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French government flies to rescue of trainmaking plant

Tuesday, October 4, 2016 - 18:43
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The French government on Tuesday announced orders for 21 high speed TGV trains, mostly for tracks on which they cannot run fast, as part of a pre-election bid to preserve jobs at an historic locomotives factory.

[BELFORT, France] The French government on Tuesday announced orders for 21 high speed TGV trains, mostly for tracks on which they cannot run fast, as part of a pre-election bid to preserve jobs at an historic locomotives factory.

The orders for engineering group Alstom are worth as much as 630 million euros (S$963.35 million) according to a source close to the situation.

They were announced to trade unions and regional officials and are expected to be made public later in the day.

Six months from an election, President Francois Hollande's government has promised to help maintain train production and jobs at the factory, in the eastern city of Belfort, which Alstom management says cannot survive a dearth of orders.

Alstom caused a political storm last month when it said it would transfer 400 of the 480 jobs there to another plant and reduce it to a maintenance depot.

Industry Minister Christophe Sirugue outlined the plan at a Tuesday morning meeting in Belfort, a city of 50,000 people where Alstom started building steam engines in the late 19th century.

Sirugue told those present the government would place a direct order for 15 high-speed TGV trains to run on inter-city lines in the south of the country, a source with knowledge of the announcement said.

There are plans to upgrade some inter-city lines to TGV speeds, but there are also doubts about when, and even whether, this will happen. French senators last month called for a 15 year freeze on financing for new TGV lines.

On top of these, the source said, the SNCF state railway company will confirm an order for six more TGVs for a high-speed link between Paris and the Italian cities of Milan and Turin. Approval for that 25 billion euro upgrade came in 2015.

Mr Sirugie also promised investment to help transform the factory, struggling for lack of foreign and domestic orders, into a European train maintenance hub. There are also plans for a research centre on electric buses to be located there.

The rescue has sparked considerable debate about the cost to taxpayers and the long-term viability of maintaining production at the historic Belfort factory, with some saying that the SNCF rail company does not need the trains being ordered.

Laurent Berger, leader of the CFDT labour union said the move was vital to protect jobs and see the factory through a rough patch.

"People would have to face up to the matter if this industry sector was doomed, if it had no future, but that's not the case," Mr Berger told Europe 1 radio.

Others accuse the government - which owns 20 per cent of Alstom - of waking up late to the issue for largely electoral reasons.

REUTERS