The frontpage news this week has been dominated by the ongoing saga of Mittal Steel’s attempted take over of Arcelor. What is particularly interesting is that leading Indian politicians have called European attempts to block the move as acts of xenophobia (or racism). This lead Jacques, In Delhi earlier this week, to word a refutation of the racism claim.
Certainly, wants to hold onto its independence and the threat of job-cuts, a typical Mittal tactic, would be bad for Europe. But all that is just business sense.
What is interesting is the heads of Indian government raising the spectre of racism here, which I think is a false and specious claim, but also a revealing commentary. It smacks of a childish, “your not letting me into your club,’ mentaility, which sadly reflects the extent to which India is not yet reconciled to its place in the world. Mittal Steel is a big, no make that huge company. That an existing European company would want to ward off a take-over that would dilute its identity is a normal part of business life. To argue from that to a claim of racism seems odd in the extreme.
I recall waiting in line for a cinema to open (here in Delhi) and we asked the attendant if we coud go in, only to be advised the cinema was being cleaned. A few seconds later the person came back and said the cinema was now clean, as we handed over our tickets, the Indian woman behind us said (in a very well educatated voice), “it is good to see colonialism is alive and well.”
We didn’t in anyway change the situation there because of our “whiteness” and I’m not sure we were “colonising” the cinema. to me what that comment revealed is the same as what the comments over Mittal steel revealed; namely a victim mentaility. It is also a form of self-protection. maybe if that lady had asked if the cinema was ready, she would have gotten the same response as us. Maybe if Mittal Steel was a different sort of company with a different ethos, there would be less protest at its planned take-over.
The truth is India has emerged from it’s colonial past as a vast and powerful country with great wealth and growing influence. However, far too many people here (including powerful politicians) still believe they are being surpressed, held-back or being discriminated against. It is time for them to just wake up and drop the empty, self-defeating and frankly overdefensive rhetoric.
Technorati Tags: Mittal, Arcelor, India, Post-Colonialism
Fernando Gros is a guitarist, composer, photographer and writer based in Hong Kong. Born in Santiago de Chile, Fernando grew up in Sydney and has also lived in London and Delhi.
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hey buddy,
i read ur post. all i have to say is get used to feeling insecure. India and indians will outsmart and outwit your peoples. As long as technology exists and indian techies continue to be produced at an alarming rate. Some european nations will have to compete harder and harder.
YOu might be working for a company based in new delhi in ten years.
thanks for your comment, let me clarify a few things.
first, as far as mittal steel, the only issues with them has to do with corporate governance and with the the way they treat employees of the companies they buy out. that is all. interestingly, since i wrote this blogpost, mittal steel has indicated they are going to review their comporae goverence and have sought to make assurances about employee management. that’s good business leadership.
and that is why, to me, it seems wrong for sections of the indian media and leadership to try and turn the issue into one of race.
as far as insecurity about indian sucess; well that is not the point of my post of any post on this blog. jet taking over virgin, reliance buying vodafone, tata incorporating mitsubishi; all those possibilities are perfectly fine by me.
just don’t make those scenarios, which are about economics and commerce, about good business and smart leadership, into questions of “your peoples and my peoples.”
Basically the Euro-centric people are scared about losing their jobs.
Mittal is providing best premium offers for the shareholders and will hold a better consiidation of the fragmented steel industry, which is good for Europe.
So called european culture is over-rated and obsolete.
P.S
Please do enlighten us if Russia’s Severstal has the same european corporate culture as Arcelor, with no intention of firing people once they merge.
It is quite amusing to see the French minister crying at an Indian while praising Russian oligarch Serverstal for less money and same end results. Good business indeed.
Its funny that Guy Dolle called Mittals offer as “Money Money” and “company run by Indians”. Then Kinsch goes on to call Mordachov “a true European”. What is that, a compliment ?
When Tata took over Tyco’s global cable network or when Reliance took over Flag, the US government approved it even though it had security implications. Now that is what is called a true capitalist nation.
When Lafarge took over Indian cement plants, they had no problem. May India needs to rethink about all the Airbus orders it has placed, Boeing would love to have it. I hope the Indian companies hurt the French where it hurts them most, the economy.
Fernando,
If you follow Guy Dolle and other’s comments in the past six months, it is quite clear they border racism.
We have seen several take-over battles but havent seen such comments before anyone will classify them as racist so you cannot really blame the indians. Some Indian politicians may have gone a little too far, but this has a basis and I am adding some of the comments here:
1. Guy Dolle, says Mittal wasn‚Äôt “one of us” and that he “didn’t share their values”.
2. Apart from noting that Mittal’s company was “full of Indians”, funny because the company is based in Luxembourg and spanning five continents. he said Mittal wants to buy Arcelor with “monnaie de singe” which could mean “funny money” but literally translates into “monkey money”. How can one derive pure business sense from this one?
3. Kinsch comments: “Mr. Mordashov [head of Severstal] can speak German and has seats on European boards”, Mr. Kinsch said. ‚ÄúHe‚Äôs a true European,‚Äù Mr. Kinsch said.
Again whats the business sense here? isnt it logically pointing toward ethnicity. ‘He’s a true European.’ Unlike Lakshmi Mittal, a UK citizen who speaks English but happens to be brown isnt that implied here?
4. One French minister called Mittal an Indian predator. Dolle went on to add that European steel was like “perfume,” and Mittal’s steel like “eau de cologne.”
The problem as one put it, is “that Lakshmi Mittal is Indian, and that India was more reassuring when it was not a new emerging power, equipped with multinationals on the march.”
You are wrong in accusing Indians of being child-like in interpreting Arcelor behaviour. I am interested in knowing what you think of the “unusual” comments by the CEO and President I have listed.
Severstal deal was much inferior to Mittal yet touted by Arcelor execs as the best option. it was rightly rejected by the share holders coz they care about the money and not the color of it.
If one truly studies this battle, they will write an article about continued Protectionism in Europe coz thats what it is and with a tinge of racism.
Luxembourg, recently adopted a “reciprocal” law in an effort to strengthen Arcelor’s defense. The country is also working on a bill to allow companies, and Arcelor in particular, to adopt poison pills without shareholder approval. EU has been constantly warning the countries to lose this behavior.
India’s commercial relations with France were strained recently after the flamboyant Vijay Mallya offered to buy Taittinger. The French were upset with the idea of an Indian controlling a company that is part and parcel of popular French history. Taittinger was finally sold to a French regional bank for 849 million dollars, against Mallya’s offer of 750 million dollars.
On the other hand, when Lafarge went on a buying spree in India, markets decided and the government did not interfere with business. Airbus is slated to get 750 jets order by 2025 from India alone. Indian Airlines and Kingfisher chose Airbus over Boeing.
So India is quite mature when it comes to business ethics; its EUR nations that need to let go of their childish attitude “We will enter your markets but we wont let you in ours”.
Manali, thanks for your considered response. You are quite right to point out some of Dolle’s comments, many of which came after I wrote this blogpost. My main concern with with the reponse of some sections of the media and with Kamal Nath’s comments in particular. Playing the race card was not in India’s interests. That’s my opinion and that is all the blogpost was about.
The Severstal “deal” was not good business practice in my opinion. My blogpost predated it by quite a while.
The important business point is that Mittal Steel listened to the criticisms, changed the offer, made some adjustments to their corporate governance and it looks like they will be successful. Good for them. That’s the way to respond as a mature business.
The Tattinger deal was quite different to the steel deal.
Anyway, my point was never to attack Indian businesses, quite the opposite. I don’t have any more to say on this topic without just repeating myself.
Fernando, why aren’t you taking care of your poor people in chile and helping the blacks and indians there? I thought you were a christian.
Race card is the best option to make concessions. Talk about race problems in your own country. It’s not India’s fault if South Ameica is so poor or that we are the 12th richest nation in the world in GDP while Australia is way behind.
Making silly racist remarks about how Mittal changed to appease Arcelor is so low, are you so ashamed of your own latino origins that you want to be white? Mittal is the new Wallenberg and an ispiration for the new generation of Indians who will rule the world economy in the coming decades.
So stop being so jealous and learn to be humble my little amigo.
P.S
Fernando, are you a right-wing Christian who supports Pinochet? I think that’s why you don’t care about your poor and natives in Chile and are hiding in Australia for a better life? I think so. If not, you are still hiding from you brothers. Isn’t hypocrisy a sin in christianity?
