PARIS Steelmaker Mittal, which acquired France's Arcelor in 2006, is no longer welcome in France due to years of broken promises, Industry Minister Arnaud Montebourg said on Monday, intensifying the row over plans to close two furnaces in northeastern France.
Montebourg's attack on ArcelorMittal (ISPA.AS) risks exacerbating tensions in a dispute that is central to Socialist President Francois Hollande's efforts to save jobs and reverse years of industrial decline.
It came after Montebourg, one of the most left-wing ministers in the government, said last week that France could nationalize the company's Florange site on a temporary basis while the government tries to find a buyer.
ArcelorMittal, the world's largest steelmaker, has said it will shut down two blast furnaces at Florange from December 1 unless the government can find a buyer to operate them.
"We no longer want Mittal in France because they haven't respected France," Montebourg said in an interview with Les Echos business daily published on Monday.
He said Chief Executive Lakshmi Mittal had told "shameful lies" since 2006 about the group's plans and had not kept his promises to the French government.
"The problem with the blast furnaces at Florange is not the blast furnaces at Florange, it's Mittal," he said.
A source close to Lakshmi Mittal, who according to French media is due to meet with Hollande on Tuesday, told Reuters that management were "very shocked" at Montebourg's words.
"These are quite violent declarations against a company which employs 20,000 people in France," the source said.
Montebourg did not elaborate on his comment. It was unclear whether he meant that the government would consider taking over the more than 100 ArcelorMittal sites in France - or simply wanted to raise pressure on the company as the deadline looms.
The fate of Florange, situated in the former heart of French steelmaking country, became a symbol of France's flagging industry during campaigning for the May election and is now a test of Hollande's promise to reverse the decline.
Failure to save jobs at Florange would add to a list of industrial shutdowns, including a Peugeot PSA (PEUP.PA) production site near Paris, and risks deepening fears in the public that the government is powerless to save jobs.
Unemployment is at a 13-year high of over 10 percent and October jobless claims due on Tuesday are expected to show another increase.
A spokeswoman for Montebourg was not immediately available to comment. ArcelorMittal, which employs some 20,000 people across France, declined to comment.
Last week Montebourg said the government had received two offers from buyers interested in acquiring more than just the two blast furnaces, but gave no further details.
ArcelorMittal has denied having received any such offers.
(Editing by Catherine Bremer and Greg Mahlich)