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Madrid plant to remain closed indefinitely
Economics

Madrid plant to remain closed indefinitely

14.03.2012 From our online archive
While unions had expected ArcelorMittal to announce the full closure of the Villaverde steel work in Madrid, the steel giant's European council decided on an indefinite closure on Tuesday.

(CS/rw) While unions had expected ArcelorMittal to announce the full closure of the Villaverde steel works in Madrid, the steel giant's European council decided on an indefinite closure on Tuesday.

The plant could reopen in some six years' time, though no budget was foreseen for the maintenance of machinery, according to a French union spokesperson speaking to news agency AFP.

Unions see the tentative indefinite closure merely as a new ArcelorMittal speak for permanent shut down, said the LCGB's Charles Hennico.

Spain's demand in steel has reduced dramatically, as the construction industry collapsed during the financial crisis. The Villaverde site produces mainly small to medium sized joists. Currently, there is an overcapacity of five to one in this sector, said Hennico.

ArcelorMittal said at the meeting in Luxembourg that the plant might be saved if the demand picked up again.

Of the 325 employees, around 100 are intended to keep working on the Madrid site in a series of different functions. The other 225 are meant to be distributed to other steel works, said Gonzalo Urquijo, head of ArcelorMittal Spain.

It is unclear, however, how this reshuffling is meant to be accomplished. At another site producing flat steel close to Bilbao production was halted between November and December last year. While the plant was meant to reopen early this year, the closure has been prolonged. Here, too, production is said to resume when the economic situation improves.

The future of other sites across Europe remains uncertain at this point. There were no announcements on the sites in Rodange and Schifflange, but Hennico commented that “we are continuing to speak with Mittal.”