Isn’t Chile owned by America? Oh yes, it is. How could I forget the monroe doctrine. Isn’t Chile crowded with Nazi’s?
So, stop getting so jealous and bitter my dear friend and take care of your own back yard. All talk and no show, tsk tsk.
I have chosen to approve both the comments from “V.P.” because I think they might be interesting to regular readers of this blog. Make of them what you will.
It is a racial issue since europeans make no noise when Canadians or Americans buy their companies. There was an article about an Indian company trying to buy a wine company in France and the locals were up in arms and forced their local bank to make on outrageous bid that is not economical. It does not matter, old europe is precisely that.
As for V.P, I agree with him. I would like to know what your relation to Chile is and why are you picking on India. Indians are doing whats best for India. Nothing wrong in free enterprise or fighting for the interests of Indian citizens. Another interesting note is that Mittal is based in Holland, not India and still there was an uproar.
PIcking on India? That is just plain absurd and a claim that does not hold up based on the balance of my posts on the country where I lived for three years and the country which my daughter considers to be her home.
How does saying India is “vast and powerful country with great wealth and growing influence, consitute picking on the country? How does saying “jet taking over virgin, reliance buying vodafone, tata incorporating mitsubishi; all those possibilities are perfectly fine by me,” constitute picking on India? How does responding to Mittal’s actions after my original post by saying “Good for them. That‚Äôs the way to respond as a mature business.” constitute picking on India? How does saying “, my point was never to attack Indian businesses, quite the opposite,” constitute attacking India?
It doesn’t. It doesn’t because at every stage my point has NOT been to attack India, but to make a simple point about the way this story was framed an reported upon.
And here I am again repeating myself. I blogged this story because I was living in India and interested in the way this story was being reported. It just seemed to be wrongly framed. It is a blog about the reporting on Mittal and government responses, not about Mittal. How anyone can extrapolate from that a broadside against India is simply beyond me.
Companies in Europe object to take over bids all the time for all sorts of reasons and geographic fit is freqently one of them. I have no interest in defending European business culture, it has many faults. But it doesn’t appear to me that Europeans are singling out Indian businesses or Indians in Business for any worse treatement that that dolled out to other countries. If someone wants to start a blog to dispute that point then great, I’ll read it with interest.
As far as my country of birth, well why should I have to defend myself? I have lived in 5 different countries and in not long, my country of birth will be the one in which I lived the least amount of time. I don’t define myself in terms of national identity, but if others choose to do that for themselves, that is their choice.
Hi Fernando. It is sad to see the tone of some of these posts. Really nasty. I’ve always wanted to visit India and your words and pictures make me want to go even more. Thanks for the blog.
Hi Fernando,
I was searching the net for some thing else and ended up on this old blog of yours. I just could not help myself but write a response.
I wont start with Guy Dolle , I think it is more or less accepted fact now that he was racist . But now as I am writing this there is another business story unfolding i.e. Tata owned Taj Hotels Vs Orient Express , there are similar comments made by orient express. I think there is subtle racism there . Though I wont say that majority is racist, no it is NOT especially in corporate world of America but still there are still elements there and I am sure they will be also used to the globalisation .
And I definitely agree to your original blog it was definitely not against India . I am also an Indian and a hindu and I do find that some of the response to your blog were nasty and deragoratory ( I can call it racist ) . I apologise on their behalf .
In my opinion Indians are still getting used to the globalisation , they are still getting used to the foriegners in their country. after many decades of closed economy they are being exposed to wester culture via satellite television and hollywood , which may not be precise in depicting the american/western society and then they have their hangups. and some of it showed in their responses here with the SMS language they used .…..
Cheers,
Cant understand what this fuck is all about. Some lad bought another company. NORMAL. Some so called leaders played for the gallery. NORMAL. Some another lad wrote what he thought about it. NORMAL. Every other lads thinks its worth to comment.INCLUDING ME. NORMAL.
So if everything is NORMAL, whats the fun in talking about it?
I am Indian and there is nothing Indian about Mittal ( baniya shitty community ). The west needs to be aware that the future governments do not make deals with these corrupt people. They are the jews of India and they have patronage to no country expect money. Fuck Mittal !