Japanese firm joins battle for Alstom

Japanese engineering giant Mitsubishi Heavy Industries has joined the international battle to buy the massive energy operation of French group Altsom. The struggle to own Alstom has prompted nationalist opposition in France.

Japanese firm joins battle for Alstom
Japanese engineering giant Mitsubishi Heavy Industries has joined the battle for French group Alstom. Photo: AFP

German engineering giant Siemens is working on a joint bid with Mitsubishi Heavy Industries (MHI) for the energy assets of French group Alstom, the companies said Wednesday.

However, sources within Alstom dismissed the joint offer, saying it would effectively mean a break-up of the French "national jewel".

Alstom , which favours a rival offer by US giant General Electric, "is sceptical and shocked… It would be a dismantling" of the group, the sources said.

Mitsubishi Heavy Industries (MHI) and Siemens said a statement that they have "joined forces in evaluating a potential proposal for certain assets of the French multinational conglomerate Alstom in order to strengthen the future position of Alstom, MHI and Siemens."

The two groups would decide on the submission of a proposal to Alstom's board of directors "by June 16," the statement said.

The joint offer will rival a $17-billion counter-bid by US giant General Electric, which, while favoured by Alstom itself, has run into political opposition in France.

The French government views Alstom as a firm of national strategic importance and is concerned about safeguarding jobs as it battles record unemployment and declining industrial competitiveness.

Alstom is one of the country's biggest private sector employers with about 18,000 staff nationwide.

Alstom's energy unit, which builds generators, turbines and transmission systems and would complement GE's own power industry division, accounts for 70 percent of Alstom's business.

Once it has been sold, Alstom would be left with the railway equipment division that manufactures France's prized TGV high-speed trains.

While French economy minister Arnaud Montebourg favours a tie-up with Siemens, French Energy Minister Segolene Royal recent came out in favour of General Electric's takeover offer.

Siemens chief executive Joe Kaeser said it "appreciates MHI's commitment to join our efforts and I do look forward to working together with MHI to create a long-term oriented solution for Alstom, MHI and Siemens".

His counterpart at Mitsubishi Heavy Industries, Shunishi Miyanaga, said: "MHI has been invited by Siemens to join forces and we firmly believe that we can substantially contribute to a partnership solution for Alstom which will create value for all parties involved, including the country of France".

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US giant GE to pay France €50 million after creating just 25 jobs out of 1,000

The French government announced Tuesday that US industrial conglomerate General Electric will pay €50 million ($57 million) after falling short of its goal of creating 1,000 new jobs in the country.

US giant GE to pay France €50 million after creating just 25 jobs out of 1,000
Alstom employees protest in front of the France's Ministry of Finance in Paris. Photo: AFP

GE had pledged to create the jobs by the end of last year as part of its 2015 purchase of the power and electrical grid businesses of France's Alstom.

But shortly after closing the deal GE unveiled a series of job cuts across Europe as slumping oil and gas prices crimped demand for its heavy-duty turbines and other equipment.

The company had already warned last year that it wouldn't meet the target, though the new CEO Larry Culp confirmed in October that GE would “fulfil its commitments.”

It had promised to pay €50,000 for every job not created over the three-year period.

The French finance ministry said after a meeting with GE officials Tuesday that the firm had created just 25 new jobs overall, meaning it would pay €50 million into an industrial development fund.

“GE underscored the significant of its continual investments in France during the period, and noted that despite the particularly difficult business climate, the group had done its utmost to create jobs,” the company said in a statement.

It pointed to a $330 million investment in offshore wind turbines in France announced last year, which it expects to eventually create 550 new jobs.

But union sources said last month that GE was planning to cut nearly 470 jobs, at its Alstom Power Systems GE Energy Power Conversion units.

Under Culp the company has been trying to get its power operations on more solid financial footing, with plans to cut costs further and reduce debt.

Last week it posted a $574 million profit for the fourth quarter, a welcome turnaround from the $11 billion loss a year earlier.