Gen Electric (NYSE:GE)
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6 Months : From May 2018 to Nov 2018
By Nathan Allen
France's economy minister on Thursday urged General Electric Co. (GE) to take measures to honor its commitments after the U.S. company missed job-creation targets related to its purchase of Alstom SA's (ALO.FR) energy assets in 2015.
As of the end of April, GE has only created 323 of the 1,000 net jobs it pledged to create by 2018, the economy ministry said in a statement, following a meeting between Economy Minister Bruno Le Maire and GE Chief Executive John Flannery.
GE took control of the assets in 2015 in a deal valued at around $17 billion, following a prolonged bidding war with rival Siemens AG (SIE.XE) and a drawn-out approval process. France was initially reluctant to let one of its industrial champions fall into foreign control and attached stringent conditions to its approval, including the job-creation targets.
However, since then a global slowdown in the construction of new gas and coal-fired power plants has weighed on demand for the large turbines that the company produces, leading to heavy layoffs. In 2017 GE said it would cut 12,000 jobs from its global power business, with the majority coming from Europe. Siemens also announced a round of 6,100 layoffs at its power-and-gas unit.
"Mr. Le Maire has taken note of these elements and deeply regrets this situation," the ministry said, citing the importance of GE's commitments to the French government.
"He asked John Flannery that the GE Group take all the necessary measures to comply with [the commitments] as well as possible," the statement said.
Mr. Le Maire and Mr. Flannery will meet to discuss the matter in the fall.
GE said it continues to work with the minister's office on the commitments made as a result of the Alstom Power and Grid deal.
Write to Nathan Allen at email@example.com
(END) Dow Jones Newswires
June 14, 2018 07:48 ET (11:48 GMT)
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