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Kallanish Kallanish

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November, 17th 2019

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NOV 07
11:22

Italian Prime Minister rejects ArcelorMittal Italia 5,000-job-cut plan

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During a three-hour meeting with Italian authorities in Rome on Wednesday, Lakshmi and Aditya Mittal discussed the need to cut the former Ilva’s workforce by 5,000. Also discussed was maintaining production at 4 million tonnes/year. ArcelorMittal Italia currently employs 10,351 workers.

Earlier this week ArcelorMittal told Italian authorities it will terminate its lease and subsequent purchase of Ilva.

Effective 3 November, the Italian parliament removed the legal protection necessary for the company to implement its environmental plan without the risk of criminal liability. This created the legal condition for withdrawal, according to ArcelorMittal (see Kallanish passim).

Following the Rome meeting, Italian Prime Minister Giuseppe Conte said at a press conference his government has offered to reconsider the issue of criminal immunity. However, it will not accept ArcelorMittal’s withdrawal based on the failure of its industrial plan’s objectives. ArcelorMittal has refused the offer.

Conte said criminal immunity is not the real cause for the company’s withdrawal. He observed: “What clearly came up during the meeting, after the discussion we had in the presence of various ministers… is that the real issue is that the French-Indian company believes that (Ilva) cannot be sustainable and profitable with the current levels of production that are reduced to 4m t/y… It is therefore a strictly industrial issue… This is absolutely dramatic for us not only economically speaking but from a social standpoint... This is for us absolutely unacceptable.”

Conte also pointed out that following a public tender, the government’s requests of investment into Ilva became specific clauses of a contract with ArcelorMittal. “It is unacceptable that the company intends to withdraw from these clauses,” he commented. “Therefore, no responsibility for decisions made by the company can be given to the government.”

“The issue comes from an industrial plan that is not able to achieve its targets,” Conte continued. “It is not possible to say that the industrial plan is not sustainable after the tender was awarded on the basis of that very plan…. We invite the company to rethink its initiatives and we are determined to defend and guarantee with the utmost commitment the relaunch of Ilva and Taranto.”

The government is willing to keep negotiations open, he added, giving ArcelorMittal two days to respond.

ArcelorMittal declined to comment when approached by Kallanish.

Union representatives for ArcelorMittal Italia have received the official note from the company that it will terminate the purchase of Ilva, representing a step forward in the procedure of withdrawal. Unions representing the entire ArcelorMittal Italia have therefore announced a 24-hour strike starting at 19:00 local time on 8 November.

The former Ilva steelworks is losing €780 million ($864m) per year, economic development minister Stefano Patuanell said during the press conference.