Steel giant ArcelorMittal (IW 1000/35) on Monday confirmed its intention to close two idle blast furnaces in eastern France and accepted a government deadline of 60 days to find a buyer.

The fate of the two furnaces has become a litmus test of French President Francois Hollande's strategy for fighting a rise in unemployment and for one of his policy priorities to raise the flagging competitiveness of French industry.

The furnaces have been idle for 14 months and employ 629 of the 2,500 employees at the Florange plant in the Lorraine region of eastern France, the traditional center of France's steel industry.

The management deadline to the government also included a takeover for a coking plant that serves another company plant in Dunkirk.

As the management announced its decision at the French headquarters in a Paris suburb, scores of workers picketed at the entrance to the Florange site.

"It's a crucial week, I am calling for mass mobilization," said Edouard Martin, a local official from the leading CFDT union.

At the company headquarters, Walter Broccoli from the FO union urged the government to "nationalize the steel sector," asking Industry Minister Arnaud Montebourg to "have a bit of courage."

Hollande met steel tycoon Lakshmi Mittal last week to discuss the future of the plant amid reports the state was offering to buy the furnaces for a symbolic euro in the hope it can find a firm willing to keep them working.

The  government is planning legislation that will ban profitable firms from closing down a plant and laying off workers without first seeking another company to take over the site.

The promised law was an election pledge by Hollande, who is under growing pressure to deal with unemployment as he grapples with a 37-billion-euro hole in public finances that he plans to plug with sweeping tax hikes and belt-tightening. Figures released last week showed that unemployment had risen to just over three million people, equivalent to 10% of the workforce.

ArcelorMittal is the leading supplier of steel products in all major markets including automotive, construction, household appliances and packaging. It operates in 60 countries and employs about 260,000 people worldwide.

The firm has temporarily closed several sites in Europe, in France as well as Belgium and Spain. In 2009, the firm closed furnaces in Gandrange, also in eastern France due to falling global demand in steel and high production costs in Europe.

 

-Charlotte Hill ,AFP

Copyright Agence France-Presse, 2012