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Home > Business > PTI > Report

Luxembourg warm towards L N Mittal

Pallab Bhattacharya in Luxembourg | January 10, 2007 12:35 IST

Sections in France may still be sore about Laxmi N Mittal's takeover of Arcelor but Luxembourg, where the factory is located, is certainly not afraid of the owner of the world's largest steel manufacturer of Indian origin.

"I do not see any problem right now although there are and will be areas of concern in Luxembourg", the country's Economic Minister Jeannot Krecke said in Luxembourg on Wednesday while interacting with a group of Indian journalists.

In fact, Luxembourg is in talks with two of its big and economically much stronger neighbours Germany and France to secure a competitive price for electricity for Arcelor-Mittal factory, he said.

Krecke, however, said "we should not hide the fact that there are some concerns here about the changed way of working since Arcelor was taken over by Mittal.

He said he had met Mittal and conveyed to him that he needed to come to tripartite consultations with Luxembourg government and employees union on major decisions of the company in order to face competition.

Krecke's remarks assume significance in the backdrop of criticism in a section of French media recently about Mittal not sticking to the French style of corporate management. Asked about the Mittal family running Arcelor, the Minister sought to downplay it by pointing out that a number of big businesses in Europe, which are being run by families.

"I met and explained to him (L N Mittal) that you need to consult the Luexmbourg government and the employees on major decisions", he said.  Krecke said the problem would also crop up when the issue of modernisation of the steel firm is taken up.

He, however, dismissed as a "non-issue" the question of high salaries in Arcelor and said the more substantive subject was the price of electricity to be secured from France and Germany.

He said "there might be a transition period when there could be differences" but Luxembourg should not be afraid of competition from Asian giants like India and China or Arcelor takeover. Krecke said if Luxembourg did not get India and China it would miss on a huge market.

To drive home his point, he said some of the production lines in Luxembourg might shift to East Europe for reasons of cheaper cost of production after the recent joining of Bulgaria and one more country to European Union.

"But we should not be afraid of competition. If you do not go to India and China, you will be missing out 40 per cent of the world population", the Luxembourg minister said.

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