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france 24 Business

French president takes action to save Alstom train factory

© Sebastien Bozon, AFP | The Alstom lant in Belfort, eastern France, where the first high-speed TGV train was assembled.

Video by FRANCE 24

Text by FRANCE 24

Latest update : 2016-09-12

France’s Socialist President François Hollande on Monday instructed ministers to find a way to save the Alstom factory that made the country’s first high-speed TGV train and is now under threat of closure.

Hollande said his government was “mobilised” to ensure the historic plant would remain operational, shortly after holding talks at the Elysée Palace with the economy, industry and transport ministers to discuss the situation.

Trainmaker Alstom announced last week that it would cease production in the eastern city of Belfort, a symbol of French industrial prowess that produced the company's first steam train back in 1880.

Alstom said it would centralise its train production at a site 200 kilometres (125 miles) further north in Alsace and promised to offer the 400 workers in Belfort other jobs.

The factory’s fate is set to become a hot-button issue as presidential hopefuls gear up for primaries ahead of elections next year, and France’s embattled president is expected to make a point of saving the Belfort site.

“Every time I travel abroad, both in emerging economies and in developed ones like the United States, Alstom clinches new contracts,” Hollande said, referring to last month’s successful bid by Alstom’s US branch to build high-speed trains for local rail operator Amtrak.

“What I did for Alstom abroad, now Alstom must do for France,” the French president added, calling on rail operators in France to ensure the trainmaker’s French factories had enough business to stay afloat.

‘We can still save Alstom’

The prospect of job losses in Belfort is of concern to the ruling Socialists, with polls showing them headed for a drubbing in presidential and legislative elections in the spring, partly because of their failure to make a serious dent in high unemployment.

Hollande’s government reacted with fury when the news about the factory broke last week.

"The method used by Alstom is unacceptable," Prime Minister Manuel Valls said on Sunday. "We can still save Alstom, as long as its leaders fully play their part.”

While the company – in which the French state has a minority stake - has said it will find jobs for the Belfort workers at other sites around France, unions say most of those affected are not in a position to move, leaving them facing redundancy.

On Thursday, Alstom's chief executive Henri Poupart-Lafarge was summoned by Economy Minister Michel Sapin.

The French government has a habit of intervening when it deems French companies or jobs to be under threat, particularly from multinationals.

When US conglomerate GE announced a bid for Alstom's energy assets in 2014 the state got involved, getting German group Siemens to put up a rival bid before finally coming down on the side of GE.

(FRANCE 24 with REUTERS)

Date created : 2016-09-12

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