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Alstom in crisis talks with French government over train making plant

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Alstom in crisis talks with French government over train making plant

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Alstom has begun crisis talks over plans to stop making trains at its plant in Belfort. The French government is insisting the facility remains open.

“Alstom confirms it is engaged in talks with the French government over the future of its Belfort site,” a company statement said on Tuesday, adding that no decision will be taken before the talks are concluded.

Earlier Alstom’s boss had told staff it would go ahead with plans to shut down manufacturing at its Belfort plant in the north east of France.

Reuters reported that it had seen a memo chief executive Henri Poupart-Lafarge had emailed to staff in which he said ceasing manufacturing at Belfort would help ensure the survival of the company’s wider business.

The plant is to be reduced to doing maintenance by 2018, affecting 400 staff who are to be offered jobs at other Alstom sites.

The company – which is 20 percent state owned – plans to halt production because of falling orders and a need to streamline production.

“Despite all our efforts, it now seems impossible to ensure a sustainable future for the activities of the Belfort site,” the chief executive wrote in the memo.

An Alstom spokesman told Reuters that even though the memo was dated September 13, it had been written last weekend and should not be seen as a response to the government.

Politicians talk tough

On Tuesday President Francois Hollande – speaking during a state visit to Romania – said: “Everything will be done to ensure that Belfort endures, and that means for years to come.”

Prime Minister Manuel Valls was firmer saying: “I want to say to Alstom management that they should forget any plan to close the Belfort site and that they can count on the government to move forward.”

Ministers met President Francois Hollande on Monday, after which the Economy and Finance Minister Michel Sapin said: “The president of the republic has given us a target: to make sure Alstom’s railway activities are maintained. To reach that objective, we’re going to work with elected bodies, with the trade unions, with Alstom’s management and with all of those who are able to order a certain number of trains in France, so we can save Alstom’s rail division in Belfort.”

Ministers said they were not told in advance about Alstom’s plan. The company said it did warn politicians a year ago this was going to happen.

Overshadowed by politics

CGT union representative Roland François said he is worried about politics taking over the issue. On the government pledge he said: “We hope it’s not just a political gesture. With the presidential election coming, we see all these politicians making gestures, but what we want is results.”

Inevitably it has become political with some calling for a rethink of a contract French state-owned railways operator SNCF and its partners recently awarded to German competitor Vossloh.

“For over a decade, Alstom has received no locomotive orders in France and production of TGV (high speed) locomotives, which is no longer assured beyond 2018, is at the lowest rate in its history,” Poupart-Lafarge said in Tuesday’s memo to staff.

On Monday an Alstom spokeswoman would not comment on the political aspects of the latest moves by the Socialist government, but said: “We have presented a project in a context (loss of orders) which everyone knows about. We are talking about the transfer of 400 jobs within France.”

With French unemployment sitting at around 10 percent since Hollande was elected in 2012 and a wide-open presidential election looming in April, no politician can afford to ignore such a high profile case, despite its relatively small scale.

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