LUXEMBOURG (dpa) – The huge electrode bores its way into the scrap before turning on the heat.
The pillar of graphite needs just an hour to melt down 190 tons of rusty metal and create 155 tons of new steel and the molten mass glimmers almost white as it passes the 1,600 degree centigrade mark.There’s hardly a worker to be seen at the blast furnace in the automated Arbed steelworks in Belval, Luxembourg. This is what economists call rationalized production.Engineers in air-conditioned cabins watch the process on screens, monitoring activity with the aid of computers and sensors. The cranes, furnace controls and steel rolling mills are all operated at the push of a button.While the steel is hardening on the shop floor the bosses are hammering out their own set of plans. Three European steel companies, Arbed, Aceralia of Spain and the French concern Usinor are forging the world’s biggest steel firm with a combined output of around 46 million tons of crude steel a year.“It won’t be quite as bad as the steel crisis in the 1970s,” said one 40-year-old engineer although he and his colleagues are worried about losing their jobs.“People throughout the company are nervous,” admits veteran steel worker Fernand Wagner, now Arbed boss. He is taking early retirement and handing over the baton in Luxembourg to Frenchman Guy Dollé.At the palatial Arcelor headquarters in der Avenue de la Liberté in Luxembourg City the steel managers in their offices of gleaming marble stress that their aim is to protect the employees. This is not about concentrating power but providing a better service to customers, they chime. “We will be in a stronger position than before to ensure that we survive in the age of globalization,” said vice-president of the concern, Francis Mer.Arcelor will control around five per cent of the world steel market. Annual production of 46 million tons, a turnover of 30 billion euros (15.3 billion dollars) and with 110,000 people in the payroll, this new company spanning four continents alliance will be far ahead of Nippon Steel of Japan, the former number one and South Korea’s Posco.Breathing life into the global steel giant are the three companies merging their shares with the blessing of the European Commission. Admittedly the Eurocrats are trying to limit the new concern’s power by forcing it to part with a number of steelworks and distribution companies. Vehicle manufacturers and other sheet steel consumers are watching events with a critical eye. They say the world number one is making too much sheet steel and zinc-coated steel and has such a powerful position in the marketing of carbon steel that other competitors will suffer as a result. The sell-off covers around 1.1 million tons of steel.Affected are plants in Italy, Portugal, Belgium, Luxembourg, France and Spain – according to Arcelor boss Dollé, about 1,200 jobs in all. During negotiations on selling the steel plants he has promised to pay particular attention to the “social repercussions” of the restructuring. Jobs in Germany are not affected and so the Eko-Stahl group in the eastern town of Eisenhuettenstadt will be kept on as part of the new concept.Around 7,500 workers are employed in the four Arbed plants in Luxembourg and they fear for an end to the Duchy’s unique social model. Luxembourg parliamentarian Aloyse Bisdorff described the fusion as a brutal takeover by Usinor, saying the alliance sounded the death knell for Luxembourg’s steel industry.The trade unions are also fearful that social dialogue may be at an end and have threatened industrial action. At the same time, the government-aligned unions favour the fusion. After all, each organization has its own representative in the 18-person administration board.All over Europe steel works employees are holding meetings. At the gates of the Eko-Stahl works in Eisenhuettenstatt the braziers are burning outside for the first time in six years as 3,000 staff face an uncertain future. Arcelor is the third new owner since reunification and the firm has already said the distribution and finance sectors are to be restructured.In the mid-1970s – up until the start of the steel crisis – around 27,000 workers live off steelmaking in Luxembourg, today there are only 4,500, or 7,500 if those in steel processing are included. As Arbed’s marketing expert Marc Schonckert recalled: “That was a national disaster.”“The pressure to step up productivity and the competition are both tough but no one at Arbed was sacked – everything was done with a minimum of “social upheaval”. The state stepped in and paid for work instead of unemployment benefit. Rationalization made it possible to reduce the number of workers per shift at the furnace from 40 to seven and triple production at the same time.Iron ore has been mined in Luxembourg for decades and so this agricultural state was able to develop into a powerful steel player. In 1982 Luxembourg halted mine production and began importing raw material. After a while, that was halted too. Now only two of the huge furnace tower above the countryside where there used to be 30. The last one was fired up for the last time in 1997 and is now earmarked for preservation as an industrial monument.The industry will continue to contract as a result of global overcapacity, Arcelor bosses are convinced. That was one of the reasons why they announced the merger deal on February 19 last year. Francis Mer calls it a consolidation plan and Arcelor hopes to be saving around 700 million euro a year from 2006 onwards.Meanwhile the sparks are flying again at Belval as the slag is released from the blast furnace – it is later used as asphalt on roads. After being injected with chemical additives such as limestone and carbon the molten metal flows into a water-cooled continuous caster. The steel slowly solidifies and is drawn through a series of rollers which give it a final shape.The beams are cut into sections of 10, 20 and 30 metres and stored in the shed next door. Hundreds of rusty girders and billets wait here before being taken to customers by rail.Arbed specialises in items like girders where demand is fairly constant. Around 900,000 tons of steel are produced in Belval alone, using a large amount of scrap from Germany.Marketing man Marc Schonckert prefers to stress Belval’s shiny steel products rather than profusely-sweating workers coated with dust. Arcelor steel can be found in one of three European cars as well as in machine tools and railway lines, he says. European building firms derive around 20 per cent of their steel from Arcelor whose products are used to make washing machines, refrigerators, cooking and beverage cans.Alternative products like aluminium are giving the steelmakers a hard time, especially since the lightweight metal is seen as more futuristic.The trend has forced Europe’s steel concerns to join forces in an advertising initiative for mainland Europe called “Made-of-Steel” (www.made-of-steel.com) in a bid to boost the product’s image. The campaign is set to last for three years and cost 54 million euros. Companies from Germany, Belgium, France, Luxembourg, Austria, the Netherlands and Spain are taking part.The advertising campaign stresses the ecological advantages of steel, with steel seen as a more natural product than aluminium owing to its high iron ore content. It is also more environmentally- friendly to make. Sheets, tubing, cable and wire are fashioned from a material which has been known to man for 3,000 years. Around 845 million tons of crude steel were produced worldwide in 2000, half of it from scrap. Of that figure only 19.5 per cent was made in European Union countries.
