PARIS — Bang on schedule, a classic French industrial intervention drama has pulled into the station just as the presidential election campaigns get under way.
Never shy of stepping into labor disputes — especially in a pre-election year — politicians on the Left and Right are swapping accusations over the future of a plant run by trainmaker Alstom, and trying to drum up ideas for business to keep workers at its Belfort plant.
Jobs aren’t even threatened in the short term — if ever. Alstom’s surprise decision to shutter its Belfort plant within two years came with an offer to redeploy workers to a site 125 miles to the north. The company says it can’t guarantee the facility’s long-term viability due to weak domestic demand for its locomotives — which once included the famed TGV (train à grande vitesse).
In any case, the 400 jobs at the plant — half of them qualified engineers — pales in comparison to the roughly 400 people added to the unemployment list a day since François Hollande became president in May 2012.
Still, at 8:30 a.m. on Monday, Hollande summoned Prime Minister Manuel Valls and the economy, transport and industry ministers to the Elysée and tasked them with “maintaining a train-making capacity” at Belfort, Economy and Finance Minister Michel Sapin told reporters afterwards. Closing the Belfort plant is “out of the question,” said Valls.
Alstom has been a political football ever since it was bailed out by the then-Conservative government in 2004 after dramatic negotiations with the European Commission. The current dispute is ideal for warring factions in the ruling Socialist Party to tear strips off each other over their diverging views on the role of the state in industrial matters. Hollande’s eagerness to jump on the case is explained by memories of similar, politically costly cases from the past that proved a lasting trauma for the Left of the party.
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What is certain is that the blend of widespread political hypocrisy, corporate clumsiness and union protest promises to transform a relatively minor industrial event into a headline political story.
Lost in the fury, for the time being at least, is the uncomfortable truth that the only way to keep Belfort viable is for the government to spend money it doesn’t have, or pressure other companies it controls — such as Parisian transport authority RATP or national train company SNCF — to pay out funds on trains they don’t need.
And even then, Paris would have to navigate stringent EU rules on direct or indirect state aid before it gets involved.
Not Venezuela
The first reaction of French government officials to Alstom Chief Executive Henri Poupart-Lafarge’s letter to Belfort employees last week was to complain about “the manner.” In other words, the boss hadn’t done what well-behaved CEOs are supposed to do in such touchy matters: give the government advance warning. That was “unacceptable,” Sapin complained.
Both Alstom’s unions and local politicians take umbrage, however, at the government saying it wasn’t aware of the situation. Senator Cédric Perrin, from the Conservative Les Républicains Party, said it warned then-economy minister Emmanuel Macron last year that order books had shrunk. Perrin has published a letter from Macron confirming his “support for the future and development of a French train-making industry” — whatever that meant.
The French state owns a 20 percent stake in Alstom, as a result of another drama two years ago over the group’s sale of most of its other activities — in energy equipment and nuclear plants — to General Electric of the United States.
France’s industry minister at the time, Arnaud Montebourg, first opposed the GE takeover, then tried to encourage a rival bid from Germany’s Siemens, and finally proposed the group’s nationalization — all in vain. Eventually, in a complex financial arrangement with Alstom’s dominant shareholder, construction group Bouygues, the state ended up with a stake it will only hold until the end of 2017.
That doesn’t give the state more rights than other shareholders, so legally it didn’t have to be consulted over the fate of the Belfort plant, especially since it didn’t involve mass redundancies. Still, Poupart-Lafarge seems to have lacked the kind of political finesse required from French bosses whenever trouble strikes.
“Sending a letter to employees out of the blue to tell them they will have to relocate away from home is a no-no,” the head of a top French corporate PR company said. “You pave the way, you consult, you don’t take your local mayor or the government by surprise.”
Calls to an Alstom spokesperson to discuss the case were not returned.
Different presidential candidates are now at each other’s throats over who is responsible for the situation. The big piñata both for the Left and Right for now is Macron, who resigned from his post as economy minister a week before the Alstom announcement.
“The question is what he had planned to do, but the truth is he wasn’t doing much in his last year,” his former colleague Sapin told Le Monde. “If we are on Alstom’s board what did the economy minister do to save Belfort?” asked Montebourg, who is now running for the Socialist primary on a protectionist, anti-Hollande platform. He recalled that when he pushed for the state to buy a stake in Alstom, Macron — who was then Hollande’s economic adviser — had replied: “We’re not Venezuela.”
‘Pathetic’
Macron is also taking hits from conservative presidential contenders who are all too happy to pounce on a possible rival. “What was the economy minister doing all this time? Probably devoting more time to his small political startup than to French industry,” charged front-runner Alain Juppé.
Nicolas Sarkozy, who was economy and finance minister when Alstom was bailed out in 2004, piled it on: “He promised workers he would help them and save them. He’s gone. He’s done nothing. This is pathetic.”
The Alstom case could give another anti-European, protectionist twist to the presidential campaign. It came a few days after Alstom lost a contract to build 44 locomotives for the German market, which was won by German rival Vossloh. The fact that the company that put out the tender offer is jointly owned by SNCF prompted some Alstom union leaders and local politicians to call for the state to exert pressure on the national railroad company.
Ministers have promised to steer more orders towards Alstom’s Belfort plant, though their ability to do so is limited. Firstly, because it would threaten jobs at other trainmakers which, although they are foreign competitors, have set up shop in France. Secondly, because France is already over-saturated with high-speed trains whose profitability is dwindling.
In the current context, there is a slight chance the government could scrape together some money to order some local trains directly, and there is room for improvement in suburban transport, as anyone who has taken a train in the greater Paris area can testify.
Beyond that it’s hard to see how the French train market will improve much, reinforcing suspicions that the Socialist government is only playing for time, to earn a few months of industrial peace.
Back in 2002, Socialist Prime Minister Lionel Jospin suffered a humiliating defeat in the presidential election when he failed to make it to the second round, leaving the run-off to conservative president Jacques Chirac and far-right leader Jean-Marie Le Pen. The consensus among Socialists is that one of the reasons for his defeat was that Jospin had once admitted the state “couldn’t do everything” in case of industrial disputes.
The Socialist Party’s first secretary at the time was one François Hollande. “You can bet he will do everything not to let industrial closures spoil his presidential campaign,” said one of his former aides this week. “He’s been traumatized by that, hence the panic you see at the top.”
“The risk, today, is that people won’t believe his promises, so he’d have to deliver something real. But can he?” asked the aide.