Last week Alstom sent shivers through France’s political establishment-just as the 2017 presidential campaigns are getting underway-by saying domestic demand was too weak to sustain its plant in Belfort, a French town near the border of Germany and Switzerland that produced numerous country’s first iconic high-speed trains.
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The move caused a political furor over the weekend and the government demanded he reconsider.
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.
On Tuesday, Alstom CEO Henri Poupart-Lafarge reiterated the point in a letter to employees. In an e-mail to staff, he said an end to manufacturing at Belfort would help ensure the survival of the company’s wider business.
“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.
Alstom said it wanted to 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.
“Everything will be done to ensure that Belfort endures, and that means for years to come”, he told journalists.
Valls said on Sunday Alstom’s decision was unacceptable. “What I ask is a bit of patience in the coming days, let’s not get carried away”.
Alstom’s weekend note had cited a lack of orders and a need to streamline production.
Alstom ALSO.PA said on Wednesday it planned to stop making trains at Belfort and transfer production to its plant in Reichshoffen in eastern France by the end of 2018.
PARIS- Alstom SAALO -0.71 % has entered talks with the French government over how to boost the train maker’s domestic market after the firm announced plans to shutter production of locomotives at a historic plant.
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But with the shares now languishing at around 24 euros, it is more likely to wait until an eight-day window in October next year when it will be able to buy at market prices.
