New Role Puts Mittal Son in Line for Top Job
Aditya Mittal has taken charge of ArcelorMittal’s biggest and most problematic unit in a move seen by analysts as paving the way for him to eventually succeed his father, Lakshmi, as chief executive of the world’s biggest steelmaker.
The move also marks an effort by the company to find new ways to boost the profitability of its Europe division, which has been hit by weak demand and the negative impact of the strong euro.
Lakshmi Mittal, 60, is currently chairman and chief executive of ArcelorMittal, while also having a 42 percent stake. Although he has given no sign of wanting to reduce his role in running the company, analysts have for some time believed that he may at some time over the next few years wish to hand over the chief executive’s role to the 35-year-old Aditya.
ArcelorMittal said: “[Lakshmi] Mittal is very committed to the business and has no plans to scale back his responsibilities. Any comments from third parties are pure speculation.”
It added: “We are making the change [in responsibilities] to bring fresh thinking into how we approach our various businesses.
“However, the strategic direction of the company remains the same as before.”
Aditya Mittal has up to now taken charge of ArcelorMittal’s operations in the Americas. This is a job seen as less tough than running the Europe unit, which has the lowest rate of earnings per tonne of all the company’s four steel divisions.
He will continue as chief financial officer with a special role in looking at potential acquisitions.
The younger Mr Mittal has won plaudits from many steel observers for his role in running ArcelorMittal. Any move to push him into the top job would be relatively uncontroversial.
Christian Obst, an analyst at UniCredit, said: “This [the move involving Aditya] could give him useful preparation for becoming the chief executive should Lakshmi Mittal decide to step down at some undeclared time.”
According to John Klein, an analyst at Berenberg Bank, the switch to being in charge of Europe would give Aditya Mittal “additional management expertise” necessary if he were to step up to the most senior job.
In announcing the company’s first-quarter results this month, Lakshmi Mittal said he was “not happy” at the level of underlying earnings in the company’s European operations – which in the latest three month period were a third below those in the Americas.
Some analysts believe the company may have to contemplate permanent closures to some of its main operations in Europe – which are largely in France, Belgium, Spain, Poland and Germany.
However, ArcelorMittal says it is “not contemplating large scale reductions” in its plant network in Europe on the grounds that it is confident that demand will slowly return in the next few years.
As part of the reshuffle, Michel Wurth, who was responsible for the company’s European division, will move to take charge of its bar and rod steel products globally.