Deutsche Welle, 29 April 2014
German tech
giant Siemens and US company GE are competing for the French concern Alstom.
The French president has vowed to intervene in the affair, which reveals many
of the country's problems.
Alstom CEO
Patrick Kron and his General Electric counterpart Jeffrey Immelt appeared to
have everything signed, sealed, and delivered. GE, one of the biggest
technology companies in the world, was to take over the French company for
almost ten billion euros ($13.8 billion) - but the two companies had not banked
on the interference of politicians.
"We
will not allow this national flagship to be sold behind the back of the
shareholders, the employees, and the French government," Economy Minister Arnaud
Montebourg said on Twitter on Monday morning (28.04.2014). The state would
"defend the economic and industrial interests of France," he added.
Political
outrage
Alstom is
considered a strategically important company in France, because it is part of the
energy sector, manufacturing turbines for the country's many nuclear power
stations. But there is more at stake: the Alstom case is "unfortunately
another sign that France has gone off the rails," Jean-François Copé,
chairman of the conservative opposition UMP party, told the Europe 1 network.
"Let
us not repeat the mistakes of the past," tweeted former socialist cabinet
minister Jean-Pierre Chevènement, before naming "Pechiney, ArcelorMittal,
Lafarge" - all companies that had been swallowed by the foreign
competitors.
 |
| Jeffrey Immelt thought he had the deal sewn up |
Not
included in Chevènement's list was PSA-Peugeot-Citroën, which has just been
bought by Chinese investors Dongfeng and the French state . Shareholders gave
the green light for the bailout last Friday.
Industrial-sized
losses
These
examples show that France is in danger of losing its industrial base. The
European Union statistics office Eurostat has calculated that industry accounts
for only 12.8 percent of the country's economic power - half as much as in
Germany, and significantly less than in Spain or Italy.
Ten years
ago, a conservative French government bailed out Alstom with taxpayers' money,
preventing a takeover of its energy sector by Siemens. Now that same plan -
Siemens buying the energy tech component of Alstom - is supposed to provide a
solution. In return, the German company is said to be prepared to devolve its
rail business to Alstom. At the moment, the French firm's high-speed TGV trains
are in direct competition with Siemens' ICE trains.
Advantage
Siemens
General
Electric (GE) and Siemens each have a turnover of some 75 billion euros,
dwarfing Alstom's 20 billion euros.
"Alstom
has global sales, but a lot of its activities come from French costumers, for
example SNCF or Electricité de France," said Thomas Michalski, economist
at the HEC economic school in Paris. "And those customers haven't brought
a lot of business in the past few years."
The French
government seems to prefer Siemens' offer to that of GE, but has no objections
to a foreign takeover in principle.
"There
is still a knee-jerk reaction to keep French companies in French hands,"
Michalski told DW. "However, I would say the French government knows it's
heavily indebted; it still runs a huge deficit; the financial capacity to
intervene is very limited."
Slow change
But
Michalski sees signs of a change of heart that is not just down to the lack of
means. When steel company ArcelorMittal closed down its plants in Lorraine in
2012, there was some political outrage - but no intervention. Nor did the
government do anything when Lafarge, the world's second biggest manufacturer of
construction materials, announced that following its merger with market leader
Holcim it was moving its headquarters to Switzerland.
 |
| Siemens and Alstom both make high-speed trains |
On the
other hand, the state did attempt to prevent storied industrial company
Pechiney from suffering the same fate. Then the fourth biggest aluminum
producer in the world was taken over by the Canadian Alcan group in 2003.
"Alcan
dismembered Pechiney, sold it in pieces and laid people off," said
Michalski, adding that for the French it was shocking, because they have more
of a stakeholder culture.
He also
argued that it had been a shock to the French to see the protection of jobs and
tax income subordinated to the interests of shareholders.
"That's
why the French prefer alliances with companies from Germany, which also has a
stakeholder culture, to alliances or takeovers by firms from the Anglo-Saxon
shareholder culture," he said.
For the
French economy minister, the Siemens offer could create two European champions.
Montebourg compares the current situation with the establishment of European
airplane manufacturer Airbus, which now competes with the previously dominant
US manufacturer Boeing.
"We will
either be bought by Boeing," Montebourg said on Twitter, "or we
create one Airbus of energy and one of transport."
German
Economy Minister Sigmar Gabriel, for his part, likes the idea. His spokesman
said the fusion of Siemens and Alstom offered "huge opportunities"
for both countries.
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