while Guy Dollé, the boss of the multinational (born of the fusion in 2002 between the Luxembourg company Arbed, the Spanish company Aceralia and the French company Usinor) multiplies his declarations urging the widely geographically distributed shareholders of Arcelor to reject the advances of Mittal.

The French Villepin government rolls its eyes, but its gestures sound hollow. The Spanish and Belgian authorities would rather keep their distance, while Jean-Claude Juncker, Luxembourg’s prime minister, promises a reply as "hostile" as their takeover offer. Kamal Nath, Indian Minister of Commerce and Industry, says he is following the affair, "the comments it inspires, and the reactions of the French government". It is "economic patriotism against savage globalization" that they play for us at the stock exchange, while financial analysts, professional speculators, investment and pension funds calculate the expected profits from the action undertaken.

In this saga, when the thousands of steel workers in France make an appearance, it is in the little "extras": simple silhouettes in a giant game of liars’ poker, they are asked to take sides in one camp or the other, with the "victim" or with the "beast". But if we make the effort to open our ears in the Moselle, at Sollac (Arcelor Atlantic and Lorraine) in Florange, at the research center for Arcelor in Maizières-lès-Metz, and at Mittal Steel Ganrange (ex-Unimétal, owned by Usinor until 1999) in Amnéville, opinions abound in this shake-up, both political and in the media. Today, after years of "restructurings" in the valley of the Fensch and beyond, and with the explosion of the demand for and the costs of raw materials, steel has become the "grey gold", everyone is afraid to be forced to carry the burden of a monopoly in financial globalization.

"They’re going to sing us the little song about the social model"

Tuesday noon, in the union office of Sollac, in Florange (3,600 employees), Marc Barthel, national union representative to the CGT union federation, munches his sandwich while thumbing through the managerial prose sent that very morning to all the employees of "Arcelor — number one worldwide in steel". He reads the first pages aloud, then sums up: "I hear it coming. I’m sure they’re going to sing us the little song about the social model". And sure enough, page 19, the management of the European steel manufacturing group describes the offer of their competitor as "a danger to the work force".

In the same spirit, since the announcement of the takeover offer, Pierre Coletti, elected delegate of the CFDT union federation to the European Business Committee, highlights the "cultural" differences between the mastodons of steel-making ("At Arcelor, all the restructurings, even if we have opposed them, have been carried out in a responsible manner, and, so far, the promises made to the social partners have been respected"), and Alain Zochowski, national union delegate to the CGC, pleads with the the company to "help" the employees to purchase shares "at preferential rates". ("We know that this is going to play itself out with knives, but we want to be in on the action").

At Florange, the CGT doesn’t exactly figure it that way. Three years ago, it recalls, Arcelor announced its decision to close, before 2010, the two high furnaces of Sollac, the last ones still operating in the whole region, and the entire branch for liquid products. Taking advantage of the advanced average age of workers in the plant (at the end of 2004 65% of the workers were over 50, and thus contenting themselves, without firing anyone, simply not to replace those who left. This amounted to a suppression of 1,500 jobs at the site, and as many subsidiary jobs. "We have no intention of joining in this dance of comparative ’company cultures’", says Georges Muschiati, union secretary. "It’s not up to us to prefer Guy Dollé’ mustache to Lakshmi Mittal’s turban!"

"Since 2003, the necessity of maintaining the liquid products branch at Florange has been proven. With the exponential increase in demand, we were sometimes unable to supply our customers. By removing the cast-iron plant from Sollac, we risk again increasing the difficulties of supplying the rest of the site, and endangering the viability of steel-making in the Fensch Valley".

----- "If Mittal wins the takeover, they will get their hands on 8 billion euros in cash at Arcelor"

For Patrick Peron, CGT representative for the European management committee of Arcelor, it is the financing of the sector that should be called into question by this attempted takeover. "If Mittal wins this takeover bid, they will get their hands on a prize of 8 billion euros of Arcelor’s own money", he says, "and if it doesn’t work, Arcelor will want to monopolize all its finances in order to continue its growth in the emerging countries like Brazil, and to make profits from its machinery as quickly as possible. In either case, this promises no good for the Lorraine." And Marc Barthel joins in, "At the moment of its creation, Arcelor promised, in its corporate strategy, to put 80% of its profits back into industrial development and research, 20% into the stock market, but this has been radically contradicted by the facts, for now it is 50-50 between finance and industry. We have more and more the impression of being diluted, that we serve as stockholders rather than as the guys who want to make good products out of steel." During this discussion, a group of buddies come to get a bite to eat at the end of a company meeting, and tell everyone, "We spent two hours discussing the "special menu" for the canteen, and one minute on salaries." In these difficult times, to provide concrete illustrations of the "little song about the social model", the management of Arcelor ought to make an effort, however you look at it!

----- The race to giantism has worn Arcelor to the bone

Wednesday morning, at the Regional Economic and Social Council, Gilbert Krausener, author of the timely November 2005 report, entitled "Steel Manufacturing in the Lorraine: for a new future", and former union-organizer for the CGT at the research center at Maizières-lès-Metz, draws conclusions concerning the panorama of the situation resulting from the takeover bid. While Arcelor has just concluded some very costly operations in a hostile takeover of the Canadian company Dofasco (4 billion euros) and the purchase, with the help of the pension funds of the Turkish army, of a Turkish enterprise (1 billion euros), the member of the Economic and Social Council of the Lorraine criticizes a race to giantism in which "the multinationals wear themselves to the bone". "This race towards concentration forces the steel manufacturing groups to engage in enormous expenditures", he regrets.

This external growth wears out a group like Arcelor, which plans to spend 3 billion in Brazil during the upcoming years. This will place that country with 22% of the worldwide production of the group, and shows that they want to decrease Europe’s part in the present production. It’s a hellish spiral, which, as we see, has transformed Arcelor into an ideal victim, very vulnerable. In his report, Gilbert Krausner takes a position contrary to the reasons invoked in 2003, in particular, concerning the "over-capacity" for production, given by the steel group as the reason to close its liquid works in Lorraine.

With the explosion of consumption on a planetary scale, but also within Europe, along with the fact that the groups have all gained back their profit margins, all that old talk about the end of steel-making, which irredeemably condemned the Lorraine, has become obsolete, he says happily. Each year the worldwide production climbs by 4 or 5 percent, which matches the present production of a group like Mittal Steel. We have shown, for several years, that we have a very competitive sector in this region, that steel is becoming a very modern material. Look at how Arcelor manages to make products with very large added value, and how the Lorraine is today the first region in Europe for research on steel. This should give them confidence and pride, and legitimacy to lead a battle now toward a collective recuperation of the tools of the trade in steel-making.

----- The added value is up, but not the research funding

It was some days after the announcement of the takeover bid by Mittal, at the research center of Arcelor (550 employees) at Maizières-lès-Metz, in the corridors, in the offices in the ultra-modern experimentation laboratories, the management had put up posters for the multi-national. A portrait in black and white of the manager, and with the title, in English, French and Spanish, "I’m Arcelor, je suis Arcelor, soy Arcelor, I like to work in a team, that’s why I like my colleagues, my team, and Arcelor" Was this a warning or an appeal? This this "company patriotism" has become so banal now in the big corporate groups.

"After the fusion among Arbed, Usinor and Aceralia, we find ourselves again plunged in the logic of liberal finance", says, with regret, Gérard Cayuela, elected to the management committee of Arcelor Research. "In 2002, the creation of Arcelor was already marred by the closure of the sites at Montataire, at Biache, in the Liège Basin, in Belgium. There was the announcement of the closure of the high furnaces in the Valley of the Fensch, and we know well the consequences for the surrounding territories."

In the course of the last two decades, research, in what has since become Arcelor, has already seen drastic restructuring: closures of centers, and regroupings, notably at the site of Maizières-lès-Metz, with suppression of jobs to boot. It is by a policy of research and innovation, with the creation of a "pole of competitivity" on innovative materials ("MIPI") in Lorraine, that the palette of steels of very high added value is regularly renewed. So the workers of Arcelor Research now fear to see, in case of success of the takeover my Mittal, the resources devoted to their activity again being reduced. (The multinational has an unflattering reputation in this domain, worsened by their non-participation in the pole of competitivity.) "When we were in Usinor, the budget for research was 1.1% of the company’s earnings, but when we were sold to Arcelor, this went down to 0.6%", recalls Stéphane Rossi, CGT union delegate. "And if we go through another fusion, it will be 0.25%?"

----- The bottom line

It’s just a first move, but at Amnéville, at a site formerly named Unimétal, sold in 1999 for the legalistic sum of 1 Franc by its "strategy" director at that time, Guy Dollé, to Ispat International, now becomes Mittal Steel, the 1,100 workers confess without shame, for them, taken for dead at the end of the last century and picked up at the last moment for a crust of bread by the Indian millionaire.

The takeover bid by Mittal has the smell of revenge (these recent years at the plant, the departures for retirement have been replaced by 250 young hirings). In a tract distributed Wednesday afternoon, the CFDT of Mittal Steel Gandrange pokes fun at Arcelor, "they reap what they sow". "In the beginning, it’s true, this made us laugh," admits Xavier Phan Dinh, CGT representative on the European Business Committee. "There is a sort of reversal of history in this affair. When Guy Dollé let us go to Mittal in 1999, they spoke of the group, which we didn’t know, like they they were talking about fashion design, and now, these same guys compare Arcilor to perfume, and Mittal to Eau de Cologne. After having been restructured for years by Usinor, the workers here now feel insulted by the head of Arcelor."

After these initial reactions, easily understood when one takes into account the history of steelmaking in the Lorraine, the union members denounce the identical practices of these two groups: "All the resources are concentrated on the external growth of the multinationals, not on the development of human resources and innovation," Jacky Mascelli complains. Mittal, who is no philanthropist, wants to maximize profits to best repay his investments.

Xavier Phan Dinh adds: "Between Arcelor and Mittal, there are two strategies, a bit different, both capitalist. Mittal repurchases companies, and, until now has been less concerned than Arcelor by possible ’doubles’. He expects that each site become a source of profits, by putting pressure on the work crews to increase productivity. What is important here, as at Arcelor, is the bottom line. We are plunged in an affair in which a shark wants to eat a crocodile. And meanwhile the multinationals spend billions in their mergers. To the buggers who work their asses off in the steel mills, they reply: ’We don’t have money for pay-increases’".

Follow site activity RSS 2.0 | Site Map | Translators’ zone | SPIP