'Persistent weakness' in the construction industry and a dim hope for quick recovery leave hundreds of workers idle.
Steel-making giant ArcelorMittal (IW 40/1000) has closed its Schifflange site in Luxembourg indefinitely, union officials said March 20, increasing fears that the plant will close permanently.
"Management informed us of an indefinite closure of the Schifflange site" in the south of the small country, said OGBL union official Jean-Claude Bernardini, at the end of a work's council meeting.
"The management's tone has changed since we had been told that the Schifflange closure was temporary and that the question of its reopening would be raised on a quarterly basis," he said.
In a written statement, ArcelorMittal said the closure was due to a "persistent weakness" in the construction industry in Western Europe and the unlikelihood of a "fast recovery."
The Schifflange site has been at a standstill since October of last year.
ArcelorMittal said 282 workers were affected by the closure out of the 626 that worked at the Schifflange and neighbouring Rodange site.
The steelmaking giant also said mills at Rodange would continue to work at lower capacity.
The LCGB union said the latest decisions were "a pure and simple closure of two of Luxembourg's four major steel factories and meant the direct loss of several hundreds of jobs."
In October, ArcelorMittal announced a slowdown in its Luxembourg operations due to "a strong degradation in the economic outlook."
ArcelorMittal, the world's biggest steelmaker, had said the Schifflange and Rodange sites had cost the company $132 million in losses over the last three years amid a European construction market that had contracted by 20 percent since 2007.
The group has also idled a furnace at a plant in the northeastern French city of Florange since June and another since October, citing insufficient steel demand.
But President Nicolas Sarkozy on March 1 pushed ArcelorMittal to invest $24 million in the struggling French plant, addressing a hot issue in the French presidential election campaign.
And in Spain earlier this month, about 200 Arcelor Mittal workers protested a decision by the company to close a factory in Madrid.
Arcelor Mittal's plant in Villaverde in the southern suburbs of Madrid made steel girders for construction before it went idle in October.
Arcelor Mittal posted a net profit of $2.3 billion in 2011, a 22 percent drop from the previous year.
Copyright Agence France-Presse, 2012