Talk of Nationalization Gets New Life in France
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Version 0 of 1. PARIS — Has President François Hollande let the nationalization genie out of the bottle? After Mr. Hollande and his industry minister raised this week the possibility that the French state would take over an ArcelorMittal steel factory in a dispute over the foreign company’s plans to close two blast furnaces, union workers in another industry — shipbuilding — are calling for the government to seize their foreign employer’s property. The French corporate establishment is bracing for a global backlash, if the nationalization impulse takes hold. On Thursday, unions representing workers at the STX shipyard in Saint-Nazaire, on the Atlantic coast, issued a joint statement demanding that the French government “do everything possible to keep the shipyard open, even, if necessary, breaking European Union rules.” The shipyard is already partially owned by the French government, but is controlled by STX, a South Korean business group. With business slow in the yard’s mainstay cruise ship building industry, about half of the shipyard’s labor force of 2,100 is now idled. The unions are betting that the current Socialist government, if it controlled the shipyard, would put everyone back to work. “The door is open, and we want to open it as wide as possible,” Jean-Marc Pérez, the representative of the Force Ouvrière union at the STX shipyard, told the media. The nationalization of the shipyard, where almost half of the 2,000 workers are furloughed on partial pay, “is essential,” he said. An STX spokeswoman in Saint-Nazaire and a spokesman in Seoul both declined to comment on the unions’ demands. The office of the French industry minister, Arnaud Montebourg, did not respond to requests for comment Thursday. There is a potential strategic rationale for nationalizing the STX site in Saint-Nazaire, on the Atlantic coast near the mouth of the Loire River. It is the last large shipyard in France and builds warships for the French navy. Unions have long called for government intervention at the shipyard, given the labor lull. But the dispute with ArcelorMittal, the world’s largest steel company, and based in Luxembourg, is giving new life to their demands. The industry minister, Mr. Montebourg, earlier this week called for a “temporary nationalization” and resale of the steel plant, at Florange, near the German border, if the company followed through on a planned closure of two blast furnaces there, with the loss of more than 600 jobs. Mr. Hollande, addressing journalists before a meeting Tuesday with the ArcelorMittal boss, Lakshmi Mittal, said that nationalization of the Florange plant might be an option. ArcelorMittal agreed two months ago to give the government until this Saturday to find a buyer. But no investor is thought likely to want only the blast furnaces, which transform iron ore into slab steel. And the company refuses to divest itself of a part of the plant that processes steel for the auto industry. Mr. Montebourg said Wednesday that he had lined up a buyer for the Florange steel site — which he did not identify — and said the purchaser was willing to invest €400 million, or $519 million, to renovate it, assuming it was sold in its entirety. Giles Read, a spokesman in London for ArcelorMittal, said discussions with the French government were continuing, but declined to comment further. Talk of nationalization is being applauded by some in a country where the jobless rate is over 10 percent, and where intervention is not a dirty word. In the early 1980s, the last Socialist president, François Mitterrand, nationalized much of the economy, before later reversing course. Jean-Luc Gironde, a Force Ouvrière spokesman in Paris, said the union did not advocate nationalization as a general policy. But “in a case like ArcelorMittal, where the enterprise has been the beneficiary of public funds, why not?” But there has also been a sharp reaction from business leaders. “If the point is to add pressure and blackmail in the negotiations, it is inadmissible,” Laurence Parisot, president of the Medef employers’ lobby, told RTL television on Thursday. “Our society is built on the basis of property rights,” she added. “To undermine that principle is scandalous, and it’s expensive.” Le Monde, the center-left French daily, despaired in an editorial this week that Mr. Montebourg had become in effect the government’s chief spokesman on economic matters, overshadowing even Finance Minister Pierre Moscovici. Mr. Montebourg’s statements, including his declaration that “We don’t want Mittal in France,” the paper said, “have frightened Anglo-Saxon investors and dismayed the Germans,” as they “can’t understand how we could denigrate companies in our own country.” The Business Standard, a leading Indian business daily, argued that Mr. Mittal, a native of India, “has become a scapegoat for the malaise in France over job losses.” Other Indian commentators have suggested that racism is playing a role in the conflict. Mr. Hollande’s tone has been more measured than that of his outspoken industry minister. Mr. Montebourg comes from the left wing of Mr. Hollande’s Socialist Party, while Mr. Hollande himself is a centrist. Early this month, in fact, Mr. Hollande won kudos from economists by breaking a long-held taboo of the left, acknowledging that France’s high labor costs and strict work rules were holding back the job market. Jean-Christophe Caffet, an economist with Natixis, suggested that Mr. Hollande’s government, which has been less militant than its left wing had hoped, might be using this week’s heated rhetoric as a sop to dissidents on the left to ensure their support in Parliament. “The government has presented a quite clear course, which is implementing a supply-side policy,” he said. “I can’t rule out bad news,” Mr. Caffet said, “but I don’t think we’re going back the early 1980s, with big nationalizations.” <em>Choe Sang-hun contributed from Seoul.</em> |