Government adopts Czech steel industry restructuring plan
The Czech government approved a plan on Monday to restructure the Czech steel industry. The Minister of Finance, Jiri Rusnok, announced that the Czech Republic's struggling steel industry may be rescued by an arm of the world's second largest steelmaker, LNM Group, owned by Indian-born billionaire Lakshmi N. Mittal.
Rusnok said the government will deal exclusively with LNM Holding, known also under the trademark ISPAT International, as a possible buyer of the country's largest steelworks, Nova Hut. Mr. Rusnok said the plan also called for a merger of Nova Hut and two other steelmakers, Vitkovice and Vysoke Pece.
Mittal, who now lives in Britain, has built a global empire of steel factories and is best known in the United States for rescuing the Chicago-based Inland Steel in 1998. Last year he bought Romania's largest steelmaker, Sidex.
Over the past decade the Czech government retained control of the largest of the country's communist-era steelworks, based in the Ostrava industrial region in North Moravia. Efforts to find private buyers sputtered out year after year, forcing the companies to dismiss thousands of workers, cut production and delay modernization.
The restructuring plans were closely watched by the companies' unions, who feared further redundancies. The trade unions in Nova Hut had even planned protest action should they find the outcome of the government negotiations unacceptable. Finance Minister Jiri Rusnok said on Monday though that the Unions had no objections to the latest plan:
"The Trade Unions welcome the effort to find a strategic partner for the steelworks as soon as possible. We are doing our best to speed up the process as much as possible for the sake of the trade unionists, because if Nova Hut closes down, there will be no trade unions either. I think they understand this. Time is of the essence because we know these companies are in a crisis and any week now could mark their collapse."