General Electric will pay the French government €50 million after creating just 25 out of a promised 1,000 jobs in the country following its takeover of Alstom's energy business in 2015.
“GE has recruited 3,000 people over the past three years, resulting in the creation of 25 net new jobs by the end of 2018,” said the French finance ministry in a statement on Tuesday.
The American industrial conglomerate had agreed to pay a fine of €50,000 for every job it failed to create following a 2015 deal that was shepherded through by French president Emmanuel Macron, then France's finance minister.
Former GE chief executive John Flannery had called the Alstom deal "very disappointing" and admitted in June the target of creating 1,000 jobs was "out of reach".
“The evolution of the energy markets, and the acceleration of the energy transition, which severely limited the gas turbine market, however, did not make it possible to reach the goal of creating 1,000 net jobs . . . In this context and in line with its commitments, GE has confirmed the creation of a €50 million reindustrialisation fund,” said the finance ministry in its statement.
Write off
In October, GE replaced Mr Flannery and said it would write off $23 billion (€26 billion) from the value of one of its core divisions, the business supplying equipment to the power industry. Most of that charge related to the purchase of the energy businesses of Alstom for $10.1 billion.
In December it announced plans to slice 12,000 jobs including 1,100 in the UK as part of an effort to cut $1 billion in costs.
GE said in its own statement on Tuesday that it “stressed the importance of its continuous investments in France over the period and pointed out that, in a particularly difficult market environment, the company did its utmost to create jobs and met its contractual commitments with the State”.
The company employs just under 16,000 people in France, where it has invested close to €1 billion since the takeover of Alstom.
– Copyright The Financial Times Limited 2019
