Lakshmi Mittal Not Welcome in France

In November 2012, the showdown between steel giant ArcelorMittal and France hit a new peak: Industrial Renewal Minister Arnaud Montebourg said the company was no longer welcome in the country. At stake was the Florange plant in Lorraine, where two blast furnaces had been shut down, and a French government threatening temporary nationalization.

What was the fight about?

ArcelorMittal had idled the two Florange blast furnaces, saying they were uncompetitive: damped down for 14 months before closure, too far from ports, in a brutal trading climate. The company had just posted a third-quarter net loss of $709 million on weak Chinese demand and European operating losses. France, under Socialist President Francois Hollande, faced a Saturday deadline to find a buyer for the furnaces and was treating the plant as a litmus test of its strategy against rising unemployment.

What did Montebourg say?

In an interview with the French financial daily Les Echos, Montebourg said: "We do not want Mittal in France any longer because they do not respect France." He accused the company of broken promises since 2006 and said it had "never honoured its commitments." He also floated a "transitory nationalisation" of the site, pairing an industrial operator with a minority capital stake to stabilize it. Members of the Mittal family told Le Monde they were "extremely shocked" by the remarks.

How did Mittal respond?

Company chief Lakshmi Mittal was scheduled to meet President Hollande as the deadline approached. ArcelorMittal warned that nationalization would threaten its activities in France, where it employed 20,000 people. France said it had two offers, but only for the entire Florange site, which Mittal refused to sell. Les Echos reported Russia's Severstal among the potential buyers circling the furnaces.

Why did it matter beyond steel?

The Florange fight became the symbol of Hollande's industrial policy: a government willing to threaten nationalization to save jobs, and a multinational warning that such threats would drive investment away. It was also a case study in the politics of deindustrialization: Lorraine, the historic heart of French steel, watching its furnaces go cold.

FAQ

Where is Florange? In the Lorraine region of eastern France, the traditional center of the French steel industry.

What is ArcelorMittal? The world's largest steelmaker at the time, formed by Lakshmi Mittal's 2006 takeover of Arcelor. It operated 11 blast furnaces across northern France, Germany, and Belgium.

Did France nationalize the plant? No. The threat of "transitory nationalisation" was a pressure tactic in the 2012 standoff; the furnaces stayed closed.

The takeaway

"We do not want Mittal in France" was the sound of a government discovering the limits of its leverage over a global company. The furnaces were cold, the jobs were gone, and the shouting was mostly for the voters back home.