Trade unions fear threat to social dialogue model at Arcelor Mittal

In recent months, the two major trade unions in Luxembourg, the Luxembourg Confederation of Independent Trade Unions and the Luxembourg Confederation of Christian Trade Unions, have expressed concerns about the new management style at the Arcelor Mittal group, which they believe poses a threat to the country’s traditional social dialogue model. The trade unions have recorded a growing number of complaints coming from the group’s companies and believe that the management lacks the proper negotiation skills capable of dealing with such complaints. As a result, the unions have indicated their willingness to mobilise their representatives and activists in an effort to preserve the quality of social dialogue within the company.

Arcelor Mittal merger

In early 2006, the Indian-owned company Mittal Steel, a world leader in the steel industry, launched a takeover bid for the European steel company Arcelor. After months of uncertainty, Mittal Steel won the support of the European steel manufacturer and the majority of its shareholders, including the Luxembourg government. According to a government announcement at that time: ‘In-depth negotiations between the directors of Arcelor and Mittal Steel have led to the definition of joint industrial plans and a corporate governance approach based on that of Arcelor. In particular, the two partners have agreed that the new group must follow best practice in terms of dialogue and social responsibility.’ The merger enabled Arcelor to retain the group’s headquarters in Luxembourg and was not supposed to have any negative impact on its individual sites or on employees’ jobs.

New management style

Nevertheless, in November 2006, the President of the Board of Directors of Arcelor Mittal, Lakshmi N. Mittal, announced to the media the possibility of establishing a single information technology (IT) department for the new group; at present, Mittal Steel’s IT system is located in Dubai, whereas Arcelor’s platform is situated in Luxembourg.

The trade unions were concerned that this reorganisation could jeopardise about 100 jobs in Luxembourg. They were also annoyed about the fact that they had only learned of this information through the press. According to the two main trade unions in Luxembourg – the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschaftsbond Lëtzebuerg, OGB-L) and the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB), brought together within the non-profit organisation OGB-L/LCGB Sidérurgie – this amounted to ‘a procedure which does not reflect the practices and agreements of the Luxembourg co-management model, which had not previously been called into question’.

A delegation subsequently met with the group’s directors. At the meeting, the trade unions put forward their concerns regarding the preservation of the ‘Luxembourg model of social dialogue in the steel industry’. Management of the Arcelor Mittal group clearly recognised the importance of this model and affirmed its desire to pursue social dialogue in accordance with the arrangements of this model, including within the setting of the tripartite steel industry body, which brings together the government along with the employers and trade unions in the industry. As for the establishment of a single IT department, the management explained that this was simply a plan which was under consideration, and that it would have no impact on jobs in Luxembourg.

Trade union concerns

The trade unions’ fears have nevertheless not been allayed. For several months, the unions have referred to a new style of management within the Arcelor Mittal group. In particular, they are concerned by the messages that they have received from the various companies within the group, which seem to indicate a deterioration in the quality of social dialogue in relation to employees in general and especially with regard to the trade union representatives.

The trade unions have also noted a persistent increase in the number of complaints: for example, with regard to a lack of personnel, unrealistic work deadlines, failure to uphold days off, problems relating to safety at work, and a deterioration in the work atmosphere. Moreover, the unions consider that there is a lack of negotiators at management level whom they regard as being sufficiently capable of engaging in social dialogue in an adequate manner. At the same time, they are concerned that these mediators lack the decision-making powers necessary to remedy the problems identified on the shop floor.

According to the trade unions, a meeting with management in the ‘long products’ department’ at Arcelor Mittal on the subject of future social dialogue at the Luxembourg sites failed to yield any satisfactory results. As a consequence, the unions announced that they were planning to organise a meeting with their delegates on 16 March 2007 to protest against what they consider to be an ‘unhealthy situation’.

Odette Wlodarski, Prevent

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment