Thursday, February 2, 2023
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French Alstom hesitates about EU plan to close German train factory

The French train factory Alstom has not yet met all the conditions of the European Commission more than seven months after the completion of its takeover of the Canadian train manufacturer Bombardier. For example, Alstom had to (partly) divest its workshop in Berlin, but that has not yet happened despite the deadline on July 31.

Alstom has been negotiating this with the Czech Skoda Transportation for months, but that is becoming increasingly difficult. Alstom director Henri Poupart-Lafarge said at the shareholders' meeting last month that such processes are "long and complicated", but gave no further details.

It is suspected that Alstom is still using the opening of the Henningsdorf branch as a 'bait' to win a large German order. Last month, the director called for 'new investments in this location. He also hinted that much will depend on the tender for new rolling stock for the Berlin S-Bahn, according to Der Tagesspiegel.

A French consortium of Alstom and Transdev is engaged in a battle with Deutsche Bahn, which is working with Siemens and Stadler for the order for new equipment for the S-Bahn above-ground express tram in the German capital. The German government would like to keep the employment of that billion-dollar order in its own country. In order to accommodate this, Alstom apparently wants to keep Hennigsdorf open.

Siemens and Alstom have been negotiating intensively for several years about a possible merger of their German and French train industries. Those discussions eventually faltered over concerns of the EU competition authorities about the emergence of oversized market-dominant concerns. Alstom then opted to take over the Canadian train builder.

In the meantime, more and more voices are being raised in Europe to allow large mergers, even if they become too big competitors for smaller industry peers. There is an increasing demand for a European industrial policy. The EU must ensure that their industries and economies are not dominated by superpowers such as the US and China.

According to unconfirmed reports, Alstom offered to EU Commissioner Vestager to close the Alstom production center in Reichshoffen, France, in exchange for closing that German facility. A spokesman for the European Commission declined to comment on the 'final hurdles' in the Alstom-Bombardier file.


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