Alstom and French government in talks over future of Belfort plant

Tue Sep 13, 2016 1:47pm EDT
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By Julien Pretot and Emmanuel Jarry

PARIS (Reuters) - Alstom (ALSO.PA: Quote) has begun crisis talks with the French government as President Francois Hollande tries to avert the engineering company's planned shutdown of manufacturing at its Belfort plant in eastern France.

The company, which makes France's high-speed TGV trains and is 20 percent controlled by the state, stirred up a political storm last week by announcing that it would stop making rolling stock at the site where its first steam locomotive was built in 1880.

The move comes seven months ahead of the presidential election, and under-pressure Hollande vowed that "everything will be done" to prevent the shutdown.

"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.

The statement left the door open to negotiations after a note was emailed to staff at the weekend, in which Chief Executive Henri Poupart-Lafarge said that Alstom would go ahead with plans to end manufacturing at Belfort.

Prime Minister Manuel Valls had said that Alstom "should forget" any plan to close the site, with 400 jobs at stake.

With French unemployment sitting at about 10 percent and the presidential election looming in April, the deeply unpopular government could ill afford to ignore the move by a company viewed as a national industrial champion.


A scale model high speed train and the logo of the Alstom are seen before the the news conference to present the company's full year to end-March 2015/16 annual results in Saint-Ouen, near Paris, France, May 11, 2016. REUTERS/Gonzalo Fuentes/File Photo