The World According to Mittal

A post on Secular-Right India points us at a fantastic WSJ OpEd tracing the origins and rise of Lakshmi Mittal’s steel empire. Predictably, the WSJ loves Mr. Mittal

A takeover of Arcelor would take Mr. Mittal a long way toward realizing his vision of a dominant global steelmaker in an industry for decades characterized, and brought low, by fragmentation. To pull it off, Mr. Mittal needs to break an Old World taboo against takeovers, hostile or otherwise, involving a company dear to Continental protectionists’ heart. That this task falls to a man born in Rajasthan, and raised in Calcutta, is one of the more delicious gifts of globalization.

Alas, the sentiment isn’t quite universal. Despite swashbuckling his way through the developing world and transforming almost overnight one of the oldest, stodgiest industries in the world, 3rd Way advocates appear tougher to tame. They hit back with words which will strike some SM’ers as rather racially-tinged

Valery Giscard d’Estaing, the former French president, warned against giving into economic “laws of the jungle.” A former French finance minister referred to Mr. Mittal as “an Indian predator,” although his company is traded and based in Europe and he hasn’t lived in India for 30 years. Mr. Dollé, the Arcelor boss, said Rotterdam-based Mittal Steel is a “company full of Indians” that wants to buy his with “monnaie de singe.” The expression means “monopoly money”–Mittal’s offer is mostly shares–but the literal translation is “monkey money.” That double-entendre wasn’t lost on people.

Uncle Milt in a recent interview, pointed out that one of the great beauties of capitalism vs. politics was the way the former transcends race and creed -

The great virtue of a free market is that it enables people who hate each other, or who are from vastly different religious or ethnic backgrounds, to cooperate economically. Government intervention can’t do that. Politics exacerbates and magnifies differences.

Mr. Mittal – in response to a gentle, racially tinged prodding of a different sort seems to agree –

When I suggest the nice tycoon image might be the “Indian way,” he scoffs, saying, “There is nothing Indian here, there is nothing European here, you have to run a multinational company in a proper fashion with top professionals.”

Like Manish, I have a hard time reading about Mittal without seeing the Randian parallels and now, in Mr. d’Estaing’s complaints, we hear a different voice echoed – this time John Galt criticizing the interventionist politicians of d’Estaing’s ilk. This breed sees fit to pass judgment on men who triumph in –

arts you have never seen, over sciences you have never studied, over achievements of which you have no knowledge, over the gigantic industries where you, by your own definition of your capacity, would be unable successfully to fill the job of assistant greaser. [Atlas Shrugged pg 974]

Regardless of the French president’s feelings towards Mittal, it’s probably safe to say that Mr. d’Estaing’s rhetoric has likely done far less than Mr. Mittal’s actions to provide the French consumer with a cheap, reliable source of steel.

[most recent SM Mittal post - here]

12 thoughts on “The World According to Mittal

  1. Let those colonialist-minded dinosaurs squeal…brown (and yellow) are taking over the world! We are coming!!! :)

  2. The race-centric attacks on Mittal Steel reminds me of how American politicians jawboned Japanese investors when they were buying up prime U.S. properties in the ’80s. That makes it a flattering comparison ;) (Though, despite Mittal’s Indian passport, his company is based in Europe, not India.)

    I disagree with this statement of his, it’s thinking short-term:

    Of the two Asian powers, only India is politically open. “I don’t think democracy has anything to do with business.” Is freedom or stability more important? “Most important is growth,” he says.
  3. well business and polics are often intertwined. Why do the saudis have leverage in the world stage control of oil sector. The NSA in the 80′s invested in creating a library of VLSI components and associated tools and runs a complete fab. b/c it thought that US chip industry may lose out to japanese, so a government entity needs to be able to fabricate IC’s which may be needed for defense etc. Who knows some government may decide steel may be needed for defense production and opens up a steel production unit ?

  4. Fei, first of all, no one has suggested that creating a monopoly is right for whatever reasons. Secondly, you should do a detailed check on whether there WILL be a monopoly if Mittal Steel acquires Arcelor. From what I have read, that is not the case.

  5. Fei, I agree about the monopoly bit, but that is not the issue here, though I wish it was. The reason we are riled up is that the bid was rejected more on the basis of misplaced nationalism and prejudice against Asian countries/businesses instead of evaluating it purely on its merits. I think that’s what we are all protesting against.

  6. Please contact Arcelor and let them what you think of their racist CEO:

    E-mail: press@arcelor.com Phone: +352 4792 5000

    Corporate Headquarters Patrick Seyler (Executive Vice President): +352 4792 2360 Luc Scheer: +352 4792 4455 Jean Lasar: +352 4792 2359

    France Sandra Luneau: +33 1 41 25 65 04

  7. Some of the French and Luxembourger attacks on Mittal have been out and out racist. It’s consistent with the protectionist tinge in the French corporate world, but supercharged with colour bigotry (as opposed to the usual ‘le rosbif’ anti-British bigotry).

    But its also worth noting that Mittal, after he buys a company, usually sends over an Indian to watch over his investment. Nothing wrong with that — Li Ka Shing used to do something similar. Cultural ties matter and installing your co-ethnics in positions of power is something both the British and the French have been doing for centuries (it wasn’t Indians that ran the East India Company).

    But Mittal is being disingenuous when he says there’s nothing Indian about his company. I’d prefer he admitted his Indian-ness (and occasional preference for Indian managers) and instead noted that there is nothing wrong with an company with a indian-tilted corporate culture owning a French/Luxembourgish steel company.

  8. this dosent suprise me, mittal is from the Marwari community of India, they control most of India’s economy, Birla, Bajaj, Pittie, Modi, Ruia, Sunil Mittal,Siyaram Poddar, Jhunjunwala, Agarwal,Singhania, the list goes on… besides one ambani, some gujrati stockbrockers, a few south indians, one ismaeil muslim and tata’s, the entire economy is in and out dominated by mittal’s marwari community. Not like its a bad thing, their just good at it. India’s answer for world domination by the Jews