* Employers' union chief brands nationalisation "scandalous"
* Govt says lobbyist overlooking ArcelorMittal's business
* Company plans to shut Florange unless buyer found by Dec.
* Poll shows majority of French favour nationalisation
By Nicholas Vinocur
PARIS, Nov 29 The head of France's employers'
union branded government plans to take over ArcelorMittal's
Florange steelworks as "scandalous" on Thursday,
leading the government to accuse her of overlooking the
The government is locked in talks with ArcelorMittal on the
fate of two blast furnaces at the site that the company plans to
shut down unless it can find a buyer by Saturday.
The case has been seen as a test of Socialist President
Francois Hollande's vow to stem a glut of layoffs and reverse
years of industrial decline in France.
But MEDEF employers' union chief Laurence Parisot said
nationalising the steelworks went against the principle of
private property, after Industry Minister Arnaud Montebourg said
the government was ready for a temporary takeover.
"This statement is purely and simply scandalous," Parisot
told RTL radio. "To undermine the principle of private property
in this haphazard way is very serious and, what's more, very
The government is studying a temporary takeover of the site
in northeastern France, bringing in a private investor to
operate the steelworks and keep open the blast furnaces, which
employ 600 people out of a total 2,700 at the site.
Parisot said such an operation would be an "expropriation",
leading the government to accuse her of overlooking flaws in
Luxembourg-based ArcelorMittal's business practices.
"I would have liked it if she used that word ('scandalous')
when the owner of this site was transferring a chunk of profits
from French sites over our borders, notably to Luxembourg,"
Budget Minister Jerome Cahuzac said.
Cahuzac said Parisot ignored what he described as the
company's unfair winding down of an economically viable site to
Energy Minister Delphine Batho dismissed Parisot's comment
and noted the government had no plans to be a long-term owner.
A survey by pollster OpinionWay released on Thursday showed
that a clear majority of French voters supported the
government's proposal: 59 percent of those questioned favoured a
temporary nationalisation of Florange.
Even right wingers have rallied to the government's side,
with a former adviser to ex-president Nicolas Sarkozy endorsing
Montebourg's plans for the site.
Officials say that temporarily nationalising the site would
be legal and that ArcelorMittal would be compensated for any
forced sale. The state would become part-owner only until a
permanent owner was found.
They argue that a temporary takeover site would be similar
to the U.S. government's bailout of car makers including General
Motors during the economic crisis, which has been touted
as a success.
Critics, however, question the choice of pumping state money
into the ailing steel sector when France is striving to improve
its competitiveness and press ahead with structural reforms.
"Nationalising a company in a struggling sector to save jobs
will only push others to ask for the same treatment," said Elie
Cohen, an economist at the CNRS research institute.
Analysts said the French state's plans could clash with EU
law and leave it open to legal attack by ArcelorMittal, however.
"Quite how such a process would work is unclear," said Ben
Jones, France analyst at the Economist Intelligence Unit. "It
seems doubtful whether necessary legislation would be consistent
with European Union state aid rules."
Finance Minister Pierre Moscovici has sought to calm fears
the plan could herald a wave of nationalisations, saying it was
a one-off and appropriate given that CEO Lakshmi Mittal had
broken vows to ensure the site's viability.
ArcelorMittal denies breaking its commitments. Sources close
to the group say it planned before its 2006 takeover by Mittal
to wind down operations including the two furnaces after 2010.
They argue that overcapacity in Europe's steel market has
made Florange's furnaces economically unviable, and that a buyer
is unlikely to take them on without the rest of the site.