PARIS — It has been only a month since the French government, concerned about the country’s declining competitiveness, began its “Say Oui to France” advertising campaign to attract foreign investment. But ArcelorMittal, the Luxembourg-based company with Indian roots that is the world’s biggest steel maker, has been hearing a distinctly harsher message.

“We don't want Mittal in France because they haven’t respected France,” the industry minister, Arnaud Montebourg, said in an interview published this week in the daily Les Échos, unable to conceal his frustration over the company’s plan to scale back one of its three major French factories and eliminate hundreds of jobs. He called for the “temporary nationalization” and resale of the steel plant, at Florange, in the eastern region of Lorraine.

The ugly dispute pits the French state, in its traditional role as defender of industry, against a company that is trying to reduce capacity in line with the slowdown in the European economy and to cut its $23 billion of debt after Moody’s cut its credit rating to junk. The company wants to close two mothballed blast furnaces at the Florange plant, cutting 629 jobs, while continuing to operate a part of the facility that processes steel for the car industry. Currently the facility as a whole employs 2,700 people. In all, ArcelorMittal employs about 20,000 people in France.

With unemployment hovering above 10 percent, the Socialist government of President François Hollande is desperate to avoid more layoffs by name-brand companies. Several big employers, including PSA Peugeot Citroën, Air France and Sanofi, have announced big job cuts this year. But some analysts say that by taking such a strongly interventionist stand to protect steel workers, France risks sending the wrong signal to multinational companies, whose investment the economy needs if it is to stave off long-term decline.