Lakshmi Niwas Mittal is in a spot of bother in France these days. ArcelorMittal, of which he is the chairman and CEO, had on October 1 announced that it will shut two blast furnaces at a place called Lorange. The blast furnaces were small and were located inland, 400 km from the nearest port. That made their output uncompetitive. The company said that 629 jobs would be lost. The steel industry is on a down-cycle, thanks to the austerity measures put in place by various member countries of the European Union. ArcelorMittal reported a loss for the last quarter, and needs to cut all unviable operations. LN Mittal said that the French government was free to find a buyer for the furnaces. It was a commercial decision and should have been left at that. Instead, the French government got involved with all its firepower. Its minister for industrial renewal, Arnaud Montebaurg, threatened to nationalise the entire Lorange works of ArcelorMittal and said that Mittal wasn’t welcome in France. In turn, Mittal said that would jeopardise his group’s whole business in France – he employs 20,000 people there.
The whole world is watching the drama unfold with bated breath. One of the world’s richest business tycoons is pitted against a socialist leadership which wants to protect jobs and revive the economy. Maybe the government of President Francois Hollande would have reacted differently if a French company was downsizing to the same extent. But it’s hard to ignore the fact that patience with businessmen is running thin. Relate this to the popular “Occupy Wall Street”, or OWS, movement that was born in last October. It was an outpouring of popular sentiment (the 99 per cent) against influential corporations and the methods they use to enrich themselves (the 1 per cent). In these depressing times of joblessness and tight money, free enterprise faces its toughest challenge. People hold large corporations, especially the greed of their leaders, squarely responsible for their woes. The lavish lifestyles of rich businessmen, repeated without break on television and newspapers alike, haven’t helped.
Have you felt similar undercurrents in India? Let me bring to your notice two recent incidents and the popular response to it. That may give some idea. One, the Haryana government wants to nationalise the Delhi-Gurgaon Expressway. The argument is that the private operator, the DSC group, has made a hash of it and commuters suffer huge inconvenience every day. The DSC group has indicated that it could consider exiting the project if offered the right price. Not a word of protest from any quarter. Two, Walmart has accepted that it is probing allegations of bribery in its Indian joint venture, Bharti Walmart. Under the Foreign Corrupt Practices Act of the United States, corporations of that country are expressly prohibited from bribing government officials anywhere in the world. The acknowledgment from Walmart that such a probe is indeed being conducted has given a huge boost to the lobby that is opposing foreign investment in multi-brand retail.
This is not to say that full-blooded socialism could return one day. But the greed of corporations, and their total disdain for scruples, has given free enterprise a bad name. People are searching for answers.
