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France to hold Siemens to account on Alstom job pledges
September 28, 2017 / 9:35 AM / 3 months ago

France to hold Siemens to account on Alstom job pledges

PARIS (Reuters) - France will make sure Siemens (SIEGn.DE) sticks to its commitment to preserve jobs following its rail business merger with Alstom (ALSO.PA), the French finance minister said as the government seeks to reassure worried workers.

French Finance Minister Bruno Le Maire (R) and Minister for Public Action and Accounts Gerald Darmanin (2ndR) talk to journalists to present the French gouvernment's budget at the National Assembly in Paris, France, September 27, 2017. REUTERS/Stephane Mahe

The French finance ministry said it had secured a commitment from Siemens to safeguard Alstom’s French manufacturing plants and jobs for a four-year period after the deal struck this week by the two companies closes.

“I will put in place a committee to monitor the commitments taken by Siemens towards the French state,” finance minister Bruno Le Maire told BFM TV on Thursday ahead of a visit to Alstom’s Valenciennes site in northern France on Friday.

With the unemployment rate still stuck above nine percent, a recent string of cross-border corporate deals giving foreign companies control over French firms have led to criticism from opposition politicians of the centrist government of new French President Emmanuel Macron.

On Wednesday, Italian shipbuilder Fincantieri (FCT.MI) won a deal to take effective control of French shipyard STX France, ending months of resistance by the French government.

In order to lessen concerns about foreign ownership, Le Maire said France will have independent board members in the new Siemens-Alstom company, who will have the right to veto all strategic decisions for four years.

He also said that the French state, as a major customer, will have a major influence on the new Siemens-Alstom due to it having a 5 to 15 percent capital stake in the combination.

Le Maire reiterated that fierce competition from Chinese players who are twice as big as Siemens and Alstom combined, meant they had no choice but to merge their rail activities.

    “Otherwise we would be eaten raw,” he said.

    Asked about job promises made in previous takeovers of French companies, Le Maire said the government would make sure that General Electric (GE.N) respects commitments it made after its acquisition of Alstom’s energy division two years ago.

    He also said he had spoken with the president of Nokia NOK1A.HE to remind him of a promise to create jobs in France.

    When buying Alcatel-Lucent in 2016, Nokia pledged to hire 500 people in research and development in France, but the firm said earlier this month it would cut nearly 600 jobs in France by end-2019 as part of a cost-cutting plan.

    “I told him he needs to accelerate jobs creation, because the target has not been met and we have the means to exert all necessary pressure,” Le Maire said.

    Reporting by Geert De Clercq; Editing by Sudip Kar-Gupta and Alexander Smith

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