French left to present law against industrial closures

PARIS (Reuters) - Companies that shut down viable industrial sites in France rather than selling them could be fined if draft legislation by lawmakers from the ruling Socialist party becomes law.

The bill being presented on Tuesday is the fruit of repeated promises by Industry Minister Arnaud Montebourg to pass a law to bar firms from shutting factories, as a stream of industrial layoffs has pushed jobless claims to an all-time high.

President Francois Hollande is struggling a year into his term to make good on a campaign pledge to pull French industry out of the doldrums. His approval ratings have sunk to as low as 25 percent, a record in modern France.

The draft, dubbed the "Florange Law" after an ArcelorMittal steelworks in eastern France where two blast furnaces were shut last week despite efforts by the government to keep them going, is due to be voted on around mid-year.

Hollande visited the site during his election campaign and, to the cheers of steelworkers, pledged to pass a law forcing viable firms to find buyers for sites they wanted to close.

This month, the workers erected a tombstone to him engraved with the word "betrayal" as ArcelorMittal turned off the furnaces it says are no longer as economically viable as others it operates in northern France.

No law could ban closures under the constitution, but the bill would instead force companies to seek buyers for sites they want to close and then fine them the equivalent of roughly 28,000 euros (23,675 pounds) per worker if they refuse to sell or go ahead with a shutdown without properly seeking a buyer.

The bill also contains measures to protect firms from investors wielding too much control with minority stakes, essentially by lowering the threshold of ownership that triggers an obligatory takeover offer to 25 percent from 30 percent.

Industrial decline has continued apace in France. High labour costs and other brakes on competitiveness have dragged down industrial exports with the loss of hundreds of thousands of jobs, sending unemployment to 10.6 percent and rising.

"There are two counter attacks," said Socialist Party deputy Francois Brottes, head of the National Assembly's economic affairs committee and one of the lawmakers pushing the bill.

"The first is an obligation to take steps to seek a buyer, on other words seek to rebound rather than submit, and the second is protection against hostile takeovers," he said.

The bill to be presented on Tuesday would give companies three months to try to find a buyer.

If a company refuses to sell, or says it has not to have found a buyer and is then found by a commercial court to have not looked hard enough, it would face a fine of 20 times the minimum wage for each worker concerned by the shutdown.

The law would apply to companies with at least 1,000 employees worldwide or with 50 at a particular site.

(Reporting by Emmanuel Jarry; Writing by Catherine Bremer; Editing by Alison Williams)

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