The adoption in the National Assembly of an amendment leading to the nationalisation of the activities in France of the steel group Arcelor-Mittal has revived old memories, the nationalisations following the arrival of the left in power in 1981, accompanied by unjustified critical comments. At the time, Usinor and Sacilor were on the verge of bankruptcy due to their heavy losses and excessive debt. The conversion into shares of these debts held by banks, which had been nationalized since 1945, and by the State, followed by the purchase of the last listed shares, made it possible to save the two companies.
Ignorance of the past, real or feigned, as well as the refusal to admit reality, do not allow us to understand the causes of the difficulties of the moment, to reflect on the right solutions and to find the arguments to make them accepted by political forces and public opinion. The reactions to the proposal for the nationalisation of Arcelor-Mittal-France provide a good example of this. A look back is therefore very useful.
Steel is a strategic asset for industry. We cannot constantly invoke the need for a return to sovereignty and even proclaim in Brussels that we must adopt an "economic security strategy" and at the same time ignore the risks that steel production in France has been facing since its acquisition by the Indian group Mittal in 2005.
How did we get here? To make steel, coal and iron ore were needed. Until the 1970s, France had them in Lorraine and the North, which explains the location chosen for the main factories. But these deposits were to be exhausted and the State encouraged the construction of new steelworks in Fos-sur-Mer. As the need for steel no longer grew, overcapacity appeared at a time when the competitiveness of the installations in Lorraine was falling due to the cost of supplying raw materials by land, which was much higher than for the factories located near the ports of Dunkirk and Fos.
Two waves of restructuring and site closures with heavy job losses had to take place in 1982 and 1984. But they allowed the accounts of the companies to be restored, which became profitable again. The State, again to improve their financial solidity, merged them in 1986 under the name Usinor. The company, where employee representatives sat on the board of directors, became profitable again before experiencing losses again in 1993 and 1994 due to the recession that hit Europe at the time. This will prevent it from being included in the wave of privatizations of the Balladur government.
The return to profits in 1995 ushered in a period much more marked by a logic of disposals and acquisitions than by the desire to consolidate a diversified production apparatus on the national territory. Thus, the sale of the Gandrange factories in Lorraine to a then unknown Indian industrialist, Lakshmi Mittal, was a response to the strategic choice to concentrate on flat products and abandon long steel products. The site will have a tragic fate. Despite President Sarkozy's commitment to keep it in operation, it was closed in 2009.
The privatization of the company therefore took place at the end of 1995, during the Juppé government, and brought in 17 billion francs to the State, which helped to reduce the budget deficit created by the decline in activity and tax revenues. This is much lower than the amount of funds mobilized at the end of the 70s to avoid the bankruptcy of the two steel producers. Moreover, if the state had not rushed to privatize for ideological reasons, it could probably have gotten much more out of it. The strategy of the company that has become private will then change, which will lead to the current situation and concerns about the future of the steel activities.
From that moment on, the president of the new Usinor, Francis Mer, believing that the group's financial solidity had been restored, carried out several operations before, in 2001, concluding two major acquisitions, the Spanish Aceralia and the Luxembourg Arbed. The Grand Duchy then lobbied for the new group's headquarters to be in its capital and for the company to be listed on its market. The State will not intervene and this request will be accepted. For the managers, the tax system was more favourable and setting up their offices in the former headquarters of the Luxembourg central bank was more flattering than in a tower in La Défense. A year later, Francis Mer was appointed Minister of Finance and Industry in the Raffarin government.
The merger was finalised in July 2001. But while the size of the new group's turnover is impressive, at 26 billion euros, its net profit, less than 300 million, is less brilliant. Protests against this move are rarely heard. Only the size of the new entity was taken into account, which was then among the top three steelmakers in the world. We do not perceive the transition from an industrial logic based on the protection of the competitiveness of a strategic activity to a financial logic. The State, which had committed considerable sums to save the company, has also lost its means of intervention due to the location of the headquarters and the listing abroad.
But this new situation has not escaped Mittal. The Indian group, which had also made acquisitions around the world, seized the opportunity offered to it and launched its takeover bid. The proposed course was initially considered too low. After a 40% increase, the deal was concluded in January 2006. The French steel industry then came completely under foreign control amid general indifference.
The first years were marked by further reductions in activity at the Florange and Gandrange sites as well as the acquisition of a 26% stake in Vallourec, making it the largest shareholder in one of the world's leading manufacturers of steel tubes for the oil industry. Here again, there is no concern on the part of the public authorities. But the rise of the Chinese steel industry, which has become the world's largest, poses a new threat to profitability and the response of Arcelor Mittal's managers will be systematically unfavourable to their activities in France.
Support functions (IT, finance, human resources) will be gradually relocated to India. Major investment projects to decarbonise the Dunkirk and Fos steel plants have been postponed. However, due to the evolution of European regulations, they were a condition for the survival of these sites. We are finally becoming aware that it is indeed the future of a strategic industrial sector that is threatened at a time when it is being proclaimed everywhere that the reindustrialization of France is a priority of government action. A simple amendment providing for the nationalization of Arcelor-Mittal's French assets will have to be adopted by the National Assembly so that we can finally think about the issues.
For the moment, the government's attention is focused on the adoption of the two finance laws, that of the State and that of Social Security and it has not made a decision. But whatever the method used, nationalization or public intervention, it is essential that the risks be measured and that the State find the mode of intervention that will prevent the disappearance of an essential industrial activity.
When an editorialist in Les Echos describes as an old idea the project of resorting to state intervention in order to protect an important industrial sector, he pretends to be unaware that its shareholder was born thanks to public aid granted during the takeover in 1984 of the Boussac textile group.