September/October 2019 Vol. 12, No. 5 No. 12, Vol. 2019 September/October ArcelorMittal USA 1 Company 1 Community1 Company 1 Magazine 03 John Brett: Turbulent times 3-8 09 10 12 It’s all about energy 50-year employees and From blast to blast furnace Health Week 2019 and the environment 50 years of achievements The Hibbing-Burns Harbor Reviving a co-worker, We’re focusing on our Opening a time capsule supply chain a heart health story challenges and opportunities at Burns Harbor and a journey toward fitness Shira Cohen, Jolice Pojeta USA Communications team Jolice Pojeta Liz Johnson and Amanda Scott 2 1 Company 1 Community 1 Magazine 1 | ArcelorMittal USA | September/October 2019 > Global News In conversation with Lakshmi Mittal A German newspaper, Frankfurter Allgemeine Zeitung (abbreviated FAZ), recently sent correspondent Marcus Theurer to talk with our chairman and CEO in a far-reaching conversation, reprinted with permission here. FAZ: Mr. Mittal, the stock we indirectly secure, for example, Q: Should EU competition Q: But your customers see market value of your group with suppliers, we talk about five oversight be more flexible things differently. They has halved within a year and to six times as many jobs. We are in mergers in the current want to buy steel as cheap the development of your currently in talks with the unions situation? as possible and customs European competitors is about short-time work and we M: Steel is a global product; duties lead to higher prices. similarly bad. How serious expect to separate from some we have global competition. The European automakers, is the situation of the temporary workers. ArcelorMittal We deliver everywhere, and we themselves struggling, are European steel industry? Europe has around 19,500 jobs are supplied from everywhere. outraged by the protective Mr. Mittal: In other parts of in this group. One-third of total steel produc- tariffs on the steel industry. the world, the situation is not so tion is traded worldwide. So, if M: We are not talking about no bad. But Europe worries me. The Q: A permanent problem in we analyze the market concentra- trade, just fair trade. Secondly, I steel industry is, so to speak, the your industry is that there tion, then we should look not don’t believe cheaper steel is the pulse of the economy as a whole, are too many steel plants only at the European market but solution for European automakers. and the European economy is in the world. What is the at the world market. Industry They need a strong partner who currently struggling with many excess capacity? indices show very clearly that can participate in the develop- problems. First, there is the trade M: Pretty big: 500 to 550 million the concentration of the steel ment of the new car models. war between the United States tons in approx. That’s a quarter industry in Europe is still much We’ve reduced the weight of the and China, which also affects of global steelmaking. The key lower than in the United States. steel and improved its strength Europe. Second, we have the to solving this problem is clearly And in Europe, there is no ability – by 30 to 40 percent over the growing tensions in European- in China. Chinese steelmaking to appeal: the decision of the past 10 years, working very Lakshmi N. Mittal, Chairman and CEO American trade relations accounts for nearly half of global Commission is final. closely with our automotive ourselves. Third, China’s production and China has a very customers. For such innovations, economy is weakening, which fragmented steel industry. It has Q: Could further acquisitions we have invested hundreds of is an important export market, to be acknowledged: China has in Europe also make sense millions in research and develop- and fourthly, Brexit is creating made progress and has taken for ArcelorMittal? ment. As sustainability matters further uncertainty. capacity out of the market in A: I think it is clear from our become of increasing importance, recent years. But more needs experience with Ilva and from the we believe that we will have to Q: ArcelorMittal announced to be done. Most important outcome of the Tata/TK merger, have ever closer partnerships two production cuts in though is how to have a level what the Commission’s view is with our customers working Europe twice in May and playing field with China. State of further consolidation in the together to solve challenges scared investors on the subsidies there should be cut European steel industry. We are that affect us both. financial markets. and unprofitable manufacturers focused on integrating Ilva into M: We had to act. In Germany, should leave the market. our European business and also Q: Also, when it comes the reduction of production in completing the acquisition of to protecting the climate, affects our steel mills in Bremen Q: Consolidation is also a Essar in India, which takes us into you are calling for help and Eisenhüttenstadt. But we also topic in Europe. The planned an exciting new growth market. from politicians in the take back production at sites in merger of the steel divisions Indian steel consumption per form of a green border Italy, Poland and Spain. Together, of Thyssen-Krupp and Tata capita is one of the lowest adjustment. Why? this is an annualized decline of has failed because of opposi- worldwide and there is a lot M: ArcelorMittal has a clear 4 to 4.5 million metric tons, tion from the EU competition of potential for steel demand commitment to reducing its CO2 or around 9 percent of our regulator. Would it have growth. emissions. We have just published European steel production. made sense? our first climate action report. M: I think that’s neutral. On the Q: On the other hand, it is not We have the ambition to produce Q: What does that mean one hand, consolidation is always true that European politics our steel in Europe carbon-neutral for jobs in the industry? good. It increases productivity is not already helping you. by the middle of the century. We ArcelorMittal alone has and performance. On the other Europe shields its steel are working on various technolo- 88,000 employees in hand, overcapacity in Europe industry against international gies, such as the use of biomass, Europe, the steel industry would not have changed. competition: tariffs of 25 the use of hydrogen and carbon are to be feared. This type Q: Rightly? more than 300,000. Thyssen-Krupp and Tata did percent are due for certain capturing. But we also need of border adjustment would, M: That depends on which agenda M: And these are just the direct not intend to reduce their import volumes. help for that. It is essential therefore, also have a more you have, which philosophy you jobs. If we include the jobs that production volumes. M: The EU announced safeguards that European politics provide a positive impact on reducing represent. If the goal is to help but they have not been effective. level playing field to ensure fair global emissions. domestic industry grow and shape Further action is also urgently competition. And that includes a American champions, then such needed, given the import tariffs green border adjustment so that Q: But are climate protection measures are at least temporarily that U.S. President Donald Trump imports have the same cost. tariff walls really the right make some sense. So, I can Our 10 sustainable has imposed on steel imports into answer? The world trade understand what Donald Trump the United States. Because of Q: The International Monetary system is already in the is doing. My fear is that many the customs walls in America, Fund estimates the price of biggest crisis since its European industries will not development outcomes producing countries, which have carbon dioxide emissions founding after the Second survive unless we support the so far been exporting heavily, are would have to be around $70 World War due to growing creation of European champions. making way for the comparatively a ton to meet the goals of the protectionism. open European market. Another Paris Climate Summit. That is M: If Europe really wants to Q: Protecting against import Our 10 sustainable development problem is that the EU’s safeguard almost three times as much as contribute to lower emissions in duties through tariffs could, outcomes are how we will clauses offer loopholes. It is too today. Could ArcelorMittal the sky – and at the end of the therefore, be justified, at least easy for the exporters to get shoulder such cost increases? day remember there is only one in the medium term, even in contribute to making a more around them. The impact is M: Yes, if everyone has to pay sky – then yes we strongly believe Europe, in order to enable sustainable future, from the way massive: we have a steel flood. this price, so if we have a level it is the right answer. Otherwise, national champions? Last year, the EU imported almost playing field. At the moment, all you end up doing is risking M: Yes, at least as long as, we make steel and use resources, 30 million tonnes of steel. Since only European steelmakers have destroying your own steel for example, there is no level 2017, imports have risen by 30 to pay a price for their carbon industry and not actually lowering playing field with imports from to how we develop new products, and to 40 percent. And steel exports emissions under the European the footprint of global emissions other countries.