Luxembourg - Industry

From the Industrial Revolution through the 1970s, the steel industry was the backbone of the Grand Duchy's economy. In 1974 the nation produced 19 tons of steel for each inhabitant, and metal exports accounted for two-thirds of exports. However, lower demand and the energy crises of the 1970s caused a dramatic decline in the industry. By 1992, steel exports made up only one-third of Luxembourg's exports.

The government-supported conglomerate ARBED, formed to combat the steel crisis in the 1970s, shifted from producing general bulk steel to manufacturing high-quality specialized products such as galvanized metal sheet and metal wire, resulting in the replacement of older blast furnaces with sophisticated electric furnaces. In 1970, there were 30 blast furnaces; by 2000, there were none, but there were 3 electric furnaces. Reforms continue, and ARBED has set aside an 18 billion-franc investment fund for continuing modernization. Despite reductions in the industry, ARBED is the largest private employer in Luxembourg with 7,300 employees. The company remains the fourth largest producer of steel in the world and exported 22 million tons of steel products in 1999.

The Luxembourg government has aggressively tried to diversify and attract other industries. Goodyear has built several plants to produce tires and has become the second largest private employer in the nation with 3,500 employees. Many chemical companies have also built factories in Luxembourg. The Du Pont company has 1,160 workers at plants which produce polyester filaments (mylar) and another 150 workers at a plant which manufactures photographic film. Other major chemical or plastics companies in Luxembourg are Rubbermaid, T.D.K., and Recording Media Europe. The rubber, chemical, and plastics industry accounts for 10 percent of total employment in the Grand Duchy.

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