Liberty Steel future questioned by unions

The IndustriAll Global Union, a Switzerland-based confederation of labor unions from about 130 countries, has issued a statement expressing concern that has "reached an all-time high level amongst workers” regarding the current state and future of the Liberty Steel business unit of the United Kingdom-based GFG Alliance.

The GFG (Gupta Family Group) Alliance, overseen by Sanjeev Gupta, has been the subject of an investigation by the U.K.’s Serious Fraud Office tied in part to the company’s role in the collapse of Greensill Capital in 2021.

In the nearly three years since the Greensill collapse, GFG and Liberty created a Restructuring and Transformation Committee and moved to restructure its debt as ways of reassuring lenders, government officials, customers and employees that the Liberty global metals production network is viable.

According to IndustriAll, those efforts may not have been enough, with the union confederation writing in an early February statement, “Trade unions representing GFG Alliance/Liberty Steel workers in Australia, Belgium, Czechia, Hungary, Italy, Luxembourg, Poland, Romania, the U.K. and United States have held a crisis meeting online to warn against the risk of Europe’s steel production capacities becoming severely damaged and the green steel challenge unmet due to Mr. Gupta’s irresponsible management.”

IndustriAll says more than 20,000 European Liberty steel workers have either been sent home, as production has stopped, "to wait in hope that their wages will continue to be fully and timely paid or live with the daily uncertainty and fear for the future of their jobs.”

The labor confederation lists Liberty mills in Ostrava, Czech Republic; Galati, Romania; Dudelange, Luxembourg; Liège, Belgium; Częstochowa, Poland; Dunaújváros, Hungary; and Piombino, Italy, as among those affected.

“The lack of liquid capital for many of GFG Alliance‘s European plants has led to a historically severe crisis, where suppliers’ bills are no longer paid, raw material is lacking, energy is cut and basic maintenance is suspended despite a hard winter, with frosts  which further damage facilities,” IndustriAll says. “The crisis has a direct knock-on effect for GFG Alliance’s suppliers, who are going bankrupt or are on the verge of doing so.”

The confederation singles out the Ostrava mill in the Czech Republic as one that is problematic.

“In Czechia, the Ostrava plant’s energy supplier Tameh declared insolvency in December 2023, while 117 of Liberty’s subcontractors onsite are suffering from the consequences of the crisis as they are deprived of heating or water,” IndustriAll says.

“Not only is the future of the Ostrava plant at stake, and that of its 6,000 workers, but it is an entire region and local supply chain composed of 30,000 indirect jobs and 900 small-to-medium enterprises (SMEs) connected to Liberty Steel’s operations which could pay the price of pure mismanagement.”

A lack of transparency is another complaint brought forward by IndustriAll. “Management keeps on depriving trade union representatives of the detailed information they are entitled to under European law about Mr. Gupta’s finances, investment plans and industrial strategy for each of GFG Alliance’s sites,” the confederation adds.

“Regional and national public authorities are no better off. Last week, the Czech Minister of Industry and Trade appealed to Liberty Steel, threatening the management board with legal action should the company fail to provide a solid industrial plan for the long-term growth of the Ostrava plant.”

The labor union confederation claims it saw the situation looming in 2018, when GFG purchased mills formerly operated by Luxembourg-based ArcelorMittal. While that transaction occurred more than four years ago, it cast negative light onto GFG as recently as last November.

“On the day the European Commission announced in 2018 that it required ArcelorMittal to divest those sites to complete the takeover of a major facility in Italy, all trade unions sounded the alarm bell,” IndustriAll says. “Speaking with one voice, they called on the European Union and member states to refrain from selling European strategic industrial assets to non-European competitors who refused to provide solid guarantees for the maintenance of long-term production activities at European sites.

“Trade unions warned specifically against Mr. Gupta’s dubious financial situations, which were casting severe doubts as to Liberty Steel’s ability to guarantee a viable management of the acquired ArcelorMittal sites.”

IndustriAll says its regional union members with employees working for Liberty Steel are requesting that: Gupta provide full transparency, including on his consolidated finances; the European Commission set up a crisis task force to defend steel production in Europe; and national governments attach social conditionalities and a commitment to industrial plans when granting public funding to Mr. Gupta.

“GFG Alliance/Liberty Steel trade unions are also considering industrial action in the coming weeks," the confederation says. "They will pursue their coordination at national, European and global levels."

In addition to its considerable and largely blast furnace/basic oxygen furnace-based footprint in Europe, Liberty Steel operates the scrap-fed Liberty Steel & Wire electric arc furnace (EAF) mill in Peoria, Illinois, which formerly operated under the Keystone name.

“Workers in GFG sites have reached [a] breaking point,” says Judith Kirton-Darling, acting joint general secretary of IndustriAll Europe, says. “It is a difficult time currently for steelworkers across Europe, but in the GFG sites workers are the victims of corporate mismanagement and the lack of investment and respect.”