Business Bombardier: Alstom ready for concessions to convince Brussels

Bombardier: Alstom ready for concessions to convince Brussels

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Paris (AFP)

Transfers of model trains and production facilities, including a factory in France: Alstom said it was ready Thursday to make concessions to convince the European Commission to let it get its hands on its Canadian competitor Bombardier Transportation.

The French railway manufacturer wants to create a set capable of facing the Chinese CRRC, the world number one. The new group would employ, before possible disposals to satisfy Brussels, around 76,000 employees for a turnover of 15.5 billion euros.

In order to make room for its rivals, Alstom intends to propose several measures to the European Commission, guardian of competition in Europe: “To respond to the initial concerns of the European Commission, Alstom (…) announces today its intention to submit a certain number of commitments, “the group said in a statement.

It notably proposes to sell the Coradia Polyvalent trains produced by Alstom for the French market – called Regiolis by the SNCF – as well as its Reichshoffen production site, located in Alsace.

Concretely, these trains would be supplied by a new player, if the Commission agrees and if the group finds a buyer. Alstom has already delivered more than 300 of these trains, mainly TER, the Reichshoffen plant having a guaranteed load plan until 2024.

– Secure financing –

Alstom also says it is ready to sell the Bombardier Talent 3 platform – self-propelled vehicles sold in Germany and Austria – as well as the “corresponding production facilities located at the Hennigsdorf site”, a venerable factory on the outskirts of Berlin.

The company will also provide “third-party access to certain interfaces and products of the various Bombardier Transportation on-board signaling units and train control management systems”.

Finally, the new set would focus on Alstom’s high-speed trains (TGV), after having transferred the contribution from Bombardier Transport, the V300 Zefiro high-speed trains (the Frecciarossa 1000 which circulate in Italy).

This series of commitments is subject to the approval of the European Commission, specifies Alstom, for whom the acquisition of Bombardier Transportation “remains on track” for finalization in the first half of 2021.

“Discussions with Europe are going well and we have already secured funding,” commented Alstom CEO Henri Poupart-Lafarge, when presenting the results of the French group on May 12.

Alstom had notified last month its plans to buy its competitor Bombardier Transportation for 6 billion euros to the European Commission, which has until July 16 for a first review of the case.

– “Betrayal” –

The two groups have a virtual monopoly on rolling stock in France, where they collaborate regularly as on the Paris metro and RER.

The threat of Chinese competition had already been mentioned to justify the takeover of Alstom by Siemens, an operation which had been blocked in February 2019 by the European Commission, which feared an overly dominant position in Europe in railway signaling and trains great speed.

Based in Berlin, Bombardier Transportation generated revenue of 8.3 billion U.S. dollars in 2019, ending the year with an order book of 35.8 billion dollars (33 billion euros).

This Bombardier branch, 32.5% owned by the Caisse de depot et placement du Quebec (CDPQ), has, in Crespin (Nord), the largest railway factory in France, with 2,000 employees.

For its part, Alstom operates many smaller sites. The manufacturer has completed its 2019-20 fiscal year (ended end of March) with a turnover of 8.2 billion euros, its order book peaking at 40.9 billion euros.

The coronavirus crisis should have an impact on the current financial year, but the group believes it has sufficient cash to cope with it. Above all, this crisis has not started his motivation to take back his competitor.

For their part, the 780 employees of the Reichshoffen site fall from the clouds: “Nobody here thought that our factory was going to be sold. It is more or less a betrayal, it is what all the employees feel”, lamented Daniel Dreger, CGT delegate. “We were very surprised. We are now awaiting the decision of the European Commission, but for us, it is almost confirmed that Reichshoffen will be sold, we do not see how they could go back”.

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