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ArcelorMittal reaches deal with unions of Italy's ILVA steel maker

Source: Xinhua| 2018-09-07 03:12:49|Editor: Mu Xuequan
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By Alessandra Cardone

ROME, Sept. 6 (Xinhua) -- Luxembourg-based ArcelorMittal on Thursday reached a deal with Italian unions over Italy's ILVA steel maker, a step that would allow finalizing a preliminary sale signed by the group last year.

The deal was inked at the Ministry of Economic Development Thursday afternoon, after final negotiations were launched on Wednesday.

Under its terms, ArcelorMittal agreed to hire 10,700 of ILVA's nearly 14,000 workers within three months, and the rest of the workforce between 2023 and 2025, the company said in a statement.

The group also agreed to allocate 250 million euros (290.6 million U.S. dollars) as incentives for voluntary layoffs, according to Fim-CISL union.

"The best possible result was reached in the worst possible conditions," Economic Development Minister Luigi Di Maio told reporters after the deal was signed.

In June 2017, ArcelorMittal -- at the head of Am Investco Italy Consortium comprising Italian Marcegaglia Industrial Group and Intesa Sanpaolo bank -- won the tender to buy the troubled steel maker.

The preliminary purchase, however, was put on hold by the current government, soon after it entered into force in June this year.

Initially inclined to oppose the takeover, Di Maio explained on Thursday that -- given the agreement reached between ArcelorMittal and unions -- it was no longer "in the interest of the public to invalid the tender".

With the current deal, all of ILVA's workers would be offered open-ended contracts, and the measures introduced with the "Jobs Act" reform by the previous government -- which made firing easier for employers -- would not apply to them, the minister also explained.

Overall, ArcelorMittal agreed to invest 4.2 billion euros (4.8 billion U.S. dollars) to buy loss-making ILVA, modernize its plants, and reduce its impact on environment and public health.

The latest activity was especially required for the southern city of Taranto, where the largest of ILVA's factories was related to several hundreds of cancer cases among the population.

According to CISL metalworker union leader Marco Bentivoli, the sum would comprise 1.8 billion euros for the take over, some 1.25 billion for industrial investments, and 1.15 billion for environmental investments.

"Today is the beginning of a path that would make ILVA a stronger and cleaner company," Ansa quoted AM Investco Italy chief executive officer, Matthieu Jehl, as saying after the meeting.

In a statement, ArcelorMittal Europe Flat Products CEO Geert van Poelvoorde added the deal met "the two major objectives we set out at the start of negotiations: to find an acceptable solution for every employee at ILVA, and to reach an agreement that reflects ILVA's economic reality and provides a sound base for it to have a sustainable future."

In order to be formally ratified, the deal will now be submitted to ILVA's workers in a referendum to be held by Sept. 13 at the latest, the CGIL union said.

Founded in early 1990s, ILVA is considered the biggest single steel maker in Europe in terms of output capacity. Today, it counts on four plants across Italy, in Taranto, Genoa, Novi Ligure, and Paderno Dugnano.

While able to annually produce over 10 million tonnes of steel at its peak, ILVA was subjected to judicial interventions to reduce emissions -- due to its strong environmental impact -- since early 2000s. In 2016, ILVA said it produced 5.8 million tonnes of steel.

It was finally put under extraordinary administration in January 2015, and such procedure would end by Sept. 15.

In a report to parliament earlier this year, the extraordinary commissioners had warned about "ILVA's difficult cash conditions, running out in July 2018."

ArcelorMittal is the world's largest steel maker, with revenues worth 68.7 billion U.S. dollars and a crude steel production of 93.1 million tonnes in 2017, according to the company's profile.

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