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TheStreet Open House

French Minister Wants Steel Firm ArcelorMittal Out

JAMEY KEATEN

PARIS (AP) â¿¿ Many European countries with lagging economies are trying to draw in foreign investors. But in France, a Socialist minister says he wants to kick the world's biggest steel maker out of the country, accusing it of lying to the government.

The invective from Industrial Recovery Minister Arnaud Montebourg has soured an already tense relationship between France's leftist leadership and steel powerhouse ArcelorMittal. In a dispute that has caught the nation's attention, the company says it will shut down blast furnaces in northeast France â¿¿ unless the government finds a new buyer by this week.

The showdown over the site in Florange, which is reportedly profitable but underperforming compared with other ArcelorMittal assets, exposes the simmering mistrust of capitalism in France. It also raises the prospect that President Francois Hollande's Socialists may pay out to nationalize in an old-world, labor-intensive industry despite a push for austerity across much of Europe.

"We don't want Mittal in France anymore because they haven't respected France," Montebourg was quoted as saying in Monday's edition of business daily Les Echos. The trouble, he said, "isn't the furnaces in Florange, it's Mittal."

ArcelorMittal's "lies since 2006 are overwhelming," he said, according to Les Echos.

Montebourg didn't specify how France could oust ArcelorMittal. But the stakes in the standoff are high: In France alone, the company has more than 20,000 employees at about 150 sites and brought in ⿬4.6 billion in sales last year ⿿ about one-sixth of its total revenues worldwide.

The furnaces in question at Florange employ about 600 people, but unions fear that shutting them down will lead to other closures at the site and throughout the country's steel industry.

The company, assembled by Indian-born Chairman and CEO Lakshmi N. Mittal, one of the world's richest people, infuriated many on the French left by announcing Oct. 1 that it planned to stop the Florange furnaces. In the face of sustained worker protests, the company gave the French government 60 days to find a new owner.

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