ArcelorMittal cuts 1,300 Belgian jobs, unions call strike

Steelmaking giant ArcelorMittal announced Thursday that it would shut down six cold-processing facilities in the Liege region of eastern Belgium, eliminating 1,300 jobs, infuriating the prime minister and triggering a strike call by trades unions.

A steel slab is pictured is the hot mill train, on January 9, 2013 in Florange, eastern France. Steel giant ArcelorMittal will shut down six cold-processing facilities in Belgium cutting 1,300 jobs and triggering a strike call from unions.

The news, which the company said resulted from weak European demand for steel, left Socialist Belgian premier Elio Di Rupo livid ahead of a meeting with Indian metals magnate Lakshmi Mittal who owns the company, at the World Economic Forum in Davos, Switzerland.

"I support the workers," Di Rupo said on Twitter. "This is the first message for our meeting this afternoon.

"I will also convey the incomprehension of the Belgian authorities" at this decision, Di Rupo added.

"I reckon we're dead" and "it's finished," said angry workers as they left an emergency meeting of union delegates who blamed local management.

Employees burned tyres and wooden palettes outside one of the plant headquarters, and unions called for an immediate general strike at the sites that were still open.

ArcelorMittal, already embroiled in controversy in France over the closure of two blast furnaces, blamed weak demand for cars and cutbacks in auto plants for the fall in demand for steel.

European demand was now 29.0 percent below the level it stood at before the financial and economic crisis broke in 2008, it said.

But the Belgian prime minister called the decision incomprehensible and said that he sided with the workers.

The steel group said that it "recognises that this proposal will be very difficult for the local community as it affects approximately 1,300 people. It is committed to finding a socially acceptable solution for all those affected."

ArcelorMittal recalled that it had announced some cutbacks at its Liege facilities in October 2011 to deal with "structural over-capacity in Northern Europe."

The company said it had proposed a flexible work model which was rejected by trades unions but which would have enabled the facilities to adapt to demand.

Since then the market has worsened, with key automakers announcing major restructuring plans and cutbacks, the company said.

"As a result there is insufficient demand to support the running of these flexible facilities and no improvement is seen over the medium term," an Arcelor statement said.

The company said that despite the closure of the blast furnaces, the Liege facility had reported an underlying loss of more than 200 million euros ($266.0 million)for the nine first months of 2012 and warned that no improvement was in sight this year.

The statement said: "We deeply regret that the economic situation has further deteriorated to the extent that the proposal of further closures at Liege has become necessary.

"We recognise that this is a very difficult announcement for the employees at Liege, particularly coming so soon after the closure of the primary phase.

"We had hoped that that closure would be adequate in terms of adapting to the reduced demand but given the continued lack of orders and overall weakness in the European economy, it has become increasingly apparent that further action is required if we are to stem the continued losses that the plant is reporting and return it to a sustainable basis."

The newly-installed head of Belgium's French-speaking Socialist Party, Paul Magnette, said the closures resulted from "cynicism and cowardice" that betrayed "contempt and hypocrisy" on the part of Arcelor executives.

He added that the decision meant months in which potential takeovers could have been explored had been wasted.

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Writer: AFP
Position: News agency