the threat of nationalization.

Notorious for having one of the most liberally socialistic economies in the developed world, France is once again swinging its iron fist. ArcelorMittal is the world’s largest Steel producer and is headquartered in Luxembourg. Currently, company operations in France employ nearly 20,000 individuals at manufacturing and steel complex sites. With the weakening demand in Europe, ArcelorMittal had planned to eliminate usage of two blast furnaces in Eastern France. While there would be collateral damage, in terms of potential layoffs, it would bolster the viability of company success for ArcelorMittal by allowing them to remain economically and financially stable. But instead of moving forward with operative plans, the French Prime Minister Jean-Marc Ayrault intervened with a politically expedient motivation and blackmailed ArcelorMittal into keeping all French sites in service at full capacity. Essentially the Prime Minister offered an ultimatum to the firm: either keep operations at full capacity or face the nationalization of your company. ArcelorMittal could have chosen to sell the facilities to a competitor, but no company would dare risk such an investment. Opting to refrain from government control, ArcelorMittal vowed to invest $233.6 million into the facilities to keep facilities functioning.

The actions of the French government towards ArcelorMittal were not only despicable, but they were unethical and an assault on the principles of capitalism. The threat of nationalizing a foreign entity raises real concerns in the international business community. If France could successfully bully one company into accepting the nation’s politically motivated desires, what would stop the government from forcibly controlling other entities? Therein lays the dogma of the socialist agenda and its antagonistic approach towards free trade. Effectually government control stifles competition, falsifies monetary value, and inflates unsubstantiated job creation. To illustrate, recall the nationalized coal industry in the UK, which at one point employed 70,000 workers. The bureaucratic industry was a dichotic failure as 75% of coal companies were losing money on a yearly basis. The only reason any coal company remained operational was because the UK government poured nearly $3.0 billion into the industry every year. Fortunately, Margaret Thatcher was elected as Prime Minister. She successfully battled the industry and privatized coal. As a result the bloated commerce was reduced to what was necessary to remain economically viable, including a reduction of employees to 3,000 individuals, and garnered success within the free market.

While France was unsuccessful in commandeering ArcelorMittal in the sense of nationalization, it has, in another sense, bound the company’s freedom by forcibly inciting the company to operate as if it were a bureaucratic entity by pouring funds into a weaning venture. Subsequently, ArcelorMittal will have to redevelop its supply chain. This may include closing operations in other countries where it has substantial capital investments so that it can streamline and facilitate a financially successful future.

Arguably, developing a stable and financially successful future is the ethically responsible priority of any firm. Biblically, this point is echoed in the parable of the talents that Jesus narrates. In this story, three servants were entrusted a portion of the master’s wealth and commanded to invest the moneys. Two of the servants went heartedly to work and doubled the investment .The third servant, however, buried the investment and later had nothing to show for what he was given. This servant was rebuked and what he had was taken away from him (Matthew 25:13-30, ESV). Similarly, government intervention and regulation of business is likened to wasting investment. It impacts global business as it discourages companies to operate in a financially responsible way. Thus companies struggle with resulting consequences of inefficiencies and unfounded expectancies. The recent closure of Hostess is an excellent example. Between government regulation of the industry and the selfish demands of governmentally permissible unions, the company was faced with meeting ludicrous demands or facing closure. Unfortunately, though Hostess sought to meet the demands and produce a financially and ethically principled plan, the organization was forced into closure and as a result many individuals, some quite deservingly, lost their jobs. Now it is ArcelorMittal that strives to meet the demands of the French government and its socialistic regulatory policy. And likely enough, it may only prolong their inevitable fate unless the steel market can regain strength.

Overall I am not surprised with the actions of the French government and their abuse of power. Politics and supremacy, this day in age, seem to trump ethically responsible judgments that would benefit society as a whole, through free market extremities. Their socialistic agenda is a noxious pollutant to businesses globally as growth is stifled by discouraging incentive with the unreasonable excuse and falsely defined doctrine and notion of demanded fairness.

http://online.wsj.com/article/SB10001424127887324205404578151383591045230.html?mod=WSJ_business_whatsNews#printMode

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