Alstom : The Mayor confirms that General Electric will not be held to its commitments on employment

The american giant General Electric, which had acquired branch energy Alstom in 2014, has abandoned its commitment to create a thousand jobs by the end of the year in France, citing a “difficult environment” and exposing himself to a heavy penalty from the State. The CEO of GE, John Flannery, visited Tuesday at the ministry in paris to announce to the Finance minister Bruno Le Maire said that the commitment to create 1,000 jobs net by the end of the year was “out of reach”, as he had suggested at the end of last year. A new twist in this folder that has fueled the controversy for the past four years.

The boss of GE has assured to be “confronted with a difficult environment due to the adverse developments in its historical markets in the energy sector”, according to a press release of the ministry of Finance. Mr. Flannery has over the past year the head of GE to Jeff Immelt, the CEO who had successfully completed the acquisition of branch energy Alstom in 2014 to $ 13.5 billion. He had described the operation as “very disappointing” last November.

The Mayor has “regretted” the announcement of GE, which, according to Bercy had created that 323 jobs in France at the end of April, and has asked the u.s. group to take “all necessary measures” to “compliance at best” to fulfill its obligations. The minister reminded Mr Flannery that “the commitments that have been made by GE (…) are of great importance to the government, and that it must ensure their implementation”.

Last December, The Mayor had further assured that GE was “in line with the commitments made in 2014”, at the end of a monitoring committee to Bercy and after the announcement by the american group of its intention to remove 12,000 jobs in the world in its sector Energy. The independent consulting firm responsible for the monitoring of the commitments of GE, Vigeo, Eiris, had estimated the net new jobs created by the group to 358 at the end of October 2017, which is 35 more than those raised Wednesday by the finance ministry.

Penalty?

The Mayor has asked the CEO of “bright prospects are for the coming years in each of the industrial sites of GE in France, which allow to ensure the sustainability of the activity and the jobs associated with them”. GE has secured for its part, in a separate release that it will continue to work in close collaboration with the ministry of Economy and Finance on the commitments made during the acquisition of the business networks and energy Alstom”.

The group shall have regard to all his other commitments: “the creation of four global headquarters in France, one of three joint ventures with Alstom, the non-closure of sites in France and the presence of a Frenchman on the board of directors of the group”, indicated to the AFP a source close to the company. Alstom has also announced a month ago an agreement with GE to get out of the capital of these three co-companies for almost eur 2.6 billion.

The agreements provided for a penalty of 50,000 euros per net employment that would not be created before the end of 2018, which could raise the fine to nearly $ 34 million if the situation does not move by the end of the year. “We will fulfill our contractual obligations,” assured the source close to GE, asked about the fine. “We will discuss it with them at the end of the year,” added the entourage of The Mayor.

The terms of the acquisition of the branch energy of Alstom by GE had led to a standoff between the CEO of france at the time, Patrick Kron, and the minister of Economy, Arnaud Montebourg, who stood rather for a rapprochement with the German Siemens. After the takeover of a flagship French industrial, a commission of inquiry of the national Assembly on the industrial policy of France has recommended in April an extension of the scope of control of foreign investments.

The transport sector of Alstom, which has not been acquired by GE, shall be taken over by Siemens. The transaction is expected to close in the first half of 2019.

(With AFP)

Leave a Reply