Alstom announces Europe-wide restructuring

Download article in original language : FR0306101NFR.DOC

In spring 2003, Alstom, the French-based engineering multinational, announced a major Europe-wide restructuring plan which includes stringent cuts in its activities. The group may be selling off its shipbuilding division and announced job losses in its power and transport infrastructure divisions at various works council meetings in April, May and June. There have been fierce reactions from trade unions in France, while the Alstom European Works Council has brought a court case.

The multinational Alstom engineering group, which was a 'jewel in the crown' of French industry at the cutting edge of technology in the 1970s (eg with the construction of the first TGV high-speed train in 1973 and of the turbines for nuclear power plants), is about to be broken up. Patrick Kron, the group’s new chief executive, unveiled his strategy and action plan on the occasion of his appointment on 12 March 2003. With the aim of boosting Alstom’s share price, Mr Kron has set himself the goal of restoring the group’s profitability. Quoted on the stock exchange since 1998, Alstom cut 10,000 jobs between 1999 and 2000 (of which 1,500 in France) and its results have been steadily deteriorating for three years, entailing a 50% fall in the share price. Alstom currently operates in the power, transport infrastructure and ship-building sectors and had some 119,000 employees worldwide in 2002 (with under a quarter in France).

Alstom has announced the probable sale of over 50% of the capital in its Chantiers de l’Atlantique, shipbuilding subsidiary, and there have also been escalating announcements of job cuts in the firm’s other activities. At an Alstom European Works Council meeting on 25 April 2003, management announced the loss of 3,000 jobs in Europe, 600 of which would be in France. A month later, it stipulated at a group-level works council meeting in France that the job losses there would actually exceed 1,000, bringing the number of jobs under threat in Alstom’s European power division to 3,600 (including 700 in Germany, 470 in Switzerland and 450 in the UK). At a French group-level works council on 6 June, 495 new job losses were announced by the top management of the firm, mostly in the French transport branch.

The five trade unions represented in Alstom's French operations - the General Confederation of Labour (Confédération générale du travail, CGT), the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), the General Confederation of Labour-Force ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO), the French Confederation of Professional and Managerial Staff-General Confederation of Professional and Managerial Staff (Confédération française de l’encadrement-Confédération générale des cadres, CFE-CGC), the French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC) - have organised several stoppages and rallies at different sites in France, particularly in Belfort, the historical birthplace of the firm, where it is still the major employer.

Several hundred Alstom employees took part in demonstrations against the government's proposed pension reform (FR0305103F) held on 13 May, 25 May and 3 June 2003. On 5 June, a national day of action was organised at Alstom by the unions to protest against the management's corporate restructuring plan. Different types of action occurred at about 20 of the group's sites and several hundred Alstom employees held a meeting in front of the Parisian headquarters of the group. Moreover, the Alstom European Works Council - chaired by a representative of the German Metalworkers' Union (IG Metall) - has decided to take the group to court for alleged non-compliance with procedures for information and consultation over the management’s planned restructuring. A court was due to pronounce its judgment on 13 June 2003.

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